AAP Finance

Agents face jail for renter super advice

By AAP Newswire

The corporate watchdog says real estate agents face up to five years jail and a $1.26 million fine 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 the COVID-19 pandemic have been told by the federal government they will be allowed to access up to $20,000 in super savings over the next two years to offset economic hardship.

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."

The watchdog's warning comes as Prime Minister Scott Morrison on Friday said national cabinet was still working on further protections for residential tenancies, having already announced a six-month moratorium on evictions.

Mr Morrison also warned renters the moratorium does not mean tenants do not have to pay rent.

"On residential tenancies you will recall there was a moratorium on evictions ... that doesn't mean there is a moratorium on rents," Mr Morrison said.

"It means people are responsible for their rents but there is a moratorium on evictions. We won't have anyone thrown out of their homes, that's very important."

Mr Morrison also urged landlords to "do the right thing" by their tenants.

"Respect each other's livelihoods and support each other's livelihoods whenever you can," he said.

National cabinet is also close to finalising a mandatory code that would apply to commercial landlords and tenants on the JobKeepers program who are turning over less than $50 million.

The code - which will reportedly require landlords to give rental reductions for revenue loss - is set to be finalised next week.

An increasing number of businesses and individuals people have found themselves in financial hardship amid coronavirus lockdown measures.

This has, in some cases, created tension when it comes to the rental expectations of landlords and the measures to get money out of tenants.

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 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.

Real Estate Institute of Australia president Adrian Kelly said agents should not be providing financial advice to anyone.

"Agents can give guidance to a tenant as to where information regarding their financial affairs is available such as the ASIC Moneysmart website," Mr Kelly said.

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".