Some real estate agents scrambling to ensure rents are paid have been giving unlicensed financial advice to tenants struggling to pay rents, due to COVID-19.
Tim Mullaly, Executive Director of Australian Securities & Investments Commission laid out the concerns. He wrote: “ASIC is aware that 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. Recent media reports and social media commentary outlining this conduct by some real estate agents is of significant concern to ASIC.”
It’s a harsh reminder for all real estate agents to note, “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”.
Be warned, anyone contravening the Corporations Act risks severe financial penalties and up to maximum of 5 years imprisonment!
Instead, you must point those tenants facing financial difficulty in the direction of sound licenced financial guidance and/or debt counselling. Recommending tenants to consider the specific possibility of accessing superannuation breaches the law.
Tim Mullaly states: “ASIC intends to monitor this situation closely, and if contraventions of the licensing requirements of the Corporations Act are found, ASIC will not hesitate to act swiftly to protect vulnerable consumers.”
A reminder: If real estate agents need to give guidance to a tenant regarding their financial affairs, they should consider refering tenants to information available on the ASIC Moneysmart website (www.moneysmart.gov.au).
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