EAAB’s exemptions for PDI’s takes flack

EAAB’s exemptions for PDI’s takes flack

Twenty-five years since becoming a democracy, SA’s residential property industry is still largely untransformed. Fact. Identifying and addressing the issue, now that is no simple matter … and it appears the Estate Agency Affairs Board (EAAB) has just stirred a hornet’s nest with their latest transformation initiative.

The property sector’s regulator recently announced that, to assist with the critical need for transformation of the property sector, they will make use of the Section 27 Proviso in the Estate Agency Affairs Act “through administrative processes to remove barriers to compliance for PDI agents where it is in the interest of justice”. In short, only agents from previously disadvantaged groups (PDI’s) will be considered for certain exemptions when applying for their fidelity fund certificates (FFC).

Read more about the EAAB’s plan to assist transformation here

The racial polarity in the property sector could clearly be seen in the reaction from agents to the news on social media platforms with white agents mostly objecting and protesting while positive reaction was mostly from black agents only.

Criticism included that the plan was racist, unconstitutional, unfair both to white and black agents and would lead to a lowering of professional standards. For example, one said while she is “100% in agreement” that PDI’s should be exempted from the costs involved in becoming an agent, she believes “something that should never be entertained is doing away with or lowering the standards of education”.

The risk to maintaining professional standards in the profession was of concern to many others – some saying it would be equal to lowering educational standards in the legal or medical profession. Many argued that the EAAB’s new arrangement would eventually be detrimental towards the professional standing of PDI agents as clients could perceive them as being lesser qualified than their white counterparts.

There were also some white agents that said they don’t see the need why the EAAB should make exemptions for PDI agents at all as 25 years had been long enough to rectify the injustices endured by previously disadvantaged groups under Apartheid.

In his comment to Property Professional, Jan le Roux, CE of industry body Rebosa, said the EAAB made many errors in their approach which makes one understand the unhappiness of many estate agents, but he was equally critical towards the agents that displayed a lack of understanding for the need for transformation in the property sector.

“Rationally no one can argue that there is not a dire need for transformation in the industry. Appropriate, sensible initiatives will have support,” Le Roux said and then gave a detailed explanation where the EAAB had erred in their approach and announcement of the “exemptions” granted only to PDI’s with FFC’s.

In summary, Le Roux said the EAAB should have said the exemptions would only be valid for a limited time period – otherwise it would imply that black agents would be treated differently indefinitely. He hoped that would soon be rectified.

Secondly, he said the EAAB had erred in excluding white agents where as Section 27 makes provision for any agent to be issued with an FFC, despite not meeting the requirements, if it be found to be “in the interest of justice”.

“This approach is wrong, unconstitutional and unnecessary,” said Le Roux, “The EAAB erred grotesquely in their approach and announcement.”

But there were “wrongs” also in the response from the real estate industry. Said le Roux: “Almost exclusively the positive responses on this initiative came from black individuals. Most white agents criticised without any positive suggestions to effect transformation despite the inequalities in the industry.” He said

“In fact, some clearly don’t even support transformation and some seem not to have learned any lessons from the Penny Sparrow/Vicky Momberg disasters,” he said adding it would have been more productive if alternative proposals to achieve transformation were forthcoming.

Read Le Roux’s full response, “Many, many wrongs and hardly a right in sight” here

Christo Weilbach is the president of industry body The Institute of Estate Agents of South Africa (IEASA) and he is an EAAB board member. Commenting on behalf of IEASA he said they are well aware of the need for transformation in the real estate profession. As such IEASA supports programs that will encourage transformation.

Continues Weilbach, “Having said that, the need to retain the integrity of the profession while doing so, remains a top priority”.

According to him the board of the EAAB had not passed a resolution doing away with real estate qualifications or requirements for PDI’s. “The EAAB is tasked with investigating ways of addressing barriers to entry for PDI’s. One such barrier is the cost of education. The education in itself is not a barrier and will not be done away with. As such, PDI’s will be able to apply for temporary exemption under Section 27 of the Estate Agency Affairs Board Act in order to accommodate time to find finances. It will not be applicable to new entrants with no previous real estate experience. It is important to note that PDI’s would need to apply and that no blanket exemption will be in place. Educational compliance will still ultimately be achieved,” Weilbach explained.

“As for the exemption of Audits, again there are certain requirements that must be met in order to qualify, after applying under section 27. The financials and bank statements would still need to be supplied to the EAAB and the EAAB will then do an audit. Again, the cost implication is what is considered, and not doing away with regulations,” he concluded.

What in your opinion are the real ‘barriers’ to access into the real estate industry for PDI’s and what would you suggest be done to make it easier for them to enter the industry? Email your comments to editor@propertyprofessional.co.za. Do take note that publication of letters remains at the discretion of the editor – avoid any form of hate speech as that will not be tolerated.

 

Pic credit: Photo by Lukas from Pexels

Showing 5 comments
  • Derek Fox
    Reply

    I would like to understand the transformation issue a little better, estate agents essentially work for themselves, whether in an agency or not. You get paid commission when you make a sale. Once you have completed your qualification, you can open your own agency, become a principal and now employ your own agents. You can buy a franchise if you would like to be part of a bigger group or stay independent
    I can say from experience that there as a time when black buyers would not use black agents because they did not trust, again my experience, this has moved on, black buyers now prefer listing with black agents as they feel more comfortable, especially conversing in there own language, particularly if they dont have a good command of say English or Afrikaans.
    The EAAB needs to look at the entire system for everyone, not just PDI’s and put a new model in place. We have for years been asking for the Trust Accounts to be taken away, our pleas falling on deaf ears. The EAAB as a regulator are antiquated and it is very cumbersome dealing with them.
    Bring back Brian Chaplog, he took over and the situation improved, he left and it fell apart again. Lowering the qualification for the PDI’s is not going to achieve the goals those pushing transformation seek.

  • Cindy
    Reply

    I think to see real transformation and in maintaining high standards in the property industry, it should be mandatory that every full status agent employs a BEE intern as an assistant for the two year internship period either on a commission incentive or on a basic salary. Just an idea but one that might be worth considering. Many PDI’s will not have the finances available to get their foot in the door without some form of income. In my view education begins at the bottom of the ladder and not at the top.

  • Cindy
    Reply

    I also don’t think FFC’s should be issued until the internship period is complete. Too many Principal agents employ interns to benefit from their sales and networking leads resulting in profit without really being concerned about educating their employers.

  • Cindy
    Reply

    Oops…educating their employees, not employers!!

  • Victor
    Reply

    All this Racism and colour classification we have to put up with is Disgusting! This government is dividing people more and more and it will never end until we say No to All racist policies and favouritism. Agents take a stand and demand an end to all quota and race classes being forced on you.

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