The corporate watchdog has warned real estate agents they face jail time if they advise struggling tenants to consider dipping into their superannuation to pay rent.
The Australian Securities and Investments Commission has written to real estate institutes in each state, saying it was aware some real estate agents were advising tenants who were unable to pay their rent, or who might find that in future, to consider applying for early release of their superannuation.
Workers laid off during the COVID-19 pandemic have been told they might be allowed to access up to $20,000 in super savings over the next two years to help pay their bills.
ASIC warned any property agent who advised renters to do that might 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 on Friday
“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 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. The advice came in an email sent about half an hour after federal government announced a six-month moratorium on evictions.
The New Daily revealed on Friday that agent Ray White Ascot Vale is one of those that has asked to tenants to say if they intend to apply for early access to their superannuation.
ASIC said financial advice must be provided only by qualified and licensed financial advisers, or financial counsellors. It cannot be provided by real estate agents, who neither hold the requisite licence, nor are authorised representatives of an Australian Financial Services Licensee.
The watchdog said it intended to monitor the situation closely and “will not hesitate to act swiftly to protect vulnerable consumers”.
ASIC’s letter comes after Prime Minister Scott Morrison last weekend announced a six-month moratorium on residential and commercial evictions as an increasing number of people find themselves without work due to coronavirus lockdown measures.
On Tuesday, Mr Morrison urged landlords and tenants to work together to reach an agreement if the tenant could not pay rent due because of the economic fallout of the coronavirus.
“They are going to need each other on the other side,” he said.
“They are going to need each other – they are going to need the premises and the landlord is going to need the tenant.”