Anindita Chatterjee
Updated on: October 12, 2024 8:42 pm GMT
The rising trend of rent-tech platforms in Australia has left many renters feeling vulnerable and pressured as they navigate new payment systems with added costs. Platforms like Ailo are charging tenants fees to manage their rent payments, pushing renters into a corner where declining the technology feels risky.
The Growing Rent-Tech Landscape
An increasing number of real estate agents are adopting so-called ‘rent-tech’ platforms to streamline the rent payment process. Currently, there are nearly 60 products available, aimed at making rent payments easier, screening tenants, and managing property maintenance. However, the implementation of these apps often comes with additional costs for renters.
- Cost of Convenience: Renters like Tim, a Melbourne resident, are charged extra monthly fees to pay their rent electronically. This fee increased from $4.83 to $5.10 when his rent went up. Tim expressed frustration, stating, “You don’t want to risk being on one of their blacklists for being a difficult tenant.”
- Limited Options: While some apps offer free methods of payment, such as Ailo’s manual process, it lacks automation. Renters must re-enter their bank details monthly, forcing them to choose between convenience and cost.
Consumer Pressure and Tenant Rights
For many Australian renters, the choice of which payment platform to use is often dictated by their property managers or landlords. In fact, a recent 2023 survey found that 41% of renters felt pressured to use specific third-party platforms for payments.
- Impacts on Renting Dynamics: According to Leo Patterson Ross, the chief executive of the NSW Tenants’ Union, “It’s not that you get to choose which of the various rent payment platforms you might think is suitable. It’s the one that the agent or landlord chooses.” This lack of autonomy leaves many renters feeling cornered.
- Legal Concerns and Experiences: Some renters have faced serious consequences for opting out of payment apps. Guy Moore, a Sydney resident, argued against moving his payments to the app due to worries about fees and data privacy. Following a brief delay, he was flagged as being in rental arrears, leading him to take legal action where he was eventually awarded $1,600 for the distress caused.
A Closer Look at the Major Players
Various rent-tech companies are trying to capture the complete rental experience, from applications to payments. Some notable platforms include:
- Ailo: Promoted as a user-friendly payment method, it facilitates transactions but also enforces service fees for automated payments. An Ailo spokesperson defended their model, noting that 40% of requirements through the platform incur no fees.
- Rent.com.au: This platform has features specifically designed for renters and reported $1.4 million in income from renter products in 2023.
- Kolmeo: Scott Bateman, chief executive of Kolmeo, stated that if there are costs associated with using a rent tech platform, these should generally fall on the property managers who benefit directly.
The Backlash Against Rent-Tech Fees
The emergence of these fee structures has sparked a backlash from both tenants and advocates. Many believe that the responsibility of costs should not lie with renters, especially when they already face a high cost of living.
- Community Response: Advocacy groups like Better Renting are raising alarms about the increased burden being placed on renters. Joel Dignam, the executive director, commented on how these tech solutions are benefiting landlords more than renters. “These companies have this spiel … [that they are] for renters – but they are very much for landlords,” he said.
- Consumer Attitudes: Sam, another Melbourne renter, expressed discomfort with Ailo being integrated directly into his rental agreement. “We would have preferred not to do this,” he said, referring to the need to switch platforms, “because it’s also another application that collects our personal data.”
Impact on Renting Traditions
As technology advances, the renting experience is under transformation. New payment methods are attracting property managers due to their efficiency. However, long-standing traditions of renting—often based on personal interactions and manual processes—are being overshadowed by technology.
- Changing Norms: Samantha Floreani, a researcher at Monash University, notes that there’s a move toward an ecosystem that covers the entire rental lifecycle. “Many of these companies are seeking to capture the entire renting life cycle,” she explained.
- Dissonance Between Renters and Landlords: While some claim enhanced efficiency for renters, many still feel pressured and forced into payment methods that may not serve their interests. The true cost of convenience is being debated heavily.
About one-third of homes in Australia are rented. This creates a bit of stress between new rent technology and the rights of people who rent. As technology changes how we rent homes, it’s really important to make sure that renters are treated fairly. We want to make sure they don’t have to pay extra fees because of automatic payment systems.
