There has been an increase in homeowners and agents trying to get on the holiday letting bandwagon to benefit from the Western Cape’s influx of visitors, says Annette Evans, GM of the Institute of Estate Agents (IEASA) Western Cape.
However, there has been some confusion as to whether or not a holiday letting business and its agents are required to hold Fidelity Fund Certificates (FFCs), which is what is stipulated by the Estate Agency Affairs Board (EAAB) as a necessity for agents handling property transactions.
In a recent case encountered by the IEASA Western Cape, the owner let out his home as holiday accommodation without knowing how much his property had been rented out for, or all the details surrounding the use of his property. All he received from the rental agent were a few ad hoc payments for what was deemed to be the owner’s share.
“I recently interviewed a few reputable holiday letting business owners to get their input on the industry and common practices. They confirmed that their processes maintain absolute transparency as dictated by the EAAB code of conduct,” says Evans. (Download it here.)
Reputable holiday letting companies should adhere to the following steps and procedures:
• An initial mandate between the owner and the agency signed by both parties, stating the commission payable – the majority will charge between 15% and 20%.
• Each booking approved by the owner beforehand.
• Each contract signed by the owner and the client.
• Commission for each let to be invoiced separately and linked to a booking.
“Anyone found guilty of an offence by the EAAB risks being disqualified from practicing in real estate. For those who have been wronged by unscrupulous action, there is recourse via the EAAB,” concludes Evans.
