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HOAs get creative enforcing agent fees

Getting fined and possibly losing your FFC – blame HOAs

MAIN IMAGE: Thato Ramaili, PPRA acting CEO

Editor

Towards the latter half of 2023, several estate agents paying fees to HOAs (Homeowners’ associations) to operate within a specific estate/housing association were investigated and fined by the PPRA.

We’ve covered this story in a series of articles:

Here is a quick recap:

As per the Property Practitioners Act 22 of 2019, agents are not allowed to pay HOAs (Homeowner’s Associations) accreditation fees, the payment of which effectively excludes or disadvantages property practitioners not party to these arrangements from being able to provide services concerning properties in such property developments.

The PPRA began investigating agents suspected of paying HOA fees and enforcing fines of R5,000. Agents who persist in paying these fees also stand to lose their FFCs. 

Now to the update:

To date, the PPRA has fined over 150 agents with the R5,000 prescribed fine (which ironically is what many HOAs charge agents as their marketing/operating fee). The PPRA has also issued letters to offending HOAs and remains committed to eradicating these undesirable business practices. You can read the PPRA letter to HOAs here.

How are HOAs reacting?

Last year, we reported that Mooikloof Ridge Estate in Pretoria claimed that their fee “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”.

In the case of Centurion Golf Estate, the agent received an invoice of R2,800.00, payable in order to receive the seller’s levy cancellation certificate. Ebotse Golf & Country Estate in Benoni told an agent to pay the annual registration fee of R6,150.00 or an R5,000.00 once-off fee for the sale in question before issuing a clearance certificate.

It has now come to light that Zimbali Estate in Kwa-Zulu Natal is charging agents a R6,000.00 fee to write an estate ‘exam’ before being given access to sell properties in the estate.

Jan le Roux, CE of Rebosa, explains that these attempts to charge fees under any guise entice estate agents to break the law. “Whether an HOA (or indeed their legal team) disagrees with the PPRA’s interpretation of the Act, or whether or not paying their specific fees places agents at odds with the Act, is irrelevant.

The fact of the matter is that the PPRA, as the industry regulator, has taken a position and is acting against estate agents participating in schemes like that of Zimbali.  Any offers to discuss alternatives and adjustments to make it work for everyone are discussions that can only be had with the PPRA. In the interim, agents are not allowed to pay these fees”.

Le Roux goes on to say that Rebosa supports the PPRA stance in this matter as the payment of these fees amounts to undesirable business practices, which are counter-transformation and access for all.

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