MAIN IMAGE: Thato Ramaili, Acting CEO of the PPRA
Editor
For several months, the PPRA has warned estate agents who engage in undesirable business practices that they are in contravention of section 63 and regulation 35, read with section 62 of the PPA.
Section 63(1) of the PPA states that arrangements in which an HOA, for example, receives money or another form of reward for providing an advantage to one agent over the other or excluding another agent is an undesirable business practice.
While several agents had been reported, the PPRA’s Investigation and Enforcement department seemed to be dragging its heels in conducting actual investigations, leading many to suppose that the threat was empty.
That’s changing as the first volley of inspections has been conducted at estate agencies marketing properties at Mooikloof Ridge Estate in Pretoria, with several agents receiving compliance notices and R5,000 fines.
“This undesirable practice is not only anti-competitive but un-transformative, which is misaligned with the objectives and aims of our legislative mandate. We urge agents to stop participating in these practices; for those who don’t, we will expand the scope of these investigations in the new year”, shares PPRA Acting CEO Thato Ramaili.
What can the PPRA do?
Set out in the notice; the Authority states that failure to cease these undesirable business practices constitutes a breach of the code of conduct applicable to property practitioners, which failure in turn shall constitute sanctionable conduct as contemplated under section 62(1)(e).
Impose a fine
The PPRA Adjudicators have powers bestowed on them in terms of section 30(7) of the Act to impose a fine or any order under the circumstances. The penalty in this case is R5,000 payable to the Authority.
Revoke your FFC
Further note that the PPRA has, in terms of section 62(3) of the Act, the authority to withdraw your Fidelity Fund Certificate, impose a fine as determined by section 29(1)(a) of the Magistrate’s Court Act, 32 of 1944 and a reprimand after following a due process as outlined in sections 3 and 5 of the Promotion of Administrative Justice Act, 3 of 2000.
Name and shame
The PPRA is required by section 62(3)(c) of the Act to publish your name and your transgressions on its website if you are found guilty of the sanctionable conduct as prescribed by section 62 of the Act.
‘While a R5,000 fine might not seem much to certain agents, and they may not care whether their transgression is published on the PPRA website, what should be of serious concern is the fact that the PPRA Adjudicators may well withdraw an agent’s FFC,” says Jan le Roux, CE of Rebosa.
Prosecute HOAs
In instances where HOAs act as property practitioners they also have to register as such and could also be prosecuted for participation in undesirable practices in terms of the regulations.
Mooikloof Ridge (MRK) response
The Property Professional reached out to the Estate regarding their fee structure, which is still payable by property practitioners.
Theo van Rensen, the Estate manager, shared that the fee levied “is not exorbitant and is not used to ‘make money’ for the Estate; it is charged to pay for agents’ clients, marketing, agent evenings and agent open days, etc.”, and that “MKR is in line with the competitions act and does not give one agency advantage above the rest, or disadvantage for that matter”.
“The fact remains that charging any fee unfairly disadvantages one agent over another, which means that agents who pay it are in contravention of the Act”, says le Roux, “I have often wondered why all the ‘justifications’ for accreditation fees (or whatever it might be called to confuse the issue) seem not to apply to sectional title developments in which the legalities, security issues etc. are easily as complex as that of security estates.”
Read more about the ongoing HOA issue in previous articles: Why are agents still paying HOA fees? and Rebosa opposes HOA fees for agents under any guise.
