Do governing bodies add value to the property industry?
Key property industry governing bodies
As a member of the property industry, you will have come across many governing bodies and regulatory bodies that are meant to enrich and better the industry they serve, but do they really? One only has to look at the embattled Estate Agency Affairs Board to see that not all governing and regulatory bodies are well run and serve the industry they are meant to effectively. So, who are the key players and what do they do for the property industry?
The four main players in the property industry are the Estate Agency Affairs Board (EAAB), the Institute of Estate Agents of South Africa (IEASA), the Real Estate Business Owners of South Africa (REBOSA) and the Rental Housing Tribunal (RHT). Firstly, what does the EAAB do? It was established in 1976 in terms of the Estate Agency Affairs Act 112 of 1976 (the Act), with the mandate to regulate and control certain activities of estate agents in the public interest. The EAAB is tasked with ensuring that all estate agents are trained and are registered with the EAAB through a Fidelity Fund Certificate, which has to be renewed annually and is confirmation that the person to whom the certificate is issued is legally entitled to carry out the activities of an estate agent.
Bill Rawson, chairman of the Rawson Property Group, says: “The Estate Agency Affairs Board has traditionally established the rulings and code of ethics under which estate agents operate and which in recent years has made a high level of educational qualifications mandatory for any estate agent – a move that has been widely applauded. Any estate agent failing to obtain these qualification levels at the end of his or her first year of internship cannot apply to be registered with the EAAB and will, therefore, not be issued with a Fidelity Fund Certificate, which means that he or she cannot operate legally as an estate agent. The second deregistration of agents who have misbehaved in some way or other has also helped keep many in line when they may have been tempted to break certain rules.”
Estate Agency Affairs Board
The EAAB was originally under the control of the Minister of Trade and Industry (since 1976), but on 17 May 2012 it was transferred to the Department of Human Settlements. The move to transfer the EAAB was lauded by many estate agents due to its critical role in maintaining a stable, strong and effective property industry. The EAAB suffered under the department of Trade and Industry and was notable for poor leadership and an inefficient leadership structure, which led to a total lack of confidence in this regulatory board. When it was taken over and a new board of directors appointed, the real estate industry was hopeful of real and meaningful change in the industry. The board is currently led by chief executive officer Bryan Chaplog and membership is not negotiable — this board is the main regulatory body for the property industry and estate agents must belong to it. The EAAB is tasked with being the industry regulator, to look after the interests of the industry and drive transformation. Despite some bumpy starts with regards to the Fidelity Fund Certificate deadlines and issues of non-compliance with audits resulting in some estate agencies not having Fidelity Fund Certificates and needing to apply for a special application before the EAAB board, the EAAB has made some solid steps with regards to transformation.
In May this year, the EAAB began with its own continuing professional development (CPD) Training Workshops around the country. The EAAB is also in the process of acquiring suitable providers for CPD software to assist with the programming of workshop training and to improve the programme initiatives. They are also planning regional EAAB offices in specific provinces to enhance effectiveness and efficiency. With regard to transformation, there have been some tentative steps taken by the EAAB, and while not all of them have been met with approval from estate agents in South Africa, the EAAB has launched a transformation policy called the ‘One Learner – One Estate Agency’ programme, which will be administered by the EAAB. Through the programme, the EAAB and its partners are planning to recruit 10 000 new entrants to the sector over a period of three years, commencing April 2014 and ending on 31 March 2017.
This means over 3 300 new entrants will be recruited to the sector every year. While the transformation is laudable it has also had some backlash from agents who see it as harmful to saturate the property industry with so many new estate agents, especially given the tough conditions and realities of the job. Jeanne van Jaarsveldt, president of the Institute of Estate Agents South Africa, believes there is room for improvement in the running and government of the EAAB: The issuing of Fidelity Fund Certificates in 2014 has been ripe with huge frustrations and confusion. This seems to be a recurring problem that the EAAB can’t get on top of.”
Rental Housing Tribunal
The Rental Housing Tribunal is a body that has court powers to rule in favour of a landlord or tenant and even to impose penalties. Its main function is to_settle disputes between tenants and landlords. Formed in 2001, the tribunal comprises five members (including a chair and vice chairperson) appointed by the Provincial Minister of Human Settlements, each of whom have expertise in property management, housing development and consumer matters pertaining to rental housing.
The Rental Housing Tribunal seeks to:
- Harmonise relationships between landlords and tenants in the rental housing sector.
- Resolve disputes that arise due to unfair practices.
- Inform landlords and tenants about their rights and obligations in terms of the Rental Housing Act.
- Make recommendations to relevant stakeholders.
While this tribunal is not one that estate agents can become members of, it is nonetheless an important regulatory body in the property industry and one that informs landlord-tenant relations.
Institute of Estate Agents South Africa
The Institute of Estate Agents South Africa has been part of the property industry landscape for 75 years. It is a labour organisation and provides two distinct services to its members, the first being to provide principals and agents through the regional structures with training sessions by top speakers; and the second and equally important set of services include engaging with the various Industry stakeholders, guiding and steering the organisation and its members through legislative requirements and engaging positively with other industry stakeholders like the major lending institutions, the EAAB, the Services Sector Education and Training Authority (SSETA) and various government sectors.
IEASA president Jeanne Van Jaarsveldt answered some questions on what the institute does for the industry:
Do any of the governing and affiliate bodies in property affect good change in the industry?
Van Jaarsveldt: IEASA and REBOSA look after the labour (agents) and businesses (principals) section of the industry, who in turn are very involved in industry bodies and lobby groups in South Africa.
How important is it to belong to and be a part of these structures?
Van Jaarsveldt: IEASA has a rich history of over 75 years of service to the real estate industry. We offer our members a vast number of supportive services like training, events and awards. In March we conducted 39 events around South Africa and will continue to be relevant to the agents around the country via our six regional offices.
Which bodies are you a part of and why?
Van Jaarsveldt: First and foremost, IEASA is the longest standing affiliate of the National Association of Realtors (USA) outside North America. This enables IEASA to form part of various international groups and offer these products and services directly our members. Closer to home, IEASA is involved in various industry bodies, and forms part of the directorship of the EAAB, as well as the Property Sector Transformation Charter, to name but a few.
Do these bodies communicate and work with one another or are they separate?
Van Jaarsveldt: IEASA has been working with REBOSA for over three years to try to establish a sound working relationship between the two parties. Early in 2014 REBOSA got their organisation off the ground and this is the ideal platform on which IEASA and REBOSA can work toward common industry matters that will affect the industry as a whole.
What would you say to someone starting out in the property industry in terms of which bodies and governing institutions to know about and be active in?
Van Jaarsveldt: It is important to be active in these institutions. It forms a sound ground for the new recruit to form part of the bigger picture of the industry and a sense of belonging enables the new entrant to the market to feel that they can rely on support and positive input into their career or business. Lastly, new entrants into the marketplace are, in all probability, not aware of the legislative requirements and the continual changing landscape we as an industry are finding ourselves in – it gives assurance that the overarching body looks out for him/her and will effectively communicate to the new member on a regular basis. IEASA uses the various social media platforms effectively to ensure that we communicate to the real estate sector as a whole and this has enabled us to get information out in a quick and consistent manner.
Real Estate Business Owners SA
Real Estate Business Owners South Africais an independent, non-profit organisation launched in March 2012. It represents the interests of small, medium and large South African business owners, principals and employers in the real estate sector. The key focus of the organisation, as stated on the homepage of the REBOSA website, is to ‘unite, transform, uplift, empower and develop the real estate profession across all areas of the market, achieving an environment for business to thrive in and expand while contributing to a vibrant economy’. Membership is voluntary and the fee is relatively small to join this organisation. One of the positive aspects of REBOSA is their communication with other property industry governing bodies — they work together with IEASA towards common industry matters.
Dr Andrew Golding, chief executive of Pam Golding Properties, is a member of REBOSA and answered a few on the organisation:
In your opinion are these industry organisations well run and governed?
Dr Golding: I can only speak for REBOSA; it complies with the high standards of governance and compliance.
Do any of the governing and affiliate bodies in property affect good change in the industry?
Dr Golding: By representing a large constituency and specific interest group, bodies like REBOSA are able to act in unison and lobby for changes that they believe are in the best interests of their organisation.
How important is belonging and being a part of these structures to your business?
Dr Golding: In order to make meaningful stakeholder representation to government and quasigovernment organisations, it is particularly important to be able to lobby effectively and this can only be done with a representative voice.
Real estate agents speak up
Jan le Roux, director of Leapfrog Property Group, also believes it is vitally important to belong to governing and regulatory bodies: “If ever there was a time when affiliation to a representative governing body in the industry was important, it is now. A vast number of bills that will affect real estate are in the pipeline, and quite a few of the laws over the past few years were enacted without the real estate industry having had any real impact thereon. The Consumer Protection Act, the Protection of Personal Information Act and such like come to mind.”
Should an estate agent be affiliated with a governing body?
Dr Golding: I think the answer is an unequivocal yes. It is impossible, time and impact wise, for an individual agent to interact with government on bills like the Property Practitioners Bill. Change can only be effected by a concerted joint effort – well researched, motivated and presented – something a well organised governing body can do. REBOSA serves exactly this purpose and will ensure that the Property Practitioners Bill is studied properly and responded to.
Any estate agent, new or experienced, can benefit from organisations and bodies that are, at the end of the day, attempting to better the property industry. By belonging to these organisations you can gain valuable information and actually affect change in the property industry; only by real conversation and working together with governing bodies can property professionals and government work together to create legislation and codes and practices that benefit not just agents but consumers. The bridge between the agent and the legislation procedure is property industry governing bodies like the EAAB, IEASA and REBOSA. So, when it comes to a question of should you or shouldn’t you join, the answer will always be join and become an active member, research the right organisations for your business and make sure you are an active member of the organisation that will help you.
Words: Angelique Redmond