Agents face jail for renter super advice

The corporate watchdog says real estate agents face jail time if they advise struggling tenants to consider dipping into their superannuation to pay rent. 

The Australian Securities and Investments Commission on Friday sent a letter to the real estate institutes in each state saying it was aware some real estate agents are advising tenants who are unable to pay their rent, or who may find themselves in such a situation in future, to consider applying for early release of their superannuation.

Workers laid off during COVID-19 pandemic have been told by government they will be allowed to access up to $20,000 in super savings over the next two years.

However, ASIC warned any property agent who advises renters to do so may be in breach of the Corporations Act and face a five-year prison term, a $126,000 fine, and a $1.26 million fine for their business. 

“Tenants facing financial difficulty need sound financial guidance and potentially debt counselling,” ASIC said. 

“Specifically pointing them to and recommending them to consider the specific possibility of accessing superannuation is, again, likely to amount to a breach of the Act.” 

An increasing number of people are finding themselves without work due to coronavirus lockdown measures.

National cabinet last weekend announced a moratorium on evictions and encouraged commercial tenants, landlords and financial institutions to “sit down together” to find a way through to ensure that businesses can survive.

National Cabinet is expected to further address residential and commercial tenancies when it meets on Friday.

The discussion is expected to cover potential land tax waivers for commercial landlords.

The ABC reported on Friday an incident where a tenant in Brisbane was told their ability to dip into their super would be noted on their rental history in an email sent about half an hour after government’s six-month moratorium.  

Meanwhile, property site Domain earlier this week wrote that some Victorian tenants seeking rental decreases have been asked to list how much they spend on food, bills and entertainment, whether they have accrued leave hours, and whether they had drawn down on their superannuation. 

In some cases, property managers have contacted tenants before the subject was raised, Domain reported. 

ASIC said financial advice must only be provided by qualified and licensed financial advisers, or financial counsellors, not by real estate agents who neither hold the requisite licence, nor are an authorised representative of an Australian Financial Services Licensee. 

The watchdog said it intends to monitor this situation closely and “will not hesitate to act swiftly to protect vulnerable consumers”.

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