EAAB annual report under scrutiny

EAAB annual report under scrutiny

Yusuf Patel, Deputy Chairperson of the EAAB, compiled the Chairperson’s Report in the 2020/2021 Annual Report.

In his report he levelled some serious allegations against the industry at large without presenting any supporting information.

Some very surprising and disturbing excerpts include:

  • “It is important to place on record that the entity has received regular constructive feedback for which it is grateful.
  • “However, there is also an observable trend of antagonism that has three pillars.
  • “First, is an anti-transformation agenda that has sought to challenge decisions of the Board aimed at providing access to the sector for black practitioners. Whilst vocalized by the obvious conservative politicised lobby groups, the ultimate sponsors of this agenda remain hidden from the public for obvious reasons.
  • “The second trend is based on a contestation of the mandate of the entity. This is driven by the wish of certain interest groups to have the regulator de-linked from the mandate of also being a professional oversight body. Indeed, there are examples elsewhere in the world, of regulatory regimes that place this mandate potentially in private hands. That is however not the case in South Africa. It appears, however, that having failed to win their preferred outcome during the parliamentary public process, which gave rise to the new Act, the strategy has evolved to that of waging hostilities with the intention of undermining the regulator. In this regard, the EAAB has received specific complaints from certain industry practitioners for it to investigate these disruptive practices.
  • “Lastly, and related to the above, is a trend towards co-regulation if not self-regulation. Having observed these audacious activities and the underlying motives for a while, it appears that some of them appear to fall within the regulatory scope of at least two regulatory bodies whose task it is to monitor undesired business practices and are accordingly referred.”

Jan Le Roux, Rebosa CE, says: “These are rather shocking assertions which is obviously aimed at the industry without advancing any facts whatsoever. It is quite frankly undeserved and destructive and Patel should in the interest of transparency give substance to the allegations by explaining the statements.

“I have not come any across any anti-transformation agenda nor of anyone even hinting at undermining the regulator. Patel should really explain why he did not raise these ‘issues’ with industry bodies at the time when he had many opportunities to do so but chose instead to communicate his grievances and gripes  in the Annual Report – the purpose of which is unclear” says Le Roux.

Le Roux continues: “Vis-à-vis the Report – one wonders, why did Patel not comment on the fact that the EAAB since late last year had no Executive Manager: Information Technology despite this being an important portfolio considering the defunct IT system and its bearing on issuing FFCs ?

“Interestingly, Mathibela Selepe still features as such in the report despite his resignation and departure last year. Also, after the sad demise of Karen Son the EAAB does not even have an Acting Chief Financial Officer, one of the most crucial portfolios in any organisation. Reporting this would have been factual.

“Is Patel perhaps deflecting the attention from the failures of the EAAB, especially it’s lack of anything significant as far as effective transformation goes? Please note that the EAAB reported revenue of R 147 million iro the last year.”

Mr Patel was asked to elaborate and undertook to do so but never sent any comment in time for publication.

Showing 4 comments
  • charles haigh
    Reply

    Such a typical stance by the EAAB, you cannot get a straight answer, everything is shrouded in “cloak n dagger” stuff or you never get a repose at all. Just spit it out and call a spade a spade, for that amount of revenue declared there is very little to show in terms of efficiencies, upgrades to systems and or infrastructure, industry is right to challenge that mandate let alone having 2 hats of regulator and professional body, its like frying an egg in water and wondering why it resulted in poached eggs.

  • Marcel Baar
    Reply

    One of the main reasons for very poor transformation in the Property Industry must be due to the enormous amount of red tape and inefficiencies created by the EAAB. No wonder that there is such a large drop-out rate of young candidate agents.
    What happened about the court order given to the EAAB to get its house in order and report back within 30 days. Am I the only one who has missed some feedback in this regard?? Did the report maybe get lost in the mist of all the defogging and constant closures at EAAB?

  • James Otter
    Reply

    Whilst Yusuf Patel makes observations that are vague, one might try to understand and address them.

    The first transformation was the implementation of the Estate Agents Act in 1983 which brought regulation and a competency test to the business. Before then it was a job of last resort. After democracy in 1994 and 1995 in an attempt to recruit non-white estate agents the examination was made easier and became a voluntary issue. This did not bring forth black estate agents, it antagonised those who has passed the examination. It again became a job of last resort.

    In 2008 the SAQA qualifications were introduced with RPL and PDE. This created a significant hurdle for remaining in the business and entering the business. The initiative for this came from the EAB and there was an exodus of estate agents. At the same time there was a drive to bring black entrants to what had become a profession. Many blacks enrolled and did the qualification ,but they found it difficult to find employment because the remuneration was commission-based on transfer of property which impacts cashflow unfavourably. The EAAB has tried to promote transformation without much success and the firms are reluctant to change the remuneration basis. So transformation still remains a problem.

    I suggest that the problem is geographical. There has been no mass exodus of blacks to what were the white areas after apartheid. Whilst the former white areas form an organised property market in terms of registration and bond finance, etc, the black property market which is much bigger is still dysfunctional and redlined. Estate agents tend to sell property in the areas where they reside. Therefore until the residential areas become more racially integrated and the black areas become functional there will be a transformation problem.

    Yusuf’s second trend is “the contravention of the mandate of the EAAB” and a desire of some of the stakeholders for the profession to become self-regulatory. He complains that this is disruptive and undermines the Board. The EAAB has created this problem through its inefficiency and weak leadership. Apart from its first white male CEO and the black female CEO that it unlawfully dismissed, it has been leaderless and corruption has been rife. It deviated from its mandate which is enforcement and regulation. To achieve that requires integrity and efficiency.

  • James Otter
    Reply

    Continuation.
    Yusuf’s final trend is what he refers to as “co-regulation if not self-regulation”. He complains, on the one hand, of antagonism towards the EAAB and, on the other, alienates those elements within the industry that are supportive.

    Jan Le Roux asks Yusuf, justifiably, to give some transparency to the allegations. Rebosa represents one of the most influential stakeholders in the industry. A level of co-operation between Rebosa and the EAAB could resolve a lot of issues. Rebosa has access to expertise that the Board doesn’t have and needs. Some alliance between Rebosa and the EAAB would be good for business and efficient regulation.

    The EAAB fails to recognise the stakeholder concept. It has many stakeholders with conflicting agendas. Its success or failure depends on how it manages this mixture. Whilst it requires diplomacy, it also requires, in some cases, a firm stance. One cannot do that from a position of inefficiency.

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