Real estate agents suggest struggling tenants access superannuation to pay rent, as ASIC warns on unsolicited financial advice.
Real estate agents suggest struggling tenants access superannuation to pay rent, as ASIC warns on unsolicited financial advice.

Watchdog warning after tenants told to pay rent with super

Australia's corporate watchdog has warned tenants to ignore unsolicited financial advice after real estate agents were caught suggesting they access their superannuation early to pay rent.

A war of words has also erupted between the Australian Council of Trade Unions (ACTU) and the Real Estate Institute of Australia (REIA) after the peak union body asked the Institute to tell its members to stop giving tenants the advice.

The Australian Securities and Investments Commission (ASIC) said only qualified individuals were able to provide advice on accessing superannuation, and warned early withdrawals could impact retirement options.

Labor frontbencher Stephen Jones wrote to ASIC asking the corporate watchdog to Picture: Supplied
Labor frontbencher Stephen Jones wrote to ASIC asking the corporate watchdog to Picture: Supplied

"Anyone who gives financial advice must have an Australian financial services (AFS) licence or be an authorised representative of a licensed business," an ASIC spokesperson told News Corp Australia.

"You should only seek advice from licensed advice businesses or authorised financial advisers. "You will be better protected if things go wrong and you will have access to free dispute resolution services."

The warning comes after News Corp Australia recently revealed renowned Victorian real estate chain Buxton, and Leo Tsimpikas Real Estate in Brisbane provided a list of suggested actions tenants could take if their income had been affected.

Both agents suggested tenants could access superannuation early, apply for Centrelink payments and ask financial providers to pause loan repayments.

 

A letter sent from a Buxton Real Estate office to tenants. Picture: Supplied
A letter sent from a Buxton Real Estate office to tenants. Picture: Supplied

Labor's Shadow Assistant Finance Treasurer Stephen Jones has also called on ASIC to issue a warning" to real estate agents after evidence of them providing "unqualified financial advice" had emerged.

"There are now widespread media reports of real estate agents advising tenants to access their superannuation funds if they are facing difficulty in paying their rent. We have received copies of some of these communications," Mr Jones wrote in a letter to ASIC commissioner James Shipton seen by News Corp Australia.

"We are concerned that this advice may not be in the best interest of individuals."

"Financial advice should only be provided from qualified advisers and financial counsellors, not their real estate agent," he wrote.

"We ask you to consider issuing a warning on this matter."

 

Australian Council of Trade Unions president Michele O'Neil. Picture: Aaron Francis
Australian Council of Trade Unions president Michele O'Neil. Picture: Aaron Francis

 

Real Estate Institute of Australia president Adrian Kelly. Picture: Supplied
Real Estate Institute of Australia president Adrian Kelly. Picture: Supplied

 

The ACTU has also taken aim at agents' "unhelpful and unsolicited financial advice".

ACTU president Michele O'Neil has written to the REIA asking it to instruct members to stop sending it.

"We have been made aware that many renters have received threatening correspondence from their real estate agents regarding the payment of rent and notice around evictions," Ms O'Neil wrote to REIA president Adrian Kelly.

She said ACTU members had told of an unwillingness among landlords and real estate agents to "broker a temporary rent freeze or reduction through this crisis", who had also advised tenants to withdraw from their superannuation and presumed their eligibility for JobSeeker payments.

She asked the REIA to "desist from providing financial advice to tenants" and suggested implementing temporary rent freezes.

She said it should tell landlords that they could access mortgage relief "through nearly every bank".

In a response to the letter, Mr Kelly told News Corp: "The priority for our people at the moment is looking after our tenants and property owners in particular those that have lost employment."

"I would have hoped that the ACTU would be doing the same with its own members in achieving practical outcomes for everyone instead of writing letters making scurrilous claims."

Prime Minister Scott Morrison said the states and territories would move to ban rental evictions for the next six months.

It's understood the National Cabinet meeting on Friday will further consider the issue of rental and commercial tenancies.

david.aidone@news.com.au

Originally published as Watchdog warning after tenants told to pay rent with super



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