The ‘reprieve’ that is no reprieve

The ‘reprieve’ that is no reprieve

MAIN IMAGE: Jan le Roux, CE REBOSA

Jan le Roux

The Estate Agency Affairs Board (EAAB) announced on the 14th of February that 87 agents benefited from a special re-admittance practice note published in June last year. This is to accommodate agents who have not applied for renewal of their Fidelity Fund Certificates (FFC) for three years or more and allows them to pay the “debt” over 6, 12 or 16 months.

This is not a reprieve because charging these penalties is simply not in accordance with the Act or the Regulations.

The Court of Appeal defined an estate agent in Rogut vs Rogut in 1982 as follows:

‘Estate agent’ means any person who, for the acquisition of gain on his own account or in partnership, in any manner holds himself out as a person who, or directly or indirectly advertises that he, on the instructions of or on behalf of any other person- … .’

Holding a FFC does not define one as an estate agent, it only allows one to trade legally and earn commission. The reverse is also true – should you be holding a FFC but not “hold yourself out” as an estate agent (see the definition above) you are not an estate agent.

Should one therefore neglect to advise the EAAB of one’s intention to cease trading one still ceases to be an estate agent when not “holding oneself out” as one.

Should one re-apply after three years, as per the notification, one cannot be penalised as an estate agent for the period during which one did not hold oneself out to be one. In short – the EAAB over that period of absence simply had no jurisdiction over one.

The EAAB’s press release (see below) also incidentally refers to individuals who “apply for re-admittance” under the practice note. This is the absolutely correct term as it relates to an individual who wants to become an estate agent yet again but who has not been for some time.

Charging a penalty under these circumstances is neither fair nor legal.

Instead of assisting agents with this practice notice, the EAAB actually denied at least 87 people the right to trade because they could not pay an unwarranted penalty.

The current Schedule of Fees 2019/2020 is also in conflict with the regulation, specifically with regards to the registration of principals. The determined fee is R1200, yet the Schedule of Fees incorrectly states R1958. The EAAB can only charge fees in accordance with the regulations (See below).

This was raised on several occasions with the EAAB and a legal opinion in respect of both instances was communicated to the CEO of the EAAB on 2 July this year – neither an acknowledgement of receipt nor any response has been forthcoming as yet.

(The CEO and the EAAB media liaison were approached for comment on these matters but as yet have not responded or indicated if or when comments will follow. Editor.)

About the author: Jan le Roux is the chief executive of Rebosa, an independent non-profit organisation that represents the best interests of business owners and principals of small, medium and large estate agencies operating in the residential real estate sector of South Africa.

EAAB Press Release – EAAB offers reprieve for estate agents with historical debt

Media Release

14 February 2020

EAAB offers reprieve for estate agents with historical debt

JOHANNESBURG – Estate agents who failed to notify the Estate Agency Affairs Board (EAAB) that they are no longer practicing have received a welcome reprieve that will allow them re-entry in the property market space.

To date 87 estate agents have benefitted from a special re-admittance practice note issued in June last year which ultimately allows estate agents who have historical penalties to re-enter the industry after fulfilling certain requirements.

EAAB Chief Executive Ms. Mamodupi Mohlala says practice note ETD022019 was issued following huge interest from estate agents who did not comply with the Estate Agency Act regulation which stipulates that all estate agents wanting to discontinue practice should notify the board in writing.

In essence, the reprieve allows for estate agents who have not applied for renewal of their Fidelity Fund Certificates (FFC’s) for three years or more to apply for re-admittance.  Estate agents will have to pay a minimum of R1,000 for acknowledgment of historical debt in terms of outstanding FFC fees and will have to sign an undertaking to pay off the debt over either six, twelve or sixteen months. The debt incurred over a three year period amounts to R16 200 for principal agents and R8 640 for full status agents and interns.

For example, full status agents and interns who apply for re-admittance under the practice note will have to pay the R1,000 acknowledgement of debt which will be deducted from the R8 640. The remaining R7 640 can them be paid off in instalments of up to 16 months.

Once this agreement has been signed, all estate agents will have to pay their annual FFC fees before 31 October each year.

In terms of the Estate Agency Affairs Act all registered estate agents are required to be in possession of a valid FFC to be able to trade.

Ms. Mohlala urges estate agents to take up this offer to allow them to gain meaningful employment in the property sector.

To apply for re-admittance, interested estate agents can contact the EAAB call centre on 087 285 3222 or visit the EAAB offices at 63 Wierda Road East and Johan Avenue, Wierda Valley, Sandton, Johannesburg.

ENDS/…

Estate Agency Affairs Act Regulations:

  1. R. 2 26 FEBRUARY 2016

REGULATIONS IN TERMS OF THE ESTATE AGENCY AFFAIRS ACT, 112 OF 1976

ISSUING OF FIDELITY FUND AND REGISTRATION CERTIFICATES

I, Lindiwe Sisulu, Minister of Human Settlements has, after consultation with the Estate

Agency Affairs Board (“the Board”), in terms of section 33(1) of the Estate Agency

Affairs Act, 112 of 1976 (“the Act”), made the regulations contained in the schedule.

SCHEDULE

  1. In these regulations words and expressions defined or used in the Act have the meaning assigned thereto.
  2. Every estate agent, excluding an ‘estate agent’ referred to in paragraph (cA) of the

definition of ‘estate agent’ in section 1 of the Act, shall –

(a) for the calendar year 2017, and annually thereafter, pay to the Board a levy

of –

(i) R1,200.00 if he/she is a principal estate agent;1

(ii) R1,200.00 if it is a company or close corporation operating as

estate agency, which is not otherwise exempted in terms of these

regulations;

(iii) R510,00 if he/she is a non-principal estate agent;2

(iv) R364.80 if he/she is an is an intern estate agent;3

Showing 5 comments
  • Johnny
    Reply

    The EAAB’s delays in issuing FFC’s makes no sense of the process. FFC’s state that they are only valid from date of issue to year-end. Therefore any agent who has not received the new year’s FFC before 31/12 is trading “illegally” for the period from 1 January until the new FFC is issued? The delays seem to be ignored by the EAAB when pursuing complaints by the public, some of which appear to be under the guidance of estate agents who can’t handle competition.

  • Corrie du Plessis
    Reply

    Good afternoon. I was principal estate agent and left the market in 2011 without notifying the EAAB. In 2017 I wanted to register again only as a full status agent. I had to do my 6-year oudit of dormant trust account (R18000 cost from an auditor) and now have to pay R16000 penalties for that 6 years. I took me about 2 years to have this sorted out. Am I still obliged to pay such penalty?

  • Frank
    Reply

    Jan, your interpretation of the act according to a past test case makes 100% logical sense, as opposed to the ludicrous EAAB interpretation which basically states that if you are an estate agent at say 18 years of age, practice the profession for 1 year, then decide this is not for you. 30 years later, you decide to give it another go, so now you must pay the EAAB for 30 years of “outstanding” fees before you will be allowed to re-enter the profession!!! How ludicrous is this woman?
    It is time she and all the other incompetents are permanently removed from office!
    They are just running a money making scam as another way to finance their GRAVY TRAIN, which by the way, is currently being funded by the exorbitant CPD fees!

  • Magda Davel
    Reply

    My concern is that the agents who paid the CPD fees in time before the final date are now being penalized. As I understand we will not be refunded. That is the same as stealing and should be investigated as fraud

  • Ray Donnelly
    Reply

    The EAAB most certainly do nothing for estate agents to warrant the fees and these penalties are outrageous. When one of my colleagues payment was not applied to the EAAB account due to an inverted number accidentally loaded on the payment, these outrageous penalties were applied even though proof of the error was available. They were only interested in collecting the penalty monies…. but when THEY make an error it is toughies🤬

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