Are landlords to blame for rental services’ deceptive ads?

by Joe Zekas on 2/25/13

Chicago’s rental services routinely spam Craigslist, Trulia, Zillow, hotpads and other websites with high-volume bait-and-switch advertising. They habitually advertise properties without having the written authorization the law requires. They promise renters expert professionals, but many of their agents can barely find their way around the block.

One of my correspondents contends that the blame for this mess falls squarely on Chicago’s landlords and management companies. The more I consider the issue, the closer I come to concluding that he’s right.

Most landlords and major management companies do not allow any rental services to advertise their properties. Some authorize advertising, subject to specific conditions, by only a small number of rental services.

In any given week you can find 10s of 1,000s of illegal apartment ads, i.e. ads placed without written authorization, on Craigslist alone. You’ll see 100s of ads for the same building, many of those ads containing deliberately erroneous information, and many of them placed by rental services with whom the management companies refuse to do business. The ads, collectively, have a simple goal: to deceive and frustrate renters into using a rental service to find their next apartment.

The management companies have the power, under state law, to call a quick halt to the repetitive, illegal, bait-and-switch ads. All they need to do is communicate directly with the offending rental services, order them to cease the ads, and follow up with complaints to the state licensing authorities if the rental services fail to comply. I’m unaware of any instances of such complaints having been filed.

What accounts for management company / landlord inaction? Many of them view their situation as what game theorists would call a Nash equilibrium – although I doubt they’d use that phrase to describe it. They’re frustrated with the rental services, angry at the behavior they see, perceive it as being bad for renters and for their buildings, but don’t perceive an advantage in taking unilateral direct action.

A number of landlords have opted to take action indirectly, by supporting our Craigslist Apartment Cleanup campaign. We plan to file complaints with the state regarding illegal advertising, and hope it will result in the revocation of some rental service companies’ licenses. That may or may not have an impact on the behavior of the remaining rental services and, in any event, won’t have as immediate an effect as landlords taking direct action would.

Are landlords to blame for rental services’ deceptive ads? Landlords are aware of a bad situation, have the power to correct it, and aren’t taking the most effective actions to correct it. So, yes: they bear some responsibility for illegal Craigslist bait-and-switch spam ads.

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