Landlords, property managers told not to go through potential tenants' bank statements

Handing over house keys.
The issue of the 'KFC test' was raised last year. Photo credit: Getty.

The Privacy Commissioner has released new guidelines on Monday outlining what landlords and property managers can - and cannot - collect from prospective tenants.

Among the things detailed on the 'what should I not collect' list is the controversial "KFC test".

The issue of the 'KFC test' was raised last year after New Zealand First MP Darroch Ball released audio of a select committee oral submission. 

In the submission, Auckland-based property manager Rachel Kann revealed she routinely asks for bank statements to determine whether tenants could pay rent.

"I don't just want to put a tenant into a property and no sooner have they been put in they can't afford the rent," Kann told the select committee.

"They're paying someone's mortgage. I see a lot of people who are low socio-economic and their bank statements literally will read, 'KFC, McDonalds, the dairy, court fine', goods they can't afford. I see a lot of mismanagement of money."

"It's very clear we have some morally-bereft landlords," Ball responded to the claims.

"The vulnerable, poor, young and desperate are being forced into forgoing their privacy in order to have the chance to secure a property."

Monday's guidelines say landlords can ask tenancy applicants for their names and contact details, proof of identity, whether the individual is 18 or over, the expected length of tenancy, reference contact details, the number of occupants, pet ownership details and whether the tenant is a smoker.

When a landlord has chosen their preferred candidates, they are able to request a credit report and their date of birth, a relevant criminal history check, details for an emergency contact person, necessary vehicle information and proof of income.

The new guidelines say landlords and property managers should not ask a prospective tenant for their nationality, ethnicity, citizenship, physical or mental illness (if any), personal beliefs, marital status, gender and sexual orientation, employment history, proof of insurance or broad consent to collect information from "other sources". 

Also on the 'should not' list is asking a potential tenant for their current expenses or for details on the rent they previously paid.

In short, property managers and landlords may ask a preferred applicant for their proof of income and may request a credit check, but should no longer perform the 'KFC test' on their bank statements.


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