Monday, 23 January 2012

The Renters' Rant

Application to rent 2/7/11

After close to a decade of living at our own house we are now in the process of seeking a place to rent while our “real” house is being extended. As I haven’t been to this rental game for a while, I find the immediacy with which the process of searching for a place to live has slapped me in the face quite striking. Although I’m only at the beginning of my quest for a place to live, it seems to me as if the state of affairs in the Aussie rental market is all about power: that is, the abuse of the power held by the suppliers and their supply chain over the end consumer.
Remember, that consumer is seeking to satisfy their most basic of physical needs – the need to for shelter, and is thus at a pretty weak bargaining position. Theoretically, the market should have arranged for competition to help the side of the consumer, but in practice it’s anything but. This post is here to review a few of the property rental scene’s areas of pain.

Problem #1: The Landlord
As we’ve been reviewing places to rent, it seems a lot has changed in the quality of what’s on offer. I cannot say this with authority given my limited number of observations, but it seems to me as if what has passed as a quality apartment a decade ago is significantly better than the current standard. For example, rooms tend to be smaller, living rooms in particular; common stairways and corridors are narrower and steeper, leaving me to wonder how anything can be taken in and out; and lifts are much smaller (again, affecting removals) if they exist in the first place.
The way I interpret it, newer properties are built to tick boxes, not to be good places to live in. The crowd wants bedrooms? Give them away, but make them smaller so we can build more! And make the corridors smaller, so we can build more apartments! In one word, greed.
In parallel to quality seeming to deteriorate there have been significant price rises. Generally speaking, the cost of renting has almost doubled over the last decade. In order to cover this up, what used to be fortnightly rental fees are now quoted as weekly fees; I could not avoid nothing the figures are the same…
It seems landlords deliver those price increases by limiting rental contacts to a year. If you want to stay at your rental place for more than a year, fine; you just need to sign this new contract. And pay more. This has been sending several people I know to find a new place to rent each year whether they want it or not (see here for an example).
In general, over my decade of life at Australia I have been witnessing the build-up of a uniquely Aussie class struggle: you’re either a property owner or a renter. If you’re in the former, “we” (including we, the tax payer) will help you get stronger and secure your power; if you’re with the latter, just shut up and pay, you failure you!

Problem #2: The Real Estate Agent
My property buying experience has led me to theorize the real estate agents serve neither seller nor buyer but rather themselves. Not surprisingly, that same insight seems to apply to the rental market.
First, it does not seem as if the agents care much for the landlord’s interests. Between being late at inspection times, not knowing the very basics of the places they’re demonstrating (e.g., “where is the heating?”), and even disappearing while the property is open for inspection, I sincerely think investment property owners are being short changed. What they’re getting for their money are glorified door openers, and unreliable ones at that.
Things are even worse from the renters’ point of view. The process of applying to rent a property is incredibly tedious and tilted heavily in favor of the agent/owner. It starts with application forms where you need to disclose so much information about yourself, including previous addresses, the details of previous landlords, previous jobs and much much more that it all feels like a bad joke. A very long bad joke.
Technology has stepped up to the challenge, and now you can apply online using the services of a company called 1form. The process is just as tedious, though, with some nasty surprises along the way. For example, the “your previous job’s manager” information fields, like their number and email address, are mandatory fields; yet in my case that company doesn’t exist anymore, and besides – keeping the contact details of a boss that hasn’t been mine for years is quite unreasonable. The same goes for the history of previous landlords. And what is one expected to do when one does not have a previous job?
1form’s true candy comes at the very end of the application process, when you’re informed that if you don’t want to refill all the forms from the start the next time you apply online (a process that took us more than two hours) you need to open your wallet and pay between $30 to $50. That’s right, you’re paying them to store your details, something they’d be doing anyway because they need to do it for the application you’ve just finished. Now, I wouldn’t mind them charging money for their services; I do, however, mind them not telling me they’d be charging money up until the point where I finished my application. I also mind facing a monopoly that can charge me as much as it wants.
Monopolly is the key word here, because its effect continues throughout the process and is not limited to the application forms. Applicants are asked to provide the whole histories of their lives, but they are left in the dark when it comes to the totally non-transparent process of assessing their application. Renters are often left in the dark after their application has been accepted, with landlords waiting to see if they could get better applications coming in before the rental agreement comes into effect. At a time when good properties are are battled for, one cannot look elsewhere for easier solutions.
The potential for adding uncertainty to one's life through property rental is certainly immense.

Problem #3: Privacy
I already pointed to the tediousness of the application process, but there is another aspect that's worth pointing at on its own because of its potential for creating some personal tragedies. That's the aspect of privacy.
When applying to rent a property one needs to provide an exhaustive amount of personal information, some of it of dubious value to the application itself: why, for example, do I need to provide the license plate number of my car on a property rental application form?
Then there is the need to supply 100 points of ID together with the application form. That also applies when the application is filed through the web and no one can verify the photo on your driver's license, which raises the question of what the point of collecting this information at such an early stage is. Why not save the hassle and verify the ID at the end instead, thus saving both supplier and collector the trouble?
If you read the small letters on your application form (I read them on the online application form), you will find a privacy statement allowing your information to be forwarded to some 17 (!) entities, starting with the real estate agent and the landlord but moving forward to far more obscure ones. Oh, and your information may be shared with up to five other institutions that may use it to investigate you, as well as your state's real estate collective agency where it may be used for various statistical purposes. Note all of the above have access to your personal info, including your 100 points of ID. All of them would create various copies of your information on the way, and who knows what might take place from thereon?
Which brings me to the risk of all your private information getting lost (or rather, stolen). It can happen with real estate agents losing paperwork, and it can happen through the interception of 1form's online transmissions. True, 1form 's databases are encrypted (so they say), but your personal info is still exposed to 1form's employees. Then there's the fact 1form forwards the online application forms to email addresses, and email is famous for being an insecure form of communication. Then there's the fact copies of the application information are stored on the PCs of the real estate agents assessing your application, and who knows what security they have there?
In short, any would be hacker can have a hell of a time raiding online application forms using tools that are commonly available over the web. In short, once you apply online to rent a property, you may as well consider your identity compromised. The trouble is, you don't have much of a choice.
There seems to be zero awareness on behalf of all sides to the privacy issues present in the application process, yet the danger is clearly there. If companies like Sony can be hacked to death with personal information stolen, so can your local real estate office. Why it is, then, that they so cheerfully ask for and collect information that is mostly redundant?

To sum up:
Almost all of us will rent a property at one point or another, and almost all of us will manage the process. Yet the question remains: why do we have to go through a process that could have been so much easier on everyone involved if it wasn't for vast amounts of self interest skewing it throughout its way?

Note I was trying to get my wife to write a guest post on rental anguish. Thus far she has refused the honor; instead, you got another typical post from yours truly.
Image by esimpraim, Creative Commons license


Emily said...

Moshe, the privacy aspect is very concerning and it's something I haven't given a lot of thought to - so desperate we've been in the last four years just to find somewhere to live after landlords have suddenly decided to sell after a 12-month lease (which is their prerogative) that I'd have filled in all my darkest secrets on the application form. But you're right - why the need? At some point it becomes a cultural thing - in Oz you're somebody if you own your house and you're second-class if you don't. I ought to make t-shirts saying "Yes I rent my house but I also keep the garden nice and mow the nature strip. Including your side of it so quit looking at me like that." Or something catchier!

I hope you feel better after your rant.

Moshe Reuveni said...

Guess I won't be buying any of your shirts. I don't keep my garden nice (the weeds stand so tall there are probably some hidden bodies there); any minute spent on the garden is one less minute spent on the computer! I also refuse to mow the nature strip while it's got dog sh*t all over (note: we don't have a dog). I’m sorry about that, because I like and agree with your thinking.
Still: yes, I do feel better after the rant. Not that it eases the real problems of renting and the sad farewelling of my privileged identity.

P.S. I should probably tell you I consider it a great honor to have an author read and comment on my blog.

Anonymous said...

Its always so easy to be critical, but the fact is you offer no alternative to the system in place. If I read your blog correctly you feel that owners/agents should let their property to you on the promise that you are a good person and that you are who you say you are.

Interesting. Would you do that with your property when it is finished being renovated?

Here is the trouble Moshe. 95% of people are good, honest human beings. That goes for tenants, landlords, agents and even owner occupiers. It is always the 5% that make life difficult for the majority. If you own a property worth .... $200,000 - $2,000,000 of your hard earned cash, you need to make sure you know who is going to be looking after it (& mowing the lawn!)

As a letting agent, I agree that the 1form thing is bad, but it is NOT a monopoly. In fact we do not use them or accept applications through them. We are members of TRA and it also has an online application form that is free and will store your details etc. We do not capture or store the more personal or private details, rather they are captured by the web site and we trust that they are sufficiently secure and encrypted etc. Anyone hacking in to our system wont have access to our tenants sensitive details.

Moshe Reuveni said...

Part 1 of my reply:

If my writing has failed me then I apologize; I never meant to say that “that owners/agents should let their property to [me] on the promise that [I am] a good person and that [I am] who you say [I am]”. What I meant to say is that through their agents, the landlords are abusing their positions of power; neither seem to mind that too much.
It’s not like the same cannot be achieved in other ways, you know. Being an immigrant I have the advantage of knowing how real estate transactions are committed in other countries (specifically, Israel and the UK). Sure, I cannot say those countries have perfected the methodology, but I can see some glaring issues with the way the Aussie renter is treated. Want an example? The best I can give is the way the real estate agents seem to get out of their way to separate the landlord from the renter. Granted, some landlords do not want to have any interaction with the people on the other side; however, can we truly take it for a fact that no landlord whatsoever sees the benefit of interacting with the people renting their place? In my particular case, I can clearly see how I can happily keep my landlord informed about all sorts of things that take place in the property I have rented. It is exactly because we are talking about properties “worth .... $200,000 - $2,000,000” that makes this line of communication beneficial, yet it is actively subdued. Could it be that the real estate agents do not want to find themselves redundant? Oh, how dare I even suggest that!
Obviously, I am obliged to add a disclaimer: I have no idea how you do your work, nor am I versed with how most real estate agents do their work. I can only testify from my own experience and limited, often distorted, hearsay from friends. However, my impressions are valid within the context of the escapade this post dealt with: we did see more than twenty properties, offered by multiple offices of at least five major real estate companies as well as a couple I have never heard of before.
Which brings me to the subject of 1form. Sadly, none of these real estate agents that I had the pleasure of dealing with accepted online application other than 1form’s; our options were to either use their particular paper forms or use 1form. Again I will stress that I have dealt with virtually all the major real estate players of the area we were looking at and clearly found no other option. As far as we were concerned, 1form was a monopoly.

Moshe Reuveni said...

Part 2 of my reply:

Moving on to the matter of privacy. Stating that “Anyone hacking in to our system won’t have access to our tenants sensitive details” is obviously wrong; there is plenty of malware to prove that. At this very moment, millions of computers all over the world are under the elusive control of people who mean wrong by the computers’ owners and these owners have no idea what is going on. It is also obvious that the database where the online application data resides can be hacked: if the Pentagon can be hacked so can this server (and to set your mind at unease, so can your online banking servers; it is just a question of how much effort one is willing to put to the task). Once hacked, systems are regularly found wanting: the great Sony corporation did not bother encrypting its users’ information, and thus my details as well as the details of 70 million others (!) were stolen. Surely Sony can afford better security than a chain of Australian real estate agents? There is not a week that passes by without multiple notices of similar leaks, some of which rivalling the size of Sony’s.
The reality is that your online privacy is never guaranteed. What we can do about it, though, is take measures to mitigate dangers. And the easiest way to start is to only collect the information you need in the first place!
For example, do you really need all the information on an application form all of the time and from each and every applicant? I am pretty sure you don’t, at least judging by the information we had to fill for each of our applications (it is interesting to note all the different real estate agencies asked for essentially the same info). I can make this claim by the speed of reaction to some of our applications: that speed meant there was no way the agents could have gone through it all. So why can’t the agents ask for the essentials first and move on to the less essential details only with the better applications?
Specifically in the context of the 100 points of ID, by far the most sensitive of the items collected, why do these need to be collected from each and every applicant at the point of making the application? Why can’t these be verified at the end instead, prior to sealing the rental deal? And why do these details have to be maintained over time, without a clear policy for when they are rid of? And is there any thought paid to the fact that each time an agent looks at these documents a copy is made, because that is the very nature of a digital transaction?
Again and again the answer seems to be that no consideration is paid to the needs of the renter; the real estate agents abuse their power for the sake of making their lives easier, while the renters have to bite the bullet or risk the great outdoors.