Welcome to Property Professional’s speakers corner. Every week we get asked pertinent questions that pertain to the real estate industry and therefor is relevant to any real estate practitioner across all services. This is the place where we bring all these questions and answers together and make it available to our valued subscribers.
In letters this week the EAAB and the commission-based structure of the property industry were also identified as barriers to transformation. There were more suggestions that bursaries and other solutions be considered to lower the cost barrier to fulfilling the educational requirements. Read more here.
Hi Jan I can hear the frustration. The EAAB is not run in a professional economical and efficient manner. It is NOT about race. I really believe that most people don’t give a damn about what race, colour or creed you are but whether you can do the job or not. Clearly the people who are currently there cannot. By changing those people for people who can – and there are lots of people who can - the situation would improve. Transformation is not the problem. I have lots of black staff. The problem is the system. Trying to register them is a nightmare. Most of the time you simply give up. I just cannot get their registrations out of the EAAB despite most of them having some sort of a degree.
Then there is the training. I am supposed to monitor and mentor them. The EAAB have NEVER contacted me to say that I am the appointed mentor, they have never been supplied with a copy of the Code of Conduct, and they have never been supplied with workbooks. I have NO IDEA how I am supposed to support them with their workbooks.
The EAAB has become a money making and spending exercise. The training is pathetic and totally irrelevant to the day to day lives of estate agents. The EAAB has no clue as to how estate agencies work, especially those that hardly touch sales but rather do body corporate management, letting and the like. They cannot understand that they are responsible for the estate agency industry, so people who work in associated fields such as valuation are ignored. I spend days on valuation training but this is not recognized by the EAAB.
This new act is just going to be more of the same. Ignore it and it will go away. Only those who are registered with the Board will be chased, audited, debarred. Unregistered agents who steal money and who have been reported to the EAAB will simply continue to operate.
I hear your frustration.
I read with interest the article relating to the above which I think speak for themselves.
As an educator in the real estate industry, who at one time was on the Board’s Education Committee where we represented all the training institutions in the country, I would like to take this from a different perspective.
We all agree that change in the industry had been very slow and that we all need to be participants of change. The biggest barrier remains not the education programme and the cost thereof but the "employment" in the industry.
It is not one in which salaries are paid and it requires financial backing. The industry remains largely a commission-based industry which requires financial self-sufficiency in the first year at least. It also requires modes of transport that the agent must provide as well as a fair understanding that if you are not successful you are unlikely to make it. A down market, such as currently exists, it makes it even more difficult.
The second problem with transformation is that the responsibility seems to fall on the big agencies such as Seeff to drive this. I do not have the exact number at hand but would guess that most participants are small one man shows or partnerships which often are small family-run businesses.
The possible entrance into the industry could be through a rental portfolio/ business where at least there is usually a small basic and the commissions are forthcoming from month two.
I am aware that there are some companies, mainly online businesses, which offer basic salaries and maybe this is the start. The changes however are going to be slow and I am pleased that at least the EAAB have made some effort in finding ways to accommodate the PDI's.
Thank you for the chance to give an opinion.
Any transformation is always a first hoo-ha before they will accept the change.
However, if the land – South Africa – and role players will keep on doing what they are doing and treat it as a black and white, we can forget to ever have transformation and live in peace.
The fees that we had to pay just to RPL was hectic in a time when we had no sales to fund the RPL. They didn’t ask if we had the money or not, it was just to be completed before a certain date.
After that it was still the yearly FFC certificate and then the PDE.
After that is was the yearly CPD of R2000 and R2500 for the principal.
I would propose that we treat all role players the same. If you want to be an agent, you have to work under a principal. That principal can then apply for a bursary for that year from Services Seta.
You can also ask the principal from the company to pay the fee for the FFC and the internship and then as soon as your first deal is signed, they can make arrangements to deduct the fee from the commission over a certain period of time.
I can just mention that I paid for my RPL and FFC, PDE and CPD from funds that I loaned from my husband’s bond. So, yes, lucky me, I had a bond who could help me.
My one agent was all on her own with no income and I had to sponsor her as well. She didn’t even had money for electricity or the municipal fees. She had to loan money from me, as her principal and from her mother, who was a widow with limited income. Still, to keep operating as an agent, she had to finish the RPL and pay for her yearly FFC – no questions asked.
I would also think that the new entrant can maybe pay off the FFC over a certain period and not in one lump sum. You can even sign a debit order or ask the principals to pay it over monthly.
Once again, if you don’t have deals at first, you can make a deal with your principal to pay it over and then deduct it from your sales, once signed.
I would also like to ask why the CPD is so expensive as it is the most expensive continuous learning in the industry. Almost all the attorneys give certificates for continuous learning and it doesn’t cost the EAAB a cent.
Once again, I think it is time that we treat all people the same, no matter their skin colour.
To be an agent is hard work, you work long hours and months on end doesn’t get any money for your phone, petrol, ect. and that is a real problem as I think this is the biggest reason why not everybody can be an estate agent. You have to have somebody or some money to begin with. The question of how I can’t answer as the principal can’t keep on sponsoring the agent for telephone and other expenses as well.
Hi, I agree with helping people to become agents, but I don’t agree with lowering standards.
Certain people, black and white, cannot afford to become agents. This is purely for financial reasons! My suggestion would be to support these people financially.
The money can then be paid back once these people start earning a living wage.
This payback can be enforced by withholding the FFC if payments are not forthcoming! This would be similar to the students grant!
Following the article, ‘EAAB will assist previously disadvantaged agents with FFC’s’, some of you wrote to explain your concerns about this plan. Read here what they had to say and share your view by writing to firstname.lastname@example.org.
Andre du Plessis, estate agent, wrote: Dear Editor, reading the article on FFC exemptions for PDI, I could not help but feel the unfairness to new ‘white’ entrants.
I take it Rebosa will challenge this in a class action against unfairness/unconstitutional in the Constitutional Court. I think the EAAB’s ‘help’ is misplaced.
Surely, allow new blood into the industry, as the average age is 58, not limit it
What the EAAB is doing with unintended consequences, is to make PDI recipients dependent, telling them, they are unable to stand on their own feet, what a slap in their faces. This unfair ‘BBEE’ arrangement won’t work either, time will tell.
The PDI will probably get internships easier and remain employed by bigger firms whereas white candidates will find the only way to survive is doing their own small start-up, but please don’t disqualify or exclude, because of colour of skin – it remains unconstitutional and makes PDI candidates feel subservient, ‘lessor’ and almost the ‘beggars’ of the industry, surely not what the EAAB intended ?
Linda Byron, office manager, wrote: I attended the Transformation Workshop that took place in Port Elizabeth and the first thing I noticed was that the majority of the people in the room were in fact the very PDI’s this discussion pertains to. When I queried with the representatives of the EAAB why the majority of the “white” principals had not been notified or appeared unaware, their response was “our target was 100 attendees and we got 100”.
The problem with their 100 was the completely wrong target audience. As has been pointed out the majority of the Real Estate offices are currently “white” owned, therefore surely it was important for them to be there to understand what the EAAB is planning and how they can assist in the process.
Then we come to the actual plans – I am 100% in agreement that we should exempt PDI’s from all the costs involved with becoming an agent. I am even prepared to agree with the deviation from audit requirements but what I believe is something that should never be entertained is doing away with or lowering the standards of education. In 2008 we as a profession made strides with regards to “professionalising” the industry with new educational requirements. Instead of exemptions why don’t the EAAB do the following:
- Publish updated learning material in 2 or 3 of the main languages other than English. (This would enable learning in a language they can understand)
- Provide study bursaries to cover the cost of the NQF4 qualifications.
- Provide online learning modules to assist the Interns to obtain the necessary education and qualifications.
- Remove the costs for the PDE exams.
- Remove the costs for the CPD.
I think it is demeaning to not give the PDI’s the opportunity to educate themselves in a profession they have chosen. How are they ever expected to compete in a competitive market without the required tools. Why should home sellers and buyers living in PDI areas be expected to receive real estate service and advise from Agents that are not trained or qualified to provide the service. They have the right to access the same level of professionalism and have their hard-earned money protected by the same level of diligence and professionalism. Transformation is not about exemption it should be about opportunity, upliftment and empowering people to develop skills.
Baruch Keren wrote: Dear Editor, I would like my opinion to be published; and this would be about …. decision The Estate Agency Affairs Board (EAAB) says soon estate agents from previously disadvantaged groups (PDIs) should be able to apply for exemption from some of the current requirements to qualify for a fidelity fund certificate (FFC).
In what country do we live?
This is a pure act of discrimination by colour, race and origin.
Why is EAAB making segregation on the grounds of race?
We are living in a free society and it’s already 27 years after the apartheid era was gone!
Please question those clerks from EAAB…where do today’s previously disadvantaged groups come from … after this country for 27 years being a free and democratic society?
Maybe tomorrow someone alike EAAB will suggest that previously disadvantaged groups (PDIs) could be exempted from current requirements to be a medical practitioner?
Why are they lowering the standards of this country which are already below a low level?
ESKOM is already making us used to living 4-6 hours a day without electricity.
We must stop such practises in this country!!!
(Disclaimer: The views and opinions expressed in these letters are those of the authors and do not necessarily reflect the official policy or position of Property Professional.)
Lauren Levin wrote: I am hoping you can answer and clarify these 2 questions I have for the new amendment to the FICA Act for estate agents:
- Does an agent have to have visited the client’s property to verify their physical address and if they have not, does the client have to have his proof of address certified by a Commissioner of Oaths. Also, with regards to people out of the region or Foreign Nationals – do they have their I D documents/Passport certified?
Comment from Emil Bihl, Director of the Risk Management Division at Erasmus Motaung Inc.: This is an excellent question. If I am able to answer this question, then it means that we are back to a checklist approach [a rules bases approach], which is exactly what the amendment wants to prohibit.
If you the estate agent deems this specific client a risk, then you should follow such additional measures to confirm information. I think it wise to have all documents certified by a commissioner of oaths, as you then transfer the risk to that Commissioner of Oaths. Just ensure that you get the original certified copy.
- What is the new cash reporting threshold for cash paid into your account?
Comment from Emil Bihl: It remains at R25,000.00
Sharon Blignaut wrote: I read your article on the new logbook system. I have already started, however think this is a great idea and am going to give the digital one a try.
In response to the article on e-logbooks, some intern agents who registered in 2019 asked whether they could also file their logbooks on the e-logbook system. One, asked to remain anonymous, said all his logbook information is stored online and he is yet to print out “the mountain of paper work for his final submission”.
The Estate Agency Affairs Board was immediately approached for comment but has not replied to date. Registered facilitator, assessor and moderator Jo-Anne Strydom was also approached a few days later. She said no, it is only new interns that registered in 2019 that may use the new e-logbook system, not interns from earlier years.
Linda Grove wrote on our Facebook page: I am a little perturbed and would like some clarification on the following rumour. I was just informed by a Mortgage originator if an existing FNB client make application for a bond,the Mortgage originator is required (and forced by their system) to submit a bond application to FNB first AND allow FNB 24/48 hours response time before any other bank may be approached? Can anybody confirm this is in fact the case?
Marlon Shevelew, director with law firm Marlon Shevelew & Assoc. answers: I can confirm that this is not the case.
We do not have to wait 24 / 48 hours to submit to the other banks , we submit simultaneously to all of the banks.
Same applies for example , an Absa client , we also don’t have to wait a 25 / 48 hour period before submitting to the other banks.
With the deadline for compliance with the amendments to the Financial Intelligence Centre (FIC) Act looming close from 2 April 2019, we’ve asked Emil Bihl, Director of the Risk Management Division at Erasmus Motaung Inc to respond (comments in italics) to queries from readers.
Erna Rossouw wrote: I would like to clarify the aspects of registration of an estate agency, within 90 days with FIC, under the new legislation and would thus appreciate if you could assist with the following:
Comment: It is not needed to re-register. What is required is to update the details on the FIC’s new reporting system. If you are already registered, you should have received an email from the FIC with your new identification code [Org ID] with prompts to log into the website and access the registration portal.
Comment: This is a great question, as the person who posed this question, clearly understands the importance of the relationship between its compliance officer and the FIC.
Because there is a new reporting system, it will be required to update the compliance officer’s details, especially the email address of the compliance officer is very important to the FIC to ensure accurate communication with the correct internal stakeholder.
Comment: FIC requires you to attend to registration now.
Khulile Macoba wrote: If I may ask, are the property developers affected by these developments. For instance, where a developer is selling units, are they affected by these developments?
Comment: Let’s be all attorney about this and start with the definition of an estate agent…
Section of the Estate Agency Affairs Act, 112 of 1976:
(a) means any person who for the acquisition of gain on his own account or in partnership, in any manner holds himself out as a person who, or directly or indirectly advertises that he, on the instructions of or on behalf of any other person—
(i) sells or purchases or publicly exhibits for sale immovable property or any business undertaking or negotiates in connection therewith or canvasses or undertakes or offers to canvas a seller or purchaser therefor; or
(ii) lets or hires or publicly exhibits for hire immovable property or any business undertaking or negotiates in connection therewith or canvasses or undertakes or offers to canvass a lessee or lessor therefor; or
(iii) collects or receives any moneys payable on account of a lease of immovable property or any business undertaking; or
(iv) renders any such other service as the Minister on the recommendation of the board may specify from time to time by notice in the Gazette;
Should the developer’s actions in selling these properties fall under this definition of an estate agent, then the developer will be deemed an accountable institution and will need to be compliant with FICA requirements. The FIC’s requirement is only to be defined as an estate agent in terms of Act 112 of 1976.
Do you have more questions about compliance with FICA requirements? Email email@example.com .
Keri Ferreira, principal wrote with reference to Rebosa’s comment to a question by Dean Janse van Rensburg regarding the new Bill’s allowance that small agencies of previously disadvantaged groups may apply for exemption from submitting audit reports:
Rebosa’s comment: “The EAAB has launched a transformation initiative in terms of which previously disadvantaged individuals are exempted from submitting audit reports. To the best of our knowledge trust accounts must still be kept, there are certainly some legal issues around this.”
Keri wrote: Relating to the above – all agencies should need to submit audit reports as its most likely that inexperienced companies, who are not backed up by a large group, will be the most likely agencies, that fall foul of the usage of a trust account. Submitting a trust account is not onerous and is not expensive in the grand scheme of things!
The CPD points is expensive and a rip off as no subjects are covered that actually benefit the agent!
Guillermo Lapidus (GL), an intern agent recently wrote to Property Professional commenting on the Estate Agency Affairs Board (EAAB) and the new Property Practitioners Bill. We asked Jan le Roux, CE of Rebosa to comment (in italics).
GL: I’ve been involved in property for only 7 months having come from the architecture and construction industries, where their professional bodies are long standing and highly respected institutions by the public sector at large, contrary to the EAAB that is, to say the least, failing to provide the services it was created for.
JlR: It is unfortunately sad but true that the EAAB is certainly not setting a high standard for service delivery.
GL: How can the public respect the real estate professionals when their own representative body is in such shambles?
JlR: The public is certainly not aware of the workings of the EAAB. The respect of consumers can therefore only be earned by the professional behaviour of the estate agent.
GL: Regarding the proposed Property Practitioners Bill, it is so sad that it not only creates problems where there were none, but it restricts the “real” estate agents even more from practicing their profession and most pathetic of all it misses out on a great opportunity to legalize the profession properly by dictating that properties can only be sold by registered and properly qualified estate agents and agencies. And what is more amazing is that none of the CEOs of, at least, the main industry players mention this!
JlR: The industry is legalised, and the Property Practitioners Bill is not limiting entry to the industry any more than the current Estate Agency Affairs Act does. Forcing consumers to use the services of an estate agent is not legalising the industry, it is simply unconstitutional. It is for this obvious reason that serious industry players never raise this point.
GL: What we need is a bill that establishes by law the minimum commission percentage agents are allowed to charge, as it happens in other professions.
JlR: This is not factually correct and a very dangerous subject to raise. Should the government ever get the idea of regulating commission it is virtually guaranteed that it would be a ridiculously low amount.
GL: For goodness sake, even only registered electricians and plumbers are allowed by law to issue a Compliance Certificate.
JlR: Electricians and plumbers are trained and have to qualify to become such. They, unlike other individuals, are therefore in a position to have an opinion on an electrical or plumbing installation – this makes perfect sense. A property can, of course, be sold by an individual without the assistance of an estate agent. Such a property can be advertised, a purchaser can agree on the price and the parties can go to a lawyer to draft an agreement. Of course, we all believe that would be ill-advised because of the many pitfalls such a seller can come across from valuation to marketing, etc. A good case can be made that properties achieve a higher price with the assistance of an estate agent and with less hassle – making it a legal requirement however is not a good idea.
GL: Any salesperson that was selling electrical appliances at a wholesaler can suddenly go and work for a property developer selling units off-plan without the foggiest idea of the legalities or any real estate training? Come on!!!
JlR: Rebosa is in full agreement and has made many presentations to government in respect of the Bill to try and ensure that developers also have to register as property practitioners in terms of the Bill. It is not only unfair but detrimental to consumers if that is not the case.
Dean Janse van Rensburg, sales and rentals specialist asked whether by exempting smaller disadvantaged agencies from keeping trust funds, the Estate Agency Affairs Board (EAAB) isn’t applying double standards.
He wrote: My question is, why do we have to do NQF4, PDE4 and 5, CPD … and if you look on these bank sites and repos on Property24 for the banks they have agents etc. Do they have to do all this training or are they exempt like the attorneys?
There are double standards with the EAAB and they are losing lots of revenue by not enforcing this on those who enjoy the benefits of real estate transactions without the sweat and blood that goes with it.
The reason why audits became mandatory is because of Wendy Machanik’s usage of trust funds for normal day to day business, yet now Mamodupi Mohlala want to exempt small disadvantaged agencies from the audits, is this not double standards?
Rebosa’s comment: The EAAB has launched a transformation initiative in terms of which previously disadvantaged individuals are exempted from submitting audit reports. To the best of our knowledge trust accounts must still be kept, there are certainly some legal issues around this.
Rebosa shared some of the questions they get asked regularly by estate agents and the answers they gave.
Rebosa’s comment: We do not believe that banks are acting as estate agents in terms of the current Act nor the Property Practitioners Bill - hence bank employees will not have to register. The definition of a property practitioner in the Bill reads: “….means any natural or juristic person who or which for the acquisition of gain on his, her or its own account or in partnership, in any manner holds himself, herself or itself as a person who or which, directly or indirectly, on the instruction of or on behalf of any other person……”. There seems to be no direct “gain” for the banks from a transaction in doing this.
Rebosa’s comment: Rebosa participated in a long session with the EAAB officials late last year to enhance the programme. We are still looking forward to improved results, the question is certainly valid.
Rebosa’s comment: This differentiation is totally unjustified, especially when one considers how many sole proprietorships there are in the industry where the agent and principal happen to be the same person. Rebosa has been raising this issue on various occasions with the EAAB.
Rebosa’s comment: This is a very valid argument and once again there is no justification for the current fees. Unfortunately increases were mentioned often to which Rebosa objected strenuously - so far with some success. Unfortunately, the Act does empower the EAAB to raise funds to balance its budget and doing it through CPD fees is not illegal.
Rebosa’s comments: The EAAB financials are published under “Publications” for anyone to peruse. (Visit https://www.eaab.org.za/publications/annual_report)
Rebosa’s comment: The EAAB is not outsourcing the administration of FFC’s nor the presentation of CPD courses - hence no tenders were required to the best of our knowledge.
As to the boycott – it is not a good idea. If fees are not paid timeously, FFC’s are not issued, estate agents are then not entitled to earn commission (nor will conveyancers pay such commission once the Bill becomes law. If by not paying fees agents faced a penalty only, a boycott might have worked or had an impact, but under current circumstances it would be suicidal.
In response to last week’s article ‘FFC backlog cleared says new EAAB CEO’, the following letters were received:
Good afternoon, I have just finished reading this article and I can only sit and wonder which parallel universe she resides in.
The EAAB last week posted their 2017/2018 Financial Report on their website. Don't bother with the content, just go to the Auditors Report......Qualified Audit result … nearly every paragraph starts with “Were unable to due to insufficient/incorrect …” etc.
Even something as simple as the number of bill boards erected. Target 15, report says 10 actual 6!! Based on this I doubt that any information either given to her or shared with any committee carries any weight whatsoever.
The costs of getting into real estate regardless of your skin colour is high and there are virtually no bursaries made available within the industry.
I do not believe that educational standards should be changed/lowered for transformation purposes. We need to remember that we as a profession are dealing with clients “life savings” and why should sellers or buyers of previously disadvantaged groups have to deal with agents lacking the standard of training
that their white counterparts enjoy. We need to ensure that all our clients have access to the same level of service, guidance and knowledge translating into working in the best interest of!
I think the CEO should pop back to the office and spend some quality time going through each section of the previous Auditors report and address each department with some probing questions!!
Good day, the new CEO has her facts incorrect. I have agents, who paid on time last year and still do not have FFC Certificates issued despite, following up repeatedly via the portal and call centre. In fact, the portal has numerous error messages when you attempt to upload documents or add a new request!
The EAAB needs to get its act together in servicing the industry... their response time to queries is appalling and many of the staff need to be properly trained in their positions. The general atmosphere of staff seems to be ‘it’s not my problem’ and very few have a work ethic.
To give an example it took me 2 years to get the EAAB to change the directorship of a company I took over and to issue me with an FFC. More than 10 different people tried to assist me, and more than 15 requests were made for assistance in this regard. Eventually I was charged with non-compliance, my portal was blocked and I had to pay a fine before they sorted the matter out. I even had to involve REBOSA. Finally, more than 2 years later, I gave up and closed the company down.
In my other real estate company, I am still waiting for 3 FFCs which were renewed and fees paid way before the deadline.
Commenting on the question, Should property portals share listings with others?, here is what some property practitioners had to say.
The basis of this discussion must start with the strength of the sole mandate document. Is this document legally enforceable? If it is and the agent is careful about the details listed on the mandate, then the agent should only approve of their listing being shown to as wide a client base as possible. This is marketing strategy.
However, the agent through the agency pays Property24 for the service that it offers and in light of that, the agent should have the right to determine if the property is to be listed with the banks or not. This should be a question on the listing form that will require a yes/no answer which may not be left unanswered. Any less than this is dishonest dealing, if I am paying for the privilege of listing on Property24.
An additional safeguard needs to be added, that when a mandate runs out or the property is sold or otherwise removed, the property will automatically be removed from Property24 and will thus be unavailable to the bank. Failing this the bank can act like an agent and wait until the mandate has expired and approach the client directly. Can we assume as well that the bank does not have access to the back page of the listing where all the personal details are kept?
I think this is highly suspect and needs many checks and balances before it is live. Perhaps if the bank is that keen to give a service to its customers it could offer space to the agency, who may well be a customer, to place a single add link on their website directing traffic to the agency website. This would lift a whole lot of suspicion. Who knows? The bank may even attract some more agency clients.
I have been having discussions with Property24 developers about the rather unfriendly way in which Property24 works. It is a great marketing tool, but they are trying to make it into a listing tool where it fails miserably. They are enforcing ways of working that are totally against the interests of the average estate agent who are simply following like sheep.
A typical example is the way in which data is entered into the system. From their point of view they want to control data - that seems to be their primary aim. It feels to me that they are only interested in getting a bigger share of the marketing market, not to making life easy for agents. A couple of examples will illustrate this.
- Sectional title detail seems to be rather unimportant to them (from a marketing point of view) but very important to sales agents who need the information to be able to complete sales documents. The information is there on their input form though obviously whoever designed the system was no estate agent. Building numbers are split between building number and building year where as in reality it is one number – the sectional title registration number for example 20/2005. PQ is somewhere at the bottom of the page in the EXTRA fields space. Door number and unit number are miles apart.
- The method of entering data is also agent unfriendly where they force you to put in owners’ details onto their data base in the way that they want it rather than a free field that is put in by the agent. Why? What is the advantage to the agent and why do they need to do it is such a way? Entering data is a nightmare as there is not real logic to the way and place where data is entered. Any ordinary agent or agency simply wants to have a database of properties that they can quickly and simply interrogate and make use of their own data. It definitely does not work that way with Property24.
I have been trying to find a practical estate agency database but that seems to be hard to find. Perhaps there is a gap in the market for such a database that works for agents and agencies rather that big business. Perhaps Property Professional could create such a database as I am convinced that it would be supported by many estate agents/cies. We need a practical solution to a practical problem. A system that does what is needed in a simple KISS way. It should be able to create online advertising in the same way as Property 24 without having to re-enter data for a second time.
Your article of 24 January, “Training Interns…”, asks the question, ‘Are estate agencies involved enough with the training of interns?’
The response states that we have not done this successfully sighting the high drop-out rate as evidence. I can only agree.
As a facilitator for NQF4, my drop-out rate experience over the last 2 years is around 50%.
In my interaction with the learners, the main reasons put forward are:
- An almost complete lack of understanding of the NQF4 study requirements, specifically the study time that is required.
- Extremely low-to-zero principal or senior agent support.
- Unrealistic expectation of the time typically required to close that first sale.
- Unrealistic expectation of the time required to actually receive that first commission.
These points can be summed up as a complete lack of preparedness of the interns. Whose responsibility is that? Who approved the appointment? What kind of induction was in place?
What responsibility must the principals shoulder for this sad state of affairs?
In my interaction with agents, interns and principals it seems to me that most of the principals do not understand the difference between their role as the business owner and that of PRINCIPAL.
How much principal development is taking place in our industry?
Why is their training and development not a key component of the PDE 5 course material?
Against this background, in practical terms, not regulatory terms, why do we need principals?
In my opinion, transformation is a pipe dream if we do not address this developmental issue. And it’s not only transformation that will suffer, our entire industry could descend into an unhealthy mix of rotating interns and illegal agents!
There is hardly any point to try and transform the Real Estate Sector with country wide EAAB Seminars when the elephant in the room, namely complete overregulation of this industry by the EAAB, has not effectively been addressed
It is this overregulation that has disheartened many a practising agent, wanting to throw in the towell, let alone bringing in new blood, representative of our countries demographics. Looking at the average agents age, close to sixty, with very little new black entrepreneurs wanting to enter this industry, clearly, the writing is on the wall.
If the EAAB can't or won't see this, there is little or no ointment that will fix this festering wound
With the last calls for comment on the Property Practitioners Bill being made, we asked whether there were issues that still concerned you about the Bill. Without a doubt concerns about the current lack of professional efficiency at the regulating authority, the Estate Agency Affairs Board, and how they are going to cope with extended responsibilities under the new act ranked as a top concern.
The EAAB is already cumbersome! The fact that estate agents have to jump through so many loops to be compliant is one issue we have to face. The other is the fact that we are a remuneration by commission only industry. This is a massive deterrent to young people wanting to enter the real estate profession.
I am writing you this email at 5.03 in the morning. (This is already my second - the first was at 4.30!)
We are practically working all the time just to keep our heads above water. Never mind the constant compliance requirements. I’m all for compliance. It’s establishing our industry as a profession. But at least instil measures in the governmental departments we are directly accountable to that will facilitate ease of compliance.
One glaring example is the ONGOING IT problems with the current EAAB. I’m sure you have reported enough on this ad nauseum, so I don’t need to re-report on the heartache and frustration we as property professionals have to deal with, with the EAAB.
Despite 30 years of experience as a commercial property broker, and being principal of both commercial and residential agencies, I would love to share my knowledge and expertise, and mentor, train and develop young property practitioners. But I already have to work every day of my life just to stay alive .... and even then I’m not with creditors banging at the door with the massive downturn in all sectors of the property industry last year.
It’s not insurmountable, but solutions will have to be reached because I see last month, Property Professional reported on a massive decline of estate agents and the fact that the average age in the industry is 60!
I am now even more concerned that, in its present form as proposed in the bill referring to those considered to be property practitioners, the number of individuals who will then need a FFC will place an administrative burden far in excess of what the current EAAB is presently, quite demonstrably, unable to handle.
The Property Practitioners Bill will fail and with it the EAAB will collapse.
I have, every year, completed my CPD, it has taught me nothing. Nonetheless I can still be of use to my business and the industry and whatever legislation we end up with, they can still collect fees.
The crazy, unconstitutional fines imposed on late payments resulting in agents not being financially able to renew FFC's. Also, the serious lack of feedback on queries, for example: last year I registered an intern. I completed the application and submitted it with proof of payment and still no registration. I queried, sent proof of payment again and still no feedback.
“The complaints are totally valid. Rebosa is getting legal advice to address non-delivery issues in respect to the EAAB."
My biggest concern is the BEE certificate, our turnover has always been well under R2.5M, suddenly this last year we had one transaction which pushed us over the limit, my ex-partner took his money and left the country.
Now I am left with the complications of BEE compliance without the income.
Turnover of under R2.5M should be exempt from the BEE certificate and turnover needs to be over R2.5M for at least two years running before the company has to apply for a BEE certificate.
Our company has always had a low turnover, I encourage my staff to study and contribute towards their studies, one of my administration staff has just got her matric she is over thirty and is now studying bookkeeping. I did not realise that within the Property Charter estate agencies and valuers with a turnover of over R2.5M were subject to BEE compliance. I thought we fell under services at R10M turnover.
Our company has three full time salaried employees, my husband and I draw a salary when there is money to spare, we have two full time brokers plus ourselves. Also, to attract brokers one gives them a high portion of their commission, so the company income is significantly less than the turnover.
The point I am making is, it is a feast or famine business and a company of under 10 people should not be expected to comply with BEE, it is far too burdensome cost wise. Our compliance as estate agents is already excessive, with auditing, FICA, EAAB self-assessments, COIDA, CIPC etc. At least 40 hours of my year is taken up by compliance, on top of that I have to do CPD in two disciplines as an estate agent and a valuer, look after staff and earn a living.
Very few people make it in this industry, people try it, but after a few months it does not work and they leave the industry altogether.
Ideally, I would want the threshold for BEE certification to be R5 000 000 (five million rand). R2 500 000 is punitive. A company with a regular turnover of over R5M can afford to pay for certification and has a few more quality full-time employees.
None of my non-white staff are interested in trying their hand at sales, they want a fixed salary, so I have to look outside of my company for a BEE shareholder.
It is also really sad that no credence is given to ownership by a white woman. I think I may be one of very few white women wholly owned commercial brokerages with more than 5 employees, surely there should be some points for that? We are in a hugely male dominated industry. The Property Practitioners Bill simply ignores white women.
Having read the recent article by Mike Spencer, the only real answer to bring in persons from the previously disadvantaged communities is for the industry to pay a basic wage, plus a very much smaller share of the gross commission earned per sale agreement.
This will also stop all the “quick start up, low capital” agencies and leave only those agencies dedicated to the growth of the property industry as players in the property sector. It will also level the playing field. Many franchisors believe that their offering is the only one that will make the franchises successful, but when you unpack the franchise, you will note there are huge deficiencies, such as:
- Franchise limits the franchisee to operate in a pre-determined geographical area only.
- Franchise requires hefty contributions to marketing spend by the franchisor, which build the franchise brand only, but not necessarily in the franchisee’s area of operation, nor for the direct benefit of the franchisee, who then has to support this with local brand building and thus adding further to his / her marketing costs.
- What exactly does the franchisee get for the up-front franchise payment, often in the range of R250,000 – R500,000 [depending on location] where that same franchisee still needs to rent space, equip the office, put up signage and branding, and have sufficient working capital to survive all the operational and monthly franchise costs for at least 6 months, before there is income from any sales that might have taken place. This capital costs in a small agency would be a further R250,000- R500,000, a total capital need of between R500,000 – R1,000,000.
- Over and above these operational costs, the franchisee needs to recruit new agents, train these agents, and often support these agents until the cash flow from sales comes into the agency
- By paying agents a small stipend and much less of the final gross commission, I believe there would be much more promotion of the franchisee’s name, and franchised brand directly into the local market place, than that of the “global brand” positioning by the franchisor who is the bigger beneficiary of this process, not the local franchisee.
Have a close look at the Australian property market where the so-called auction sales system is prevalent, handling around 70% of sales by auction. This is a glorified sub-franchise selling system.
The conventual 50’/50 % selling model is antiquated and no longer cost efficient for the agency, where costs for the company often exceed the 50% company income portion.
I read an article about CSOS. I agree there is a serious problem at CSOS. Something needs to be done.
I saw many complaints on Hello Peter on how ordinary citizens are treated.
I was horrified to receive an order when I did not receive a notice for hearing.
PLEASE help me what to do. I am frustrated.
Editor’s note: Kgoroshi was directed to contact the CSOS Ombud and reported back on the same day that he is happy that his case has been reinstated.
Sadly, the commission-only nature of the beast will ensure that there will always be a consistent drop-out rate and the mission of the EAAB and the SETA to attract and recruit agents from the previously disadvantaged community has, in my opinion, effectively failed.
We tried years ago at one of the top agencies to pay 6-month “retainer” stipends to new appointees, and yes, you guessed it, most if not all of them disappeared in month 7!
The industry needs a commission system not dissimilar to the life insurance industry, where agents are perhaps rewarded in tiers once a mandate is secured, with the bulk of the commission still due on transfer. But this will be very difficult to administer.
Firstly, I believe there is not enough commitment from the companies taking on the interns to ensure that they adhere to the need for completing their logbooks. These are seen by interns as an onerous task instead of an opportunity to use it as a learning tool.
The majority of interns in Port Elizabeth are allowed to renew their FFC’s endlessly with no one ensuring that any of the learning that should have happened has. We have interns who have held FFC’s for 4 years and longer that have not even downloaded the logbook.
The EAAB holds full status agents responsible for completing CPD points annually and blocks accounts should they not BUT nothing is being done about interns not complying with educational requirements. Lack of training leads to lack of learning which leads to lack of success which then leads to interns either leaving the industry or jumping from one company to another.
I have just joined a new office and I have set up compulsory workshops for the Interns to attend every 2 weeks to monitor progress, set new tasks and provide the necessary guidance and mentoring to get the logbook completed by June for those who are lagging behind with completion. Commitment is required from both interns and companies if they are serious about our profession.
The EAAB have never even bothered to keep the information in the material they sell to Agents for PDE4 & PDE5 updated from 2008 and yet the material is used for an open book exam. Changing course material like changing laws is only effective if there is monitoring and accountability for adherence and completion.
Dear Sir / Madam, I was one of the disqualified agents. Not for any reason other than my FFC payment for 2018 was apparently not received. In the EAAB’s wisdom, they took the FFC fees from my R2000 (2017 CPD fee) which left a shortfall that was never disclosed to me.
The “lodge a query” has never ever worked for me. I was reinstated (after paying more than R3700 of which R750 was a penalty for being disqualified).
However, since the re-instatement, I have tried to get them to open e-learning so I could do the 2018 (CPD) before 2019 arrived, I haven’t received any correspondence to why (I could) not other than the message of “you must first pay”. The queries I lodged was “successfully resolved” without any correspondence.
I went as far as asking Mr. Raymond Shokane to send me a list of all my payments (for which I have always sent proof of payment). E-mails was also never replied to. It is like agents are mushrooms that “ must” grow in the dark!
What I cannot understand is the lack of communication from the EAAB’s side. Ignorance and no replies are costing the agent extra monies.
4000 agents paying R750 in penalties = R3,000,000 In aid of what?
Every time he comes into the office he makes racist remarks. Today, he came in and said, among other things,’hoekom wil julle tussen die wit mense wees?’, referring to me.
I asked him ‘wie is julle’ refering to the question: ’Hoekom wil julle swart mense tussen die wit mense sit’
I told him he is not white and I am not black and I can sit and be where ever I want to be. By this time I was at my wits end.
Should any office keep such a client?
Jan le Roux, CE of Rebosa was asked to comment and answered as follows: “Fighting racism, just like charity, starts at home. Agents are strongly advised not to deal with clients as per this example. The behavious is clearly racist and unconscionable.
“Agents are strongly advised to sign the Rebosa equality pledge which is easily accessible on rebosa.co.za.”
I find the judge's ruling contradictory. No commission but then the application for 1st Jan to May that Signature and their agents should not have operated was dismissed!
I know of many agents waiting for their FFCs, due to the EAAB backlog.
I would never take the greedy and opportunistic route and refuse to pay them on what we agreed upon.
I am not implying this is what happened with Signature.
In my case l started querying my points in 2016. I wrote several email to them and continued to write up to 2018. Not a single reply was received.
How on earth can an organisation run on a system that does not take into account communication with its subjects. They told me that they do not recognise emails as a means of communication. This is why they did not respond to my queries in two years. Regarding their system of lodging queries, I did so several times and not once did I receive feedback. I challenge them to produce proof that they ever interacted with anybody after he/she lodged a query.
I visited the EAAB and had to go there twice before they could solve part of my problem. Each time you phone they do assure you that the problem has been attended to, but they never do as they promise. I am one of the very angry agents who has no faith in them.
When I went there in the last week, l was assured the money l paid for my CPD is in order, but it never gets done. I have lodged a query in addition to visiting them and nothing has been done. They are completely incapable of doing things on time and attending to each query as it comes timeously. A new system has to be put in place.
Rebosa has done extensive work and this and has published whatever guidelines available on www.rebosa.co.za. You will be best advised to access this information on the website. The RMCP template is also available for download on the site.
Why managing agents can be defined as property practitioners
Coenie Groenewald, COO of National Association of Managing Agents (NAMA) answers: To assume that most managing agents do not engage into selling and letting is not correct. Managing agents, mainly manage property but may also engage in the business of letting and selling.
Most managing agents will facilitate and operate their letting and selling departments under a different business name and entity and as such these companies and persons are indeed registered with the Estate Agency Affairs Board (EAAB).
Thus a letting agent or sales agent will be considered as a property practitioner.
We are still debating the fact whether managing agents should fall under the definition based on various aspects but support licensing and accreditation.
Jan le Roux, CE of Rebosa answers: Audit reports remain a requirement. The Bill merely allows agencies with a turnover of less than R2.5 million to have a “review process” done by an accountant instead of a full audit by a chartered accountant. It only saves a bit on the audit report. All agencies, unless the minister makes some ruling, are still compelled to have trust accounts.
Comment by Peter Tsikoe: My concern has more to do with, how does government laws protect those practitioners that regularly ensure that their ffc matters are up to date. Are there measures taken to rid the property practice of those that are illegal, i.e. non FFC holding agencies and agents. The property discipline seems to have become a laissez faire. Consumers are as a result at the mercy of fraudsters and money launderers.
Following our stories on FNB’s banking app, our readers had many questions, so we wanted to find a way to answer them that would benefit all our readers. Speakers Corner is the result. This will from now on be a regular feature in our newsletter where we’ll find experts to answer your questions. This week for the questions around FNB and Private Property, we asked Jan le Roux, chairman of Private Property and CE of Rebosa to answer the questions.
We don’t have detailed information on the contractual arrangement between P24 and ABSA but think it is very probable that the same can happen. We also not sure if agents are aware of this arrangement.
Rebosa has been running a print campaign in all major property papers for more than two years at a value of more than R1,800,000 – Click Here to see ads.
Shareholding in the Estate Agency Property Portal Company and in Private Property will be made available to the entire industry in the first half of next year. Shareholders will not get preferential treatment over other advertisers. Like in any other business shareholders qualify for dividends should profits be made and dividends declared.
Private Property was as surprised as the rest of the industry.
You are welcome to email your questions for consideration for inclusion in Speakers Corner to firstname.lastname@example.org