Kerry Dimmer
MAIN IMAGE: Jan Jordaan – director of Jan L Jordaan Attorneys, Thato Ramaili – CEO of the PPRA, Berry Everitt – CEO of the Chas Everett International property group, Meyer de Waal – director of MDW Inc, Khairiyah Safeda – founder of Safeda & Associates
In a second open letter, following one posted on 22 October that was addressed to fellow conveyancers, The Legal Practice Council, The Law Society of South Africa, the PPRA, banks, and De Rebus magazine, director of Jan L Jordaan Attorneys, Jan Jordaan, has red flagged bribery in the conveyancing sector.
OPEN LETTER TO CONVEYANCERS – 29 October 2024
Good afternoon, fellow colleagues,
Bribery has, regrettably, become the norm in the conveyancing sector. This letter follows the Open Letter I recently sent to all banks, the Legal Practice Council, the De Rebus and the PPRA, urging them to address this growing problem.
I am reaching out to bring an issue to light that should be of deep concern to every member of our profession: bribery and corruption have become all too common in conveyancing.
Any attorney who engages in these practices effectively forfeits the right to criticize the corruption we see in our country’s leadership.
Bribery is corruption, plain and simple, and it has become too widespread in our beloved country.
This practice must be stopped.
Some unethical practices we are now seeing in conveyancing include, but are not limited to:
- Conveyancers paying agents up to R7,500 per instruction;
- Conveyancers offering a kickback of 20% of their fees to agents;
- Conveyancers paying significant sums of money (up to R500,000) to principals in exchange for guaranteed referrals over a period of years;
- Conveyancers covering the cost of professional property photography on the condition that agents direct the deal to them;
- Conveyancers purchasing shares in estate agencies and then pressuring agents to direct work to them;
- Conveyancers paying Town Council officials to expedite the issuance of clearance figures and certificates.
Proving these acts of bribery is undeniably challenging, as those who benefit are often complicit, with many of them embedded within the scheme itself.
Although I lack direct proof of these practices, I have no doubt that an organization with investigative authority, such as the Hawks, could readily uncover these corrupt activities.
It is time for us to take a united stand to restore the integrity of our profession and to make it once again trusted and respected.
I invite and challenge each of you to join me in addressing this issue so we can clean up our industry and re-establish the high standards we once upheld.
Let us stand together, shoulder to shoulder, to protect the honour of our profession and eliminate bribery from the conveyancing sector.
Who is with me on this?
Jan Jordaan, Director, Jan L Jordaan Attorneys.”
PPRA responds
We reached out to Thato Ramaili, CEO of the PPRA for comment:
“The practice of conveyancers bribing property practitioners to obtain conveyancing work, is partially dealt with by section 58 of the Property Practitioners Act 22/2019. This section provides:
“Limitation on relationships with other property market service providers
58. (1) A property practitioner may not—
(a) practise (sic) in association with any person which or who is prohibited by any law, any professional code of conduct, any code of ethics or protocol, report or charter on corporate governance, from doing so; or
(b) enter into any arrangement, formally or informally, whereby a consumer is obliged or encouraged to use a particular service provider including an attorney to render any service or ancillary services in respect of any transaction of which that property practitioner was the effective cause.
(2) The Minister may by regulation prohibit any relationship which could harm the interests of consumers.
(3)A person who renders any service in contravention of this section is not entitled to any remuneration, payment or consideration in respect of such services rendered, and if the consumer has paid any remuneration, payment or consideration of the relevant service provider must immediately upon request in writing by any affected person
(4) A person who, within one month of being requested to do so, fails to repay any such remuneration payment or consideration together with interest is guilty of an offence.
“It should be noted that the provision does not govern conveyancers, but the Act applies to property practitioners as defined in the Act,” says Ramaili. “As such it is clearly within the auspices of the LPC and conveyancers themselves to enforce compliance with common law and legislation that applies to their industry.
“The PPRA, as the property practitioner regulator, is active in enforcing the provision of the PPA to ensure that property practitioners do not misuse their position to influence which service providers their clients choose to make use of. In so doing, it is believed that the enforcing of section 58 will assist in curtailing the practice of conveyancers using illicit practices to secure clients, and practitioners benefitting unlawfully.
“The PPRA is, unfortunately, dependent to some degree on whistleblowing and reporting of unlawful activities known to industry participants, in order to investigate practices and act against the culprits. Only when the industry as a whole outlaws and reports this practice, and is courageous enough to expose such activities, based on factual evidence, can the PPRA act meaningfully in convicting property practitioner offenders and removing them from the industry.
“The PPRA continues to educate property practitioners and consumers on a consumer’s right to choose their own conveyancer, and the statutory prohibition on practitioners influencing this choice in any way, and to act on perpetrators wherever they are exposed,” concludes Ramaili.
Agencies
Property Professional reached out to a number of estate agencies, most of which declined to comment. Berry Everitt, CEO of the Chas Everitt International property group, however, did not. “This does not happen in our group and I’m not aware of any other real estate company where it does. However, if there are attorneys securing conveyancing business in this way, I’m sure the Legal Practice Council will deal with them.”
Conveyancers
Jan Jordaan’s letter has really touched a nerve within the conveyancing profession. Here Property Professional found a number of conveyancers eager to react. Meyer de Waal, director of MDW Inc legal firm describes how frustrating it can be to lose business because of agency referrals …
“I read through the article and although I know that such happens, I have never had an encounter of such – and luckily did not participate in any of such.
“I, however, had a situation where I assisted an elderly client of mine with the discussions regarding the sale of his property. We even had discussions with the agent who was appointed to market the property. A week later I learned that the property was sold (I usually request to review the offer to purchase before such is signed by the seller) and that the agent recommended the appointment of a conveyancer. (not our firm).
“I was obviously very upset and asked my client why, after all the time I spend was another conveyancer appointed and he explained that the estate agent recommended their preferred conveyancing attorney. I realised it was too late to try to claw the conveyancing instruction back and was very upset that my client with whom I had a 20 year working relationship followed the advice from the estate agent to appoint the preferred conveyancing attorney of the agent.
“I cannot not provide first-hand experiences of practices of cash requests etc. In our own practice, we rely on the work that existing clients refer to us and try to build up a good relationship with a client that often leads to a referral by another client or a purchaser. We do not rely on work that “outside” estate agents/property practitioners refer to us.
“I am in favour of an investigation in such direction, as it direct conflict with the rules of the LPC, said de Waal.”
Another conveyancer, Khairiyah Safeda, founder of Safeda & Associates, had this to say:
“The open letter highlights a very real and troubling issue within the South African property industry. The pressure on conveyancers to offer bribes in exchange for referrals is particularly concerning, as it undermines the professionalism and integrity of our industry. I, too, have faced situations where property practitioners have implied or outright requested kickbacks to secure a steady flow of work, which is especially challenging for small and newly established law firms that lack the financial resources of larger, more established firms.
“This practice not only places new conveyancers at a disadvantage but also creates an environment where ethical standards are eroded. It’s disheartening to see that ethical conveyancers struggle to build successful practices because of this widespread, unspoken expectation. Ultimately, change will only come if property practitioners collectively refuse to request bribes and conveyancers refuse to pay them.
“An impartial system to distribute property transfer cases equally among conveyancers could be one solution, though it raises challenges, such as the regulation and potential limitation of a seller’s choice in appointing a conveyancer. While not without hurdles, such a system would be a powerful step toward leveling the playing field and restoring integrity to both professions,” Safeda concluded.
Tracey Bussachau is a director at the legal firm Margaret Lewis Busschau Inc. This business is focused primarily on conveyancing. Bussachau comments:
“As young article clerks, we were taught about the ethics of our profession and that touting was unacceptable and would have dire consequence for our careers. We went to our “fit and proper” interviews, and took oaths when we got admitted as attorneys, notaries and conveyancers in High Court – a very proud day for us, for our family and friends. In fact, we even had the impression the judges were proud too, welcoming new minds to the honourable profession!
“Reading this letter from Jan Jordaan has brought into focus just how far some conveyancers have strayed from the very important principles we were taught fresh out of university.
“The problem of some conveyancers feeling that they need to “pay for work” to survive, needs to be tackled by the LPC and the PPRA. Property practitioners should not ask for financial incentives to direct work to a particular conveyancer, and conveyancers should not pay for it. Perhaps if no one asked, then no one would pay, and if no one paid, no one would ask.
“A property practitioner has a lot of influence when it comes to recommending a conveyancer to their seller (especially when the seller doesn’t have a preferred conveyancer) but a conveyancer should only be recommended because they are good at their job and offer a professional service, not because they are unethical and are comfortable bringing the profession into disrepute by paying an unethical property practitioner a kickback. If a conveyancer is prepared to “pay” property practitioners for referrals, what other rules or laws might that attorney be prepared to break?
“There has been an overwhelmingly positive response by conveyancers to Jan Jordaan’s letter. Honour and integrity need to be restored to both the legal profession and the property practitioner profession. Let’s all stay in our lanes. Choose not to take part in bribery schemes. Make money from one’s own efforts, not someone else’s!”
Conclusion
Obviously, this is a concerning issue. One source told us that it has lit up the airwaves in private group conversations that we cannot access, and much of what is being said may be considered’ hearsay’. There is no doubt that any investigation if there is one, will reveal the truth, but it may mean whistleblowers will need to step up.
In the meantime, as one conveyancer suggested, ethical attorneys and property practitioners could consider signing a pledge not to pay or receive such bribes. This would also assure the public that the professionals they choose for their property transactions are ethical.
