Rent bidding, applications and option fees

Rent bidding

Landlords and their agents are prohibited from asking or pressuring prospective tenants to pay more than the advertised rental amount to secure the tenancy, known as “rent bidding”.  

Landlords or their agents:

  • must advertise or list the rental property for a rent at a fixed amount and not in a range or “from” a particular amount.  
  • must not encourage a potential tenant to offer to pay more than the advertised rent amount.

The conduct that constitutes soliciting rent bidding would be broadly defined to capture circumstances where the landlord or their agent pressures or encourages the prospective tenant to offer more than the advertised price.  For example:

  • “someone else has made an offer, would you like to match it?”; 
  • “there are lots of people interested in this property, you can secure it if you offer more rent”; and 
  • “you have not been working full time for very long, you might want to strengthen your application by offering more rent.” 

Landlords or their agents may accept above the advertised rate if freely offered by the prospective tenant.  

If a tenant proposes offering a higher rent, the lessor or their agent must respond along the lines: “That is a matter for you and not something I want to comment on. You need to make your own decision about the value of the property and the rent you wish to pay”.

If a landlord or agent asks or encourages a tenant to offer more money, contact Consumer Protection on 1300 30 40 54.

Rent applications

The lessor can ask a prospective tenant to complete an application form to help them assess the suitability of a tenant.

A lessor can also look in a tenancy database. If they do they must let the prospective tenant know, in writing, which database they use and if they find any information.

A lessor should treat rental applicants and tenants equally and fairly when vetting their suitability to commence or renew a tenancy at a property.  The Equal Opportunity Commission provides a range of fact sheets and publications to assist lessors and tenants to understand their rights and obligations.

Option fees

A tenant can also be asked to pay an ‘option fee’. An option fee is charged to the prospective tenant while their application is being considered and are capped at $50 or $100 (depending on the rent and location of the property as below).

Option fee table based on location
Weekly Rent of the Property Location of the Property
  Above 26th parallel* Below 26th parallel*
$0 to $500 $50 maximum $50 maximum
More than $500 and less than $1200 $100 maximum $100 maximum
$1200 or more $100 maximum $1200 maximum

* Note: The town of Denham in Shark Bay is just north of the 26th parallel.

If the application is successful, the option fee paid must be deducted from the first rent payment or the money returned to the tenant. If the applicant is not offered the property, the option fee MUST be refunded to them by cash or electronic transfer as soon as possible, and at the latest within 7 days of the application being refused.

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