Last month Consumer Protection issued a warning to real estate agents and landlords about the risks of using third party payment platforms.
As a tenant, you may have been asked to use one of these services to pay your rent, but did you know this means you might not be protected by Western Australian law should something happen to the real estate agent's business? The same goes for landlords who may be receiving payments from their real estate agent via a third party payment service.
The software is an automated payment system and can involve another separate entity and overseas banks. This means when you pay your rent, it won't be going into a protected trust account.
Under the Real Estate and Business Agents Act 1978 (WA) (REBA Act) agents must deposit funds they receive from real estate transactions into a nominated trust account. Third party platforms are not licensed real estate agents and are not required to use trust accounts.
What does this mean for you and your rent? It means if something goes wrong, you are not covered by a fidelity guarantee account under the REBA Act. This is an account, managed by Consumer Protection, that reimburses people who suffer loss of money or property held in a trust account through the criminal or fraudulent actions of a licensed real estate or business agent, real estate settlement or business settlement agent or their employees in the course of a real estate settlement or business broking transaction.
Not only have you lost serious protections under the REBA Act, these third party payment platform providers are generally overseas and if something goes wrong with them, your money is gone.
Are you also paying a few dollars extra on top of your rent in fees and charges to use a third party payment platform? This is not allowed.
A tenant cannot be charged any fees in addition to the rent payment. For example, you pay by credit card and the payment platform charges a credit card fee on top of the rent payable. In this case the agent or landlord must absorb that cost and it cannot be passed onto you.
You can only be required to pay rent using a third party platform if it is a term of the lease. During the term of a lease the agent cannot vary the lease to change the method of paying rent unless you agree to it.
Consumer Protection recommends carefully reading a lease agreement and asking questions, including about the method of paying rent prior to signing.
Any agent who has engaged the services of a third party payment platform is being strongly encouraged to inform their tenants and landlords about the loss of their statutory protections if things go wrong.
