Industry voice frustration over illegal agents and the system

May 3, 2018 | Local Property, News

“It is one thing if the Board is doing absolutely nothing, but another if substantial efforts are made, but they are unable to cope with the scale of the problem. It is therefore not a given that applying for an order will necessarily meet with success”

Not only unregistered agents but also a perceived lack of monitoring by the EAAB on compliance with educational and training requirements have many realtors fed up and demanding the system improves.

Letters poured in following the ‘Open Letter’ by realtor Andile Ben-Mazwai on the issue of illegal agents and his proposal that the property industry take legal steps to force the Estate Agency Affairs Board (EAAB) and police to take more decisive action against illegal property traders.

Jess Fortune from Bellville wrote he and a colleague both lost clients recently to the same unregistered agent whose principal is apparently also without a valid Fidelity Fund Certificate (FFC). He says a principal from another agency allegedly even wrote a letter to the unregistered agency threatening to report them but it seemed they just continue with business as usual.

“At the moment we feel helpless as we know that the EAAB does not have the resources to do anything,” he says adding that he has little faith that the Board would do anything even if they could.

Berry Everitt, CEO of Chas Everitt International Property Group said most agencies feel the same way as Ben-Mazwi. “It seems that the only ones who are inspected and ‘policed’ by the EAAB are those agencies that are operating legally, and although we complain about illegal operators, we get no result.  What the industry needs is self-regulation where we report directly to the relevant Minister, said Everitt.

Ted Frazer, Seeff National Marketing Manager, emphasized the importance for sellers, buyers and anyone in property to enquire and check credentials of any property agent they are dealing with adding that it was for the protection of all property stakeholders.

Desiree Bedhasie from Richard’s Bay wrote the EAAB has a lot of educational requirements and fees that registered agents are required to pay yet “there are agents/principals in the industry for almost 20 years who still do not have their NQF and PDE 4&5 respectively”.

Then there is also the issue of interns who remain ‘interns’ too long. Karin de Klerk from George wrote she feels it is “grossly unfair” that some remain ‘interns’ for more than four years yet earning full commission without having obtained the NQF4 qualification or paying the R2000 yearly fee.

Pule Motaung wrote he is glad this point has been raised as there are many illegal realtors, but says there are no stakeholders willing to take action. “It is so sad that we comply with all regulations with the Board but bogus agents they will even sell your stock without any fear,” he said.  Motaung asked the EAAB, Rebosa, attorneys and government to convene an urgent meeting for all parties to discuss the matter ASAP.

Bedhasie said it seems as if the EAAB, Rebosa and the Property Practitioners Bill come up with rules, regulations and procedures for agents to pay fees, implement and comply, but no-one is monitoring compliance by all agents and agencies and no-one is enforcing non-compliance.

“The question is why must some comply and pay these huge fees and the rest benefit from non-payment, non-compliance, unprofessionalism and incompetence resulting from brand damage/poor reputation for us?” asked Bedhasie.

Andre de Villiers with 34 years in real estate wrote in his opinion the real problem is not the policing of the regulations, “but the regulations themselves that have become an unrealistic burden both in terms of time and money to so many good agents”. “The entire structure is now beyond tedious and very ill-considered for our country and our industry,” he said.

A few reckoned the property industry had some introspection to do. Quintus Neethling wrote, while agreeing with Ben Mazwai 100% about the property profession, estate agents in his opinion had some introspection to do before taking on illegal and dishonest agents. He said he refers to agents advertising free valuations thereby “stealing money from qualified professional valuers who are registered with the South African Council of Property Valuers Profession, and who are the only ones who can call a valuation a valuation”.

“We as agents can only call it an opinion of value,” said Neethling.

Graham Herbert, mortage professional with 23 years’ experience and not an estate agent, said in his opinion there’s no point to the whole debate as the property sales process can’t be owned only by the property industry. Private sellers, same as agents, have access to technology and information on market trends and valuations as well as the same advertising portals. “My view, an estate agent is a facilitator of a sale, they are not the owners of the process. To regulate the industry, is like trying to claim ownership of the sales process.”

In the letters the solutions offered included that attorneys/lawyers should not accept or execute any property deal without valid Fidelity Fund Certification if a property agency is involved and similarly online property portals should not allow agencies without valid FFCs to advertise. Others was for self-regulation and shutting down the EAAB who is perceived as inefficient and unable to handle the number of applications from agents. There was even a suggestion for a “‘Hawks’ type of operation” or employment of “night club bouncers” to weed out the illegal property traders.

Jan le Roux, CEO of Rebosa, said Ben-Mazwi makes valid points. “It has long been an irritation of the industry that not enough is done in acting against agents/individuals trading illegally,” said Le Roux. With regards to Ben-Mazwi’s suggestion of possible legal steps, Le Roux said Mandamus Action is certainly a possibility, but that the response of the EAAB will possibly be that they have limited resources and support from the police.

“It is one thing if the Board is doing absolutely nothing, but another if substantial efforts are made, but they are unable to cope with the scale of the problem. It is therefore not a given that applying for an order will necessarily meet with success,” said Le Roux.

Le Roux further explained that the new Property Practitioners Bill, once in effect, will ensure that conveyances would be breaking the law in paying commission to unregistered agents. This should address illegal trading as far as sales are concerned even though it will address issues as far as rent letting is concerned.

“The cost of legal action against the Board, the time it may take, with the strong possibility that the Bill will address the issue makes one hesitant to go to such lengths at the moment,” concluded Le Roux.

Nikita Sigaba, acting CEO of EAAB, said in a statement to Property Professional that the Board intends to remove illegal agents from the public sphere as this undermines not only the rule of law but also the credibility and future of the profession. He said 120 illegal agents were prosecuted in the 2017-’18 financial year of which more than half (65) were prosecuted for illegal trading.

“It is very difficult to quantify the actual number of illegal practitioners currently since they are not registered anywhere. We rely on the public and the industry as a whole to provide us with this information which will enable the Board to act against such behaviour,” says Sigaba. Sigaba’s full statement is on the Property Professional website (http://propertyprofessional.co.za/dealing-with-illegal-agents-is-a-complex-issue-says-eaab/).

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