Rebosa says EAAB must halt ‘wasteful inspections’
MAIN IMAGE: Mamodupi Mohlala-Molaudzi, CEO of EAAB (left) and Jan le Roux, CE of Rebosa.
The Estate Agency Affairs Board (EAAB) has launched an initiative to get the permission of estate agencies for inspections by the regulator – a senseless exercise says Jan le Roux, CE of Rebosa, as this approach won’t succeed in exposing and rooting out irregularities in the industry.
Agents and agencies that continue with irregular and unlawful practices, for example operating without valid fidelity fund certificates (FFC’s), continue to be a great source of concern for the local real estate industry. Annually the EAAB receive thousands of complaints of alleged irregularities they are asked in investigate – a task that the regulator has admitted pose a huge challenge to their available resources and capacity.
Read more in ‘Dealing with illegal agents is a complex issue says EAAB’
In June the new CEO of the EAAB, Mamodupi Mohlala-Molaudzi, informed the Multi Stakeholder Group (MSG), a group of representatives from the various role players in the local estate agency industry, that the EAAB intends to carry out inspections at the business premises of MSG members to assess their compliance with the provisions of the Estate Agency Affairs Act – this applies to agencies that gave their consent towards these inspections.
Mohlala-Molaudzi explained in a subsequent letter to the MSG that this initiative was necessitated by the ruling of the Constitutional Court that effectively made it unlawful since February 2016 for the EAAB to conduct searches and seize documents at agencies suspected of irregular or illegal practices without a search warrant.
Read more about the ruling in ‘EAAB powers limited by Concourt ruling’
The ruling by the Constitutional Court was actually made in February 2014 but was suspended for 24 months to give the EAAB time to amend the legislation that dealt with searches and seizure of documentation – when this time elapsed in February 2016 no amendments had been made. This left the EAAB with no legislative power to conduct searches which naturally impaired the regulator’s effective monitoring of the estate agency industry.
Although the new Property Practitioner’s Bill is only awaiting the president’s signature to be signed into law, Mohlala-Molaudzi continued that it is important that monitoring continues to ensure compliance with the current Act from 1976, hence the initiative to get permission from estate agencies for the EAAB to inspect their compliance with the provisions of the current legislation.
But what will be point of only investigating agencies that permit inspections? asks Le Roux.
“It is rather baffling why the EAAB would pursue this as it would serve no purpose. Only estate agents with clean audits would possibly volunteer for this initiative and then only if they want to spend hours compiling all the required documentation and going through same with auditors appointed by the EAAB. All of which to prove nothing, this is equivalent to asking the public at large to report to a police station provided they are innocent of all crimes,” says Le Roux.
He says Rebosa has explained to Mohlala-Molaudzi that the industry is very much in favour of inspections, audits etc as all understand the threat posed by agents that act illegally and don’t abide by the regulations. In other words, Rebosa isn’t in opposition to the enforcement of rules and regulations.
“We urge the EAAB to rather apply its resources by addressing the thousands of individuals trading illegally and besmirching the good reputation of compliant estate agents,” Le Roux explains.
He concludes with a quote from German philosopher Friedrich Nietzsche: “The most common form of human stupidity is forgetting what we were trying to do in the first place” and adds, “The object of inspections is to enforce compliance, root out bad practices – it is not to award brownie points to the well-behaved. Going after soft targets may improve the EAAB’s statistics but it does not solve any problems.”
Property Professional asked the CEO for comment on the motivation behind the EAAB’s initiative. The response received was as follows: “The Property Practitioners Bill has been sent to the President by Parliament for his signature, once the President signs the Bill into law it will deal with all issues raised in the Constitutional Court judgement. It is our hope that voluntary inspections by MSG members will assist in ensuring that we have agents complying and expose illegal estate agents.”
EAAB ‘airs dirty laundry in public’
During this time, the EAAB’s CEO also deemed it appropriate to post an ‘open letter’ addressed to Rebosa on the regulator’s home page with reference to Rebosa’s recent stakeholder engagement sessions in Cape Town and Johannesburg respectively. This was a clear “reprimand” to Rebosa.
Property Professional attended the session in Cape Town where Le Roux expressly mentioned the progress made in improving the EAAB’s service delivery under the leadership of Mohlala-Molaudzi. Read more in Rebosa reaffirms commitment to transformation in SA’s real estate sector
From the letter it would appear that Mohlala-Molaudzi was under the impression the sessions would focus negatively on the industry’s service delivery issues with the EAAB and she expressed their ‘disappointment’ that these sessions would be held ‘without affording the EAAB an opportunity to respond to any issues that may arise’. She ends the letter saying the door of the EAAB is always open and they await Le Roux’ response.
Rebosa, in response, published both Mohlala-Molaudzi’s letter as well as Le Roux’s response to her (which the EAAB didn’t publish on their portal) on their website. Le Roux commented in the latter that Mohlala’s one-sided publication of only her letter implied that Rebosa criticises the EAAB unfairly and without giving them fair opportunity to respond. He said nothing could be further from the truth and ends his response saying that Rebosa has always gone to great lengths to build a relationship with the EAAB and they will continue to do so. He pointed out Mohlala-Molaudzi’s personal lack of response to queries raised.
Property Professional asked the CEO to explain her motivation for posting her letter to Rebosa on the EAAB portal and what she hoped to illustrate by this action. In response, the following was received: “Mr Le Roux fully understands the context of the letter as he and the CEO continue to engage each other. We will continue to engage with him through the channels that are available and wishes to make no further public statements.”
Do you have any comments on the EAAB initiative to ask for consent to conduct compliance inspections at estate agencies and whether this will contribute towards rooting out illegal agents and irregular practices in the local industry? Email your comments to firstname.lastname@example.org.