Why the sudden haste EAAB?

Why the sudden haste EAAB?

MAIN IMAGE: Mamodupi Mohlala, CEO EAAB; Bradd Bendall, managing director: real estate operations, Pam Golding Properties.

On Sunday 1 March the EAAB announced they will approach the Financial Intelligence Centre (FIC) to do an investigation of Pam Golding Properties (PGP) who may or may not have been in breach of the FIC Act.

Such was the haste that the entire South Africa was informed of this intention before any communication was sent to PGP. Any estate agent dealing with the EAAB could only be astounded at the sudden perceived efficiency.

This does beg the question: What is behind the public speedy approach in respect of something that happened about six years ago?

Further reading: Mozambique: ‘Hidden Debts’ – Definitive accusation lists bribes paid by Privinvest

“I find this strange as Rebosa repeatedly had to ask the EAAB as the responsible body to educate/inform the industry prior to the enhanced FIC Act requirements taking effect on 1 April last year, yet they only started doing so after the fact,” says Jan le Roux, CE of Rebosa. “Nobody was in a hurry back then.”

Further reading: 1 April 2019 is deadline for FIC compliance

former Mozambique president Armando Guebuza.

It is alleged that PGP may not have acted in accordance to the law when properties in Gauteng were sold about six years ago to the children of former Mozambique president Armando Guebuza. (Image: Mail&Guardian)

It was reported in the media that properties in Gauteng were sold to two children of an ex-president of Mozambique and that PGP may not have acted in accordance with the law whilst processing the transaction. It should be noted that estate agents are supposed to report suspicious incidences/consumers in confidence to FIC, not to the EAAB – hence PGP may well have – the EAAB would not know.

The action announced by the EAAB was so swift that there apparently was no time to consider that the requirements in terms of the FIC legislation changed on the 1st of April 2019 and that the transaction in question took place years before when far lesser requirements existed. Possible transgressions now mentioned did not exist at the time.

“Only an investigation, properly done, can determine if PGP was at fault and to now raise the spectre that they may have been at fault in terms of the FIC requirements, that were not applicable at the time, borders on ludicrous,” adds Le Roux.

PGP’s general manager: real estate operations, Bradd Bendall, comments on the matter were that the company takes the allegations extremely seriously and have commissioned an independent external investigation. He also said PGP will cooperate fully with the investigation of the EAAB.

Mamodupi Mohlala, CEO of the EAAB, on Sunday 1 March said in a public statement: “Enforcement and compliance are at the core of our mandate as a regulator. We therefore have to ensure that there is full compliance no matter how big or small a licensee. We demand full compliance in the interests of consumer and public protection.”

No disputing that.

Question is though why the incredible diligence in respect of a big national company and what seems to be a total neglect as far as other disciplinary issues are concerned?

It is common cause that the EAAB is anything but effective in preventing thousands of agents operating illegally. According to Le Roux, Rebosa has been informed that more than 270 disciplinary hearings since 2018 have not taken place despite the fact that the complaints have been investigated and referred. “These are not cases of “alleged” misconduct but rather of investigated misconduct where consumers were put at risk through non-compliance. There can be no excuse for this omission nor justification for the current hasty actions,” he adds.

Mohlala subsequently announced this week that there will also be a widespread investigation to determine the extent of this “practice” in the real estate industry that might even have led to artificially inflated property prices.

Judging by recent statistics from FIC the real estate industry appears to have been very diligent in reporting ‘suspicious and unusual transactions’ to the FIC. During the period 1 April 2018 to 31 March 2019 the FIC received 5 409 reports from estate agents – this includes reports on all cash transactions over R25 000, section 29 reports (which refers to transactions that arouse suspicion in terms of money-laundering or terrorist activities) as well as terrorist reports.

Comments Le Roux: “The FIC serves a necessary purpose and any estate agent acting in defiance of this Act should be investigated and punished if necessary. However, trial by media and jumping to conclusions does not serve anyone well.”

“I so wish that all that was said by the EAAB was ‘We will ensure that this matter is brought to the attention of FIC and will do our utmost to ensure that a thorough investigation takes place and that guilty parties, if any, are punished in accordance with the law’.

“Thousands of agents are reporting diligently to FIC in terms of the Act and not even one agent has been found delinquent to date (as can be determined on the FIC portal),” continues Le Roux. “The hasty approach, numerous public statements while actual cases of misconduct and non-compliance are neglected makes one wonder … it generates publicity but does not serve the industry and thousands of compliant agents well.”

Showing 18 comments
  • karen
    Reply

    If only they would deal with the issue of Fidelity Fund Certificates as quickly. We have been waiting for 6 months; been through various escalations, but the response remains the same. The Finance Dept is allocating the payment, wow!

  • Linda
    Reply

    I wish the EAAB was as efficient in advising the industry on what is happening with their IT system which has almost paralysed the industry. The current CEO appears to love the drama that surrounds this issue and instead of carrying out her mandate which is to service the agencies/agents, she likes to make headlines especially if it includes a TV appearance. I am all for compliance and following the letter of the law but I do wonder what happened to let’s investigate and then publish in the media.

  • RALPH PANDOY
    Reply

    It is totally unacceptable to proceed with an investigation via the media. The EAAB must first get its house in order before it points a finger. Where has the “AUDI ALTERAM PARTEM” rule (the right to be heard) gone?

  • Eileen Camacho
    Reply

    In my area in Pretoria East more than half the agents are not registered. When will this be addressed? I have sent several emails with regards to certain people marketing for the past 10 years that have never had a fidelity certificate.
    Nothing gets done!

    • Belinda
      Reply

      EAAB’s system of keeping record of agents payments on their system, is just as horrendous. This shows once again that their focus should be internal as well. Their incompetency is just ignored by the CEO.

    • Roy Hurrienarain
      Reply

      I understand that there are approximately 200 unregistered estate agents in Centurion also but the EAAB does nothing as they do not have the ability & know how to police / trace the unregistered agents. This is grossly unfair to the registered agents that work by the rules and pay fees etc to be registered with the board. Registered agents are held accountable but are not protected by the board from developers / sellers that fail to comply with and pay agents’ fees. There has been a lot of hype at EAAB recently. If only all that energy can be better utilized / directed on other problems thus also protecting the registered agents. Similar to what the politicians are doing at Tswane Municipality. It is all about power and position whilst service delivery is non-existent.

  • Dooley Vajeth
    Reply

    Does anyone know what happened about the EAAB enquiry on their financials.

  • Peta Bodley
    Reply

    Well said!

  • Murray
    Reply

    Big fines are good, passive income for the EAAB

  • Ngobeni
    Reply

    I have given up on this useless institution. Last year I went to register and I was told that I need to pay penalties since I paused practicing for a year. I questioned why and was told I should have de-registered. Well, I understood and arranged with my employer to pay for me and he did. They said I need to send proof via their portal which I did. I later sent numerous inquiries and was advised to log complaints and was assured they’re dealing with it. To my surprise, during renewal, I tried to login and find that, despite having paid all penalties and waiting for my fidelity fund certificate, I was charged penalties plus the money I paid wasn’t yet processed. So I don’t wonder why many people decide to open their agencies and go on with their business illegally. I also gave up on this obstacle called EAAB. Their portal is useless and their call centre is worse. I have since decided to continue with my business without this useless institution.

  • Cornelia Catherina
    Reply

    I have been an agent for 26 years. Last year I paid my registration but I was blocked. So I am not going to pay again.

  • Loren
    Reply

    People in glass houses should not throw stones…. clean your side of the street first EAAB.

  • Diedre Lagesen
    Reply

    I must agree that the EAAB should look at the splinter in their eye before looking anywhere else. They took 6 months to recognise my payment for PDF and now their events’ calendar is not up to date. When you call them you can hold on their phone before they answer for 30 to 40 minutes. Wish we agents had a union.

  • Pina
    Reply

    Amazing what big news this made. The vigour and speed that the EAAB is speeding ahead with. Wish the rest of our govt institutions would have performed as well when the Guptas and all our govt. cronies were bleeding and raping this country to death. To date no fines, no prosecutions, nobody brought to book. Why????????

  • Nico Malan
    Reply

    A useless bunch. After being a agent for 30 years, I didn’t get my FFC. Lodged complaint, no response. Kept on hold on phone for 3 hours, their lines are off. Pathetic bunch

  • Kabelo Maretele
    Reply

    I applaud EAAB, because they regulate the industry. Let’s not check only their flaws also check their positives. The advice I’m giving to the board is transparency & treat any business with utmost care (small & huge). Lastly, feed backs must be consistent.

  • Pel
    Reply

    I have renewed my FFC since December and now we are in March. They still didn’t not process anything. When I call the EAAB, they keep me holding on for an hour. How can a you have one line and try to run all the agents nationwide?

  • Loren
    Reply

    Oh I know the answer to that…. it’s because it is all guns blazing to shoot the estate agent.

    What folks need to understand is that the EAAB is NOT FOR estate agents, it’s FOR the public, so if the public bleats… EAAB jump. If the property sector bleats … well, we all know the answer to that one now, don’t we?

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