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EAAB must issue FFCs immediately

Final ruling in short:

  • The EAAB must issue all outstanding FFCs of the estate agents and agencies listed in Rebosa’s court order application without further delay
  • If there are proper grounds to decline the certificate, the applicant must be informed of the reasons why it is declined
  • The EAAB must submit a report within 30 days of the judgement detailing the processing of FFC applications for 2021

A win for estate agents

The Estate Agency Affairs Board (EAAB) has been ordered to issue without delay all outstanding fidelity fund certificates (FFCs) to the applicants listed in the urgent court order brought by Rebosa. In her final judgement Gauteng High Court Judge Fayeeza Kathree-Setiloane found that the EAAB had failed to present reliable evidence why the entity has not yet issued FFCs to the affected estate agents and agencies.

Judgement was expected last week after the hearing on 5 March, but the EAAB’s desperate attempts at late submission of supplementary affidavits resulted in the delay with final judgement only presented on 15 March.

In fact, the conduct of the entity during the litigation procedures was such that Judge Kathree-Setiloane in her judgement mentioned it as “further evidence of the disarray in the EAAB and the concerns raised by Rebosa”.

Judgement welcome

Judge Kathree-Setiloane ruled that all applicants who had not already been issued with an FFC are therefore entitled to be issued with one without further delay. If the EAAB determines to decline any of these applications, they need to inform the applicant within five days of making the determination.

In 30 days from the ruling, the EAAB must submit a report to the court, with Rebosa copied in, that includes details on the following: how many FFC applications were received by 31 October 2020; how many of these applications were approved or declined and how many FFCs were issued. The EAAB also must indicate the number of unresolved applications and the total funds currently held in its suspense account.

The ruling in favour of Rebosa and its co-applicants with EAAB to be held responsible for the legal costs incurred. Judge Kathree-Setiloane agreed to a punitive cost order against the EAAB. “I am of the view that the EAAB’s sustained breach of its statutory duties and its failure to acknowledge any wrong is a sufficient basis to justify an order of costs on the scale as between attorney and client,” she said.

Commenting on the ruling, Rebosa CEO Jan le Roux said they welcome the opportunity to work with the regulator on a closer, more meaningful basis in order to rectify the systemic problems plaguing the EAAB.

Rebosa chairman Tony Clarke said he believes that the regulator has a huge role to play in ensuring the professionalism required to operate in the real estate industry, but it cannot do so until it has attended to the issues highlighted in the courts’ judgement. “Rebosa looks forward to these changes being brought about expeditiously so that we can all focus on other pressing issues inter alia the implementation of the new Property Practitioners Act and its regulations and transformation,” he concluded.

The EAAB issued the following statement on 22 March 2021:

The EAAB notes the judgement from the High Court regarding the court application by Rebosa to compel the EAAB to issue outstanding Fidelity Fund Certificates (FFCs). The EAAB legal team is studying the judgement and will determine the next course of action.
Rebosa indicated that some 832 FFCs were outstanding in relation to the more than 35000 that the EAAB had already successfully issued.
The EAAB notes that of the 832 FFCs cited by Rebosa, 629 have been issued; 166 have been found to be duplications and the balance of 37 will be finalised as soon as the EAAB receives outstanding documentation requested from the estate agents.
We note the importance of FFCs for persons’ livelihoods and therefore all compliant FFC applicants deserve to hold their FFCs. We remain committed to ensuring that every legitimate FFC applicant can get his or her certificate in time and is able to operate. Among the reasons
for outstanding FFC applications were incomplete documentation and duplicate applications. Most of the affected applicants were communicated to at various intervals in late 2020 and informed of the delays.
The EAAB remains committed to its efforts to continue its working relationship with Rebosa that includes weekly stakeholder meetings where such issues can be tabled and resolved.

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