Online marketplace Gumtree says it will change its rental property ads after the Tenants' Union of NSW accused it of breaching the state's anti-rent bidding laws.
Rent bidding is when prospective tenants offer more than the advertised price to secure a place to live.
It has been illegal for real estate agents to solicit or encourage bids in NSW since December 2022.
The NSW government extended the laws to cover landlords and third-party platforms such as Gumtree and Snug in August last year.
Tenants' Union of NSW chief executive Leo Patterson Ross told ABC Radio Sydney his organisation lodged a complaint in August with Fair Trading NSW about Gumtree's "make an offer" function which appears alongside all ads, including its real estate section.
"They're not really built for real estate and so every single listing has an offer system and they've never bothered to change it and it doesn't appear, at least from the outside, that Fair Trading has been able to stop them," he told Breakfast presenter Craig Reucassel.
After being contacted by the ABC on Wednesday, Gumtree chief product officer Coen Horrevoets committed to removing the "make an offer" function on rental property ads.
"Gumtree is visited by millions of Australians each month where our 'make an offer' function appears across multiple categories throughout our classifieds without it being specifically designed for rental properties," Mr Horrevoets said.
"While we have not received any complaints from any customers or the state government, we are deactivating the feature."
The feature remained live as of Wednesday night with more than 500 properties listed in Sydney for rent.
Mr Patterson Ross was pleased Gumtree was listening to the tenants' union's concerns, but questioned why it took so long to comply.
"It's been six months or so since the reforms came in, it shouldn't really take a radio interview to get a big company like that to change," he said.
'Desperate times'
While real estate agents can't solicit a bid, it is not illegal for tenants to make an offer unprompted and an agent or landlord to accept a higher than advertised price.
Mr Patterson Ross said the practice remained rife in the industry.
"It happens both illegally under the current laws, and legally where the tenants are offering the money above [the advertised price]," he said.
Loading...Fiona King said she reluctantly offered $15 a week extra to secure a rental property in Frenchs Forest in Sydney's north in June 2022.
While it was completely legal how it unfolded, she said it was a sign of how tough many renters were finding it.
"I felt really guilty doing it but I now understand why people do it, it's desperate times," Ms King said.
Another man, who applied for a house in a regional NSW town in November last year, said the real estate agent asked him whether he would match another applicant's offer to pay $25 extra a week.
At the time, the house was the only one available for rent in the area his family lived.
The man, who did not want to use his name as he has ongoing dealings with the real estate agent, said he did not feel he had a choice.
"If you need a rental to live, you just do what you have to do," he said.
Minister rejects outright rent bidding ban
NSW has ruled out banning unsolicited rent bids from hopeful tenants.
NSW Fair Trading Minister Anoulack Chanthivong said an outright ban would push up prices.
"If we move to say that there's only one price advertised and that's the only price that's taken, what will happen is that property owners will actually then list a price that's substantially higher than what the normal price would actually be," Mr Chanthivong said
"So in one sense, we are normalising and embedding a premium on what the real true fair market price would actually be. Now, that concerns me quite a lot."
He encouraged anyone who has experienced rent bidding they believe may be illegal to report it to Fair Trading NSW.