Will the 2014 Fidelity Fund Certificate deadline damage the industry?
By Colleen May
Have you got your Fidelity Fund Certificate (FFC)? All estate agents must receive certification for the National Qualification Framework (NQF) level 4 or level 5 before October 2013 or they will not be issued with FFCs for 2014. But is this deadline realistic considering what the process will entail and given the troubles the Estate Agency Affairs Board (EAAB) has had in the past, or is the EAAB setting itself and the property industry up for failure?
The Estate Agency Affairs board website states: “As part of the Estate Agency Affairs Board statutory mandate and legislation, it is the requirement of all estate agents wishing to operate within the real estate property industry to be in possession of a valid Fidelity Fund Certificate (FFC).”
The validity of an FFC is from 1 January of a year to 31 December of the same year and estate agents are therefore required to renew by no later than 31 October of each year to obtain a FFC for the following year.
Tony Clarke, managing director of the Rawson Property Group says: “It is now absolutely clear that an extension, probably of a whole year, is needed on the January 2014 deadline given by the EAAB to unqualified estate agents to obtain the now mandatory NQF4 and NQF5 qualifications.” Given the fact that only 32 718 estate agents (comprising 10 373 fully qualified agency principals, 12 162 full status or fully qualified estate agents, 10 183 interns learning to become fully fledged agents and 47 attorneys) currently have their FFCs and it is unclear how many of the FFC holders have the mandatory NQF4 and NQF5 qualifications, the deadline that has been given is simply not realistic.
Another area of concern is how this will play out in the more disadvantaged areas where there are more unqualified estate agents. Estate agents who don’t hold the necessary qualifications by January 2014 will be operating illegally, and will not be entitled to collect fees. “If the board sticks to its view point, it will simply mean that for much of 2014 there will be too few estate agents to serve the South African residential market. Almost certainly what will then happen is that homes will be sold illegally, that is, by estate agents not in possession of FFCs. The residential sector’s efforts to transform the industry will be especially hard hit,” explains Clarke.
Lanice Steward, managing director of Knight Frank Anne Porter, says, in response to a question asked about the deadlines to get the necessary qualifications to be able to renew their FFCs, that agents must take the EAAB seriously. “Agents must get their qualifications sorted out and must do their professional designation examination (the next date is in September), which is giving agents enough time. There are agents who have managed and many who have actually done theirs when it was first announced, years ago,” Steward says.
Sharing this opinion is Andrew Golding, CE of the Pam Golding Property Group: “Pam Golding Properties has consistently supported the professionalization of the real estate industry and therefore welcomed the re-qualification of all estate agents, and upon first announcement by the EAAB tasked the Pam Golding Training Academy to ensure that each Pam Golding Properties agent had every opportunity to earn their qualification within the five-year period. All full status agents were required to achieve the NQF4 qualification via RPL (Recognition Prior Learning) or be exempt from the qualification and were given five years from July 2008 to do so. We therefore believe that it is realistic to expect existing full status agents to have re-qualified by the end of 2013 and therefore obtain their 2014 FFC.”
While people do like to procrastinate, the inefficiency and constantly changing leadership experienced by the EAAB in recent times has not helped matters. After being placed under administration and having its board dissolved last year by Human Settlements Minister Tokyo Sexwale, the EAAB has undergone a transformation and now has an entirely new board. The new board includes members from the estate agency industry; five from civil society, representing consumer interests, and five from related professions and institutions such as the legal profession, financial institutions, property owners and developers. But could the upheaval and lack of leadership during the 2012-2013 year and previous years have had a detrimental effect on the qualification process? Says Clarke: “The board has consistently fallen behind on the deadlines which it was supposed to meet and for a long time estate agents could not get the basic required training materials. Furthermore the setting up of the Professional Designation Examination and the supply of training material for this examination are also many months late.”
Given the fact that the EAAB granted an amnesty in 2011 for estate agents operating illegally, one has to wonder if this will be the case with the deadline for the FFCs, or whether the deadline will see the amount of illegal estate agents rise dramatically?
How to comply
There are various ways to comply, either by exemption due to experience or tertiary qualifications or by completion of a portfolio of evidence (POE) that supports the Recognition of Prior Learning (RPL) for either level 4 or 5. A certificate by Services Sector Education and Training Authority (SSETA) will then be issued, whereby agents are given two years from the certification date to complete their professional designation exams and, once they have completed the appropriate steps, they will be able to apply for their Fidelity Fund Certificate (FFC) renewals for 2014.
Annette Evans, manager of the Institute of Estate Agents, Western Cape, cautions: “The important thing here is that there might be many agents who will not be issued with their FFC renewals and it is in buyers’ and sellers’ best interests, when dealing with an agent, to ask whether he or she has a valid FFC. You are actually within your rights to ask for proof of an agent’s registration and whether he or she is working legally as an agent.” The repercussions of ignoring this warning could lead to a loss in both clients and fees.
Another important aspect to note is that agents will not get their FFCs if the company they work for has not been issued with its FFC (i.e. the principal must have his NQF5.) If you have any queries about FFC renewal, contact either the EAAB directly or the Institute of Estate Agents, who are running information sessions on the qualification process.
ED: This is really great in theory, but considering the massive problems that exist with training providers SSETA and the EAAB, it will be interesting to see what happens when the deadline passes.