Illegal estate agents are a massive issue, but Rebosa has more confidence in the proposed new legislation to address this than in legally trying to force the Estate Agency Affairs Board (EAAB) into action.
Andile Ben-Mazwi, owner of RE/MAX ABM Properties wrote an open letter to the industry body Rebosa where Ben-Mazwi suggested estate agencies rally round to taking legal action against the EAAB and the police to force them to take more decisive action against estate agents trading without licence.
“The author makes very valid points. It has long been an irritation of the industry that not enough is done in acting against agents/individuals trading illegally,” Jan le Roux, CEO of Rebosa began his comment on Ben-Mazwi’s letter.
Ben-Mazwi argued in his letter that by failing/neglecting/refusing to enforce the law estate agents like himself, the EAAB and the police are all responsible for the “continuation of this indefensible and unpardonable state of affairs“. He had obtained legal advice on actions the property industry as a collective could take to force the police and the Board to investigate complaints and take further appropriate action against those who practice illegally. One of the actions he proposed is Mandamus Action, which is an application to the High Court (Civil Action) compelling a legal authority (police) and/or a Regulatory Authority (Board) to perform their statutory duties of laying criminal charges and instituting criminal prosecutions against those who trade outside the law.
“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.”We would be much more effective in shutting down illegal operators who are putting consumers at such risk. Currently the EAAB spends around R100m a year for precious little result. We reckon the industry could regulate itself with less than half of that – and that the rest could then be spent on transformation and its target,” he concluded.
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.
Le Roux added that Rebosa was presented with facts in this regard by the EAAB on Friday during the Multi-Stakeholder Group Meeting and added it will be published on the Rebosa portal soon.
He 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.
Ben-Mazwi’s frustration is shared by other leaders in the real estate industry.
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.
He suggested that the EAAB be shut down and estate agencies be allowed, within guidelines, to manage the future of their own industry.
Ted Frazer, Seeff National Marketing Manager, said unfortunately, it does seem that there are still estate agents operating without the necessary qualifications and a valid FFC (Fidelity Fund Certificate). He 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.
“Credible property brands have put the necessary systems in place to ensure compliance. Any agent that trades without a valid FFC is not only trading illegally, but also sets a negative precedent for the industry at large. These rogue traders should be eradicated from the industry to ensure that we are seen as an industry of high professional standards,” he said.
Despite numerous emails and calls to the EAAB Property Professional received no comment from them on steps taken or challenges experienced in dealing with complaints about agents trading without proper licences. In November the EAAB admitted in a statement that the Board receives “frequent complaints from consumers complaining about people purporting to be agents and where possible intervenes”.
According to this statement there are no available statistics regarding the number of estate agents practicing illegally in South Africa.
In November the Board introduced the EAAB PrivySeals as a mechanism to help the public distinguish between legally registered and unregistered property practitioners. The seals must be displayed by all registered estate agents in their e-mail signature‚ their online and social media profiles‚ alongside property listings and in all marketing material.
A concept supported by Rebosa, but Le Roux at the time said to Property Professional it was unfortunate that this was the only measure put forward by the Board as a solution for a massive problem without addressing the real issues.
“Campbell (Margie Campbell, EAAB spokesperson) remains quiet about what the EAAB is doing about the thousands of illegal operators despite many of them being reported to the EAAB on a regular basis. Through PrivySeal the onus is placed on the consumer to be aware – which is good – but the EAAB cannot escape its responsibility as the regulator to take steps against illegal operators and prosecute same. That is what regulators are for,” Le Roux said.
Find the full letter by Andile Ben-Mazwi on Property Professional’s website.
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