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.
Real estate agencies invest so much to improve services to external clients, but what are they doing to look after their ‘internal clients’, the committed intern agents who are struggling without a regular income, writes Jane Labuschagne.
I love the real estate industry but being a 46-year-old single woman, with a bond and two dependents to support this is not working in my favour. I am weighing my options.
The property industry has its highs and lows that are caused by external factors such as politics, economy, change in the standard of living etc. and because of these factors, in most cases agents take a knock.
Now being an agent in a new franchise there is a lot that needs to be done to take first position in the market. Planning and strategizing needs to happen to see what the competitors overlooked. I understand that to get your listings you need to be more out there and I that is so true. Action or visuals are better than words for most people. However, the expos, show houses, putting up and taking down area boards, property viewings, magazine drop offs, driving around the area and client visits all are for the agent’s expense.
My observation since being in this industry since 2016 November in Midrand, is that there are three types of agents: one with financial support from a partner, second with a small business on the side and the third with only family and maybe friends supporting them financially.
I discovered that people with stable financial support never last in this industry when faced with challenges, because they always have a plan B.
The agents that have a small business on the side, their first priority is their businesses and real estate is just a means to help them push their business to the next level but that does not happen in a given time frame, they jump the boat, because money is going out instead of coming in.
The last group of agents invests a 100% unto the business. Firstly, because they do not have a plan B and financial support, or maybe their financial support has run out. These are now your agents that share the vision and mission of the real estate franchise. They perform as expected and may even exceed expectation. Though things are tough they still give 100% in commitment and effort to the business, because these are the agents that understand the concept of being a business partner. The two aspects that drives this agent are passion and hope.
I see my brand invests a lot in terms of the brand and service level for their external clients. My question is, what is the plan in retaining these last group of agents, because they are the ones that will help the franchise fulfil its vision.
If you only look to one side of your business (external clients) and you don’t come up with a solution of retaining agents such these last group of agents (internal client), then instead of achieving goals, this will be more like chasing your own tail.
I suggest that intern agents are paid a retainer of R2000 per month during their first 12 months. After six months set up a review on their performance taking into account the general sales activity in the area. This gives the agent a chance to the commission they earn in their first year to pay of debts and even save up for rainy days in their second year.
In conclusion: Sales, commissions and profits will never happen without people. Training taught me you need the agent, the seller and the buyer to make a deal. The seller and buyer can be there, but if the right calibre agent is not in the mix, then the ideal to list and close a sale will remain a dream.
More estate agents have expressed their agreement with Rebosa that the Estate Agency Affairs Board (EAAB) can’t charge penalties to estate agents who are reregistering after a period of absence from the profession.
Jan, your interpretation of the act according to a past test case makes 100% logical sense, as opposed to the ludicrous EAAB interpretation which basically states that if you are an estate agent at say 18 years of age, practice the profession for 1 year, then decide this is not for you. 30 years later, you decide to give it another go, so now you must pay the EAAB for 30 years of “outstanding” fees before you will be allowed to re-enter the profession!!! How ludicrous is this woman?
It is time she and all the other incompetents are permanently removed from office!
They are just running a money making scam as another way to finance their GRAVY TRAIN, which by the way, is currently being funded by the exorbitant CPD fees!
Charge a rejoining fee, but to charge penalties with no correspondence warning the person there will be penalties is not reasonable. Reason should prevail. I have had two agents not returning to the industry because of the penalties. I paid the penalties for one who lasted only 6 months. It is a tough business and with the current economic climate, people will return but there should be a reprieve for at least 6 months.
Good afternoon. I was principal estate agent and left the market in 2011 without notifying the EAAB. In 2017 I wanted to register again only as a full status agent. I had to do my 6-year oudit of dormant trust account (R18000 cost from an auditor) and now have to pay R16000 penalties for that 6 years. I took me about 2 years to have this sorted out. Am I still obliged to pay such penalty?
When re-entering the industry in 2017, after an absence of 14 months, I had to pay over R3500 in penalties because I neglected to let the EAAB know that I resigned. I mistakenly assumed that my principal notified the EAAB of my resignation. Rebosa was helpful but in the end I had to cough up and pay. I sincerely hope that Rebosa wins this case! Even if the penalties remain, the amount per month far exceeds what is permitted as interest according to the Financial Act, I was told.
The lockdown and post-lockdown period has shown it is possible to run a real estate franchise remotely but whether that is the most preferable model long term remains to be seen writes Dr Andrew Golding, chief executive of the Pam Golding Property group.
With the announcement of the lockdown there was obviously an urgent and pressing need to enable our business digitally and remotely in all respects. This was both from an agent’s perspective as well as from more traditionally office bound employees, namely administrative, managerial, and other staff. Very rapidly and with the assistance of technology, much of which was essentially already in place, we were able to pivot the entire business to this new and dramatically different way of working.
Post lockdown, and as we are moving up through the various Covid lockdown levels, there is sense of the possibility of gradual return to using the offices in certain specific instances and with strict observance to the required Covid protocols, and generally only when deemed necessary. What this lockdown and post lockdown period has shown, is that it is indeed possible to run the entire business remotely but whether that is the most preferable model long term remains to be seen. I think it is inevitable that we will see some permanent changes to the ‘’old way of working”, but I also think that we are starting to see and hear the need expressed for some in-person engagement beyond just a Zoom screen.
Given the uncertainty of the times in which we find ourselves, I think it will take some time for things to ‘’settle‘’ into the new way of working more permanently, but at this early stage it seems to be a mixture of remote working and some (but reduced) office engagement as necessary or desired, which would suggest that the physical space of offices is up for review and potential reconfiguration. However, like so many issues related to Covid, it’s probably too early to tell definitively.
Mike Spencer has been in the real estate industry since 1975. He writes that South Africa has to get out of the current economic cul-de-sac caused by legislative red tape and explains what needs to change to restore investor confidence.
Property and development are the way how most successful countries pull their socks up and create a wealthier society for all. Singapore would be an excellent example where property development changed a basic, poverty-ridden island into one of the most modern countries in the world.
But we are failing to do the same in South Africa. Contrary to the pragmatic ways in which modern countries are uplifting their population by encouraging property ownership and development, here in South Africa we are making property ownership less and less attractive. Major construction companies are being destroyed in the process. South Africa’s economy is floundering and the number of unemployed is rising daily. Construction and development are an excellent way of employing people while at the same time providing living spaces and an opportunity to invest in the country’s future.
Why do I say this? Just think about all the new acts already in effect or which are to be brought into existence.
The CPA means that no developer can get funding for his new developments as banks will no longer lend to them. Previously any developer who sold 70% of his development could get the development fund loan needed. Now the banks feel that the risk is too great because the CPA says that any contract can be cancelled with 20 working days’ notice and thus funding is not available. Only developers who have the capacity to fund each project totally from their own funds can do developments. This has resulted in the demise not only of developers but also the supporting industries such as brickfields, roof and truss makers, tile manufacturers and their supporting industry members such as plumbers and electricians and painters and more.
The POPI Act now forbids or makes near impossible many forms of marketing vital to the development industry to market their products. This is again negative for the building industry, especially as it is no longer legal to build up a history of their previous buyers when marketing their developments into the future.
The legislation requiring a 40% low cost housing component in every new township development does nothing to encourage hard-pressed developers to be enthusiastic about getting into new developments, especially when it can easily take up to 7 years to get township approvals.
The proposed law to allow for the expropriation of property without compensation, which is applicable to all property, is absolutely a total disincentive to invest in new projects or to buy rental property as a long-term investment.
Even such acts as the Sectional Titles Schemes Management Act are designed to be as complicated and difficult to implement as possible. For example, the act has converted a relatively simple show of hands voting system into one of a PQ voting system. Not only does it make attendance and voting overly complicated but extends the time needed for meetings considerably. They also increased the number of owners needed for a quorum from quite moderate levels to 33.3% which is impossible to achieve in many cases. If a meeting cannot be held because there are not enough owners present, then anyone – yes anyone- who comes to the postponed meeting the following week automatically forms a quorum and makes all the decisions. Complicating the administration of these developments does little if anything to encourage anyone to become involved as an investor in this market – without investors you won’t be seeing new developments.
Previously the act allowed for non-payers, rule breakers and troublemakers, to lose their right to vote, but the new act says the body corporate has to take them to court and prove their guilt before they can lose their vote. It is another incentive not to invest in property. More importantly, owners can’t evict tenants who do not pay rent. I have had a tenant since September last year who has not paid rental for 1 year. This non-paying tenant had the audacity to lay a charge for harassment because I came around to my flat to demand that they pay up or get out. They did not pay the water account, but I am not allowed to disconnect the water or electricity! Why can tenants not be held responsible for not paying or be forced out? Does this encourage people to invest in new properties and encourage development?
What is the solution? Firstly, acknowledge that building and development is the powerhouse of many developing and emerging economies. The building industry, if properly encouraged, can create many thousands of employment opportunities. To do this every overly complex, red tape-filled act must be reviewed, and amended to be as simple as possible to understand and implement. People must be made responsible for their actions (or non-actions). If you do not pay rental, then you should know that a simple system of notification will be followed by automatic eviction. Certainly, landlords and body corporates should be able to disconnect services that have not been paid for. How can a landlord be forced to continue to supply a service for which they are not being paid – it does not make sense.
Getting development and building on the go in a large way will be a way to get our economy growing again and to provide jobs and business opportunities on a large scale.
Homeowner Association (HOA) budgets are under financial pressure as more homeowners are falling into arrears with levies as a result of the restrictions around the pandemic – however may HOA’s restrict levy defaulters’ use of communal amenities as was suggested in ‘How to stop HOA levy arrears’?
According to one Property Professional reader the answer to this question is no. Kaysha wrote in her comments: This does not appear to be the correct position. Read Fisher v Body Corporate Misty Bay (2012 (4) SA 215 (GNP)) wherein Judge Malesela Francis Legodi “disagreed that writing a rule into a contract or the scheme’s conduct rules allowed the body corporate to resort to unlawful action and that any limitation of access that would curtail the applicant’s possession or use of the house and/or motor vehicle amounted to spoliation”.
The circumstances in the case noted were quite specific and somewhat different to what we had in mind in our article. However, the issue is clearly contentious, and rather than risk causing conflict in any HOA, we withdraw our suggestion about restricting levy defaulters from using communal facilities, and also apologise for any confusion caused. However, we would urge HOA directors to use all other remedies at their disposal to deal swiftly and decisively with defaulters, for the sake of those owners who do pay.
Managing agents need their own professional body. The definition of property practitioner in the new Act doesn’t apply to managing agents writes Phil Rowley, managing agent for some 20 years.
The definition of property practitioner in the new Act doesn’t apply to managing agents, but I have never taken up the cudgels with the EAAB regarding this matter.
However, with the new Property Practitioners Act, I realised that the definition of a property practitioner did not apply to us. Further reasoning makes it quite plain that there is NOTHING that equates or even remotely identifies the functions, business, responsibilities, or service of a managing agent to that of an estate agent.
I also practiced as an estate agent for many years, so I do know the difference. I have had to keep my estate agency, and trust account (which I do not require) in order to continue in my present practice. This with the CPD exams, has cost me a great deal of money over the years. There is also little in the exams that apply to us.
I am pursuing my argument that normal managing agents, EXCLUDING executive managing agents, are NOT property practitioners, simply because the weight attached to these assertions is fairly conclusive to any thinking person.
NAMA is a great institution, of which I am a member and advocate Barbara an incredible help with the STSMA. So, if NAMA could somehow become the institution under which managing agents can be qualified, then we would finally become the professionals we aspire to.
I must repeat – WE ARE NOT ESTATE AGENTS! WE ARE NOT ADMINISTRATORS OF PROPERTY! We need our own professional society for a very select profession.
With regards to the new Property Act, I wish to make the following comments:
The assertion expressed, without explanation, that managing agents are “property practitioners”, contradicts both the S.T. Act and the CSOS Act – and I quote the latter: “The scheme management service as defined in the CSOS regulations means any financial, secretarial, administrative or other service related to administration of a community scheme”. Bear in mind, this is referring to the scheme – NOT the land upon which it stands.
The definition ascribed to property practitioners states clearly that it applies to those who “manage immovable property”.
So, for a start, in order to “manage” common property in a complex – one would need to be an “Executive Managing Agent” – subject to the duties and obligations of the Trustees, as per M. Rule 28. (3) & (4). And if one studies the same Rule (5) (b), it states plainly that even the various duties placed upon an ordinary managing agent, are “under the supervision of the Trustees”. They do not require separate management obligations! This is vital in understanding the position of a managing agent in a body corporate.
Immediately it becomes obvious that it is the Trustees who are responsible for managing the common property as per M Rule 9 (b) AND Section 7 (1) & (3) of the Act – where they are described as “Owners of the Land”. Even Regulation 16 (1) (ii) of the S.T Act 95 of 1986 states:-“control, management and administration of the Common Property”.
Managing agents are very definitely NOT common property managers for a very good reason. In trying to inspect, report upon and maintain the common property would require hiring a specialist to perform such duties – way beyond what is required of any managing agent!
In fact, that is why most larger complexes have care takers. Managing agents are NOT caretakers. Yes, all caretakers should now be property practitioners. To repeat, managing agents purely and simply administer the business affairs of a body corporate. In fact, our particular management agreement specifically states that we do NOT manage the common property.
I have an email from Dave James (of NAMA) who specifies that “the managing agent normally does not manage the common property … . The managing agent very seldom gets involved in physical management”.
Kind of contradicts any assertions to the contrary.
And here below is a comment from Craig Guthrie, of Guthrie, Colonna Attorneys:-
Reading the Property Practitioners Bill together with the Community Schemes Ombuds Act 9 of 2011 (“CSOS Act”), a managing agent would not need to register as a property practitioner so long as they are providing their managerial services to a community scheme as defined in the CSOS Act. Examples of a community scheme being a sectional title development scheme, a share block company or a home-owners association.
Finally, here is what sectional title specialist attorney Marina Constas says in her book:
“A managing agent is appointed to perform specific financial, secretarial, administrative and other management services UNDER THE SUPERVISION OF THE TRUSTEES. In NO circumstances can the Trustees shirk their duties and obligations under the Act. In other words, the buck stops with the Trustees! Managing agents are JUST agents.”
Therefore, I rest my case and there is absolutely NOTHING in Rule 47 that determines a managing agent must be a property practitioner.
Social media platforms are abuzz with estate agents complaining about their July invoices from Property24. With the reopening of the real estate sector in June, pent-up demand resulted in more leads than during lockdown hence an increase in subscription costs for many agents, explains JP Farinha, CEO Property24.
Our For Sale subscription costs are based on lead brackets. They are payable in advance, so July’s invoices were based on June’s leads. Post the hard lockdown, once agencies were again able to reopen for business, we experienced a substantial increase in lead volumes. The increase was a result of both pent-up demand, and also the lowering of interest rates.
The jump in leads has actually over-compensated for the loss of leads during the hard lockdown so that we are now in a position where we have more leads generated in 2020 year-to-date than the same period in 2019.
The large increase in lead volumes has resulted in most agencies moving into a higher lead bracket and the resultant increase in costs. Recent discussions with many agencies reveal that this increased volume of business has indeed resulted in record levels of contracts being signed.
We are confident that our prices reflect excellent value to agents.
(PS: In recognition to the financial impact of the lockdown, Property24 gave a 100% discount to subscribers in April followed by a 50% discount in May. Editor)
Please Rebosa speak out on behalf of South Africa’s estate agents to get answers from the EAAB re outstanding FFCs, non-existent CPD courses and the lack of communication, writes Chris Crous, principal Jawitz Pinelands. Jan le Roux, CE Rebosa responds.
So, the EAAB has shut their doors once again; this time till the 1st September, because of someone coming into contact with someone with the C-virus. Like our Deeds offices this has just become far too frequent and begs the question 'why go to work, if you came into contact with someone who may have the virus'?
Isn't it just so very easy to get some more time off at full pay!!
If I am wrong, please correct me, but I don't believe I am. At our agency we do everything by the book, ie sanitising, social distancing etc., since re-opening on the 1st June and not one of our staff have missed one day at work since. I am sure that this applies to most other agencies.
Surely the time has come for all principal estate agents, with their sales and rental agent teams, to stand up and say so far and no further with the EAAB.
AND that all CPD payments for 2020 paid by agents to the EAAB, must be refunded.
That no agency / agents pay for the renewal of their FFC for 2021 till we have answers to our issues.
Therefore we ask that Rebosa speak out on behalf of the SA estate agents and meet with the Minister and the CE0 of the EAAB, to get a clear undertaking that all these issues re outstanding FFC's 2019/2020, re non-existent CPD online courses, re total lack of communication etc, will be addressed ASAP. What is the point of paying for something that is of no service or value??
But, like so many things, unless we speak as one voice, nothing is going to happen, and everyone will continue to complain and complain.
Whereas normal business practice would necessitate the payments being refunded, I do believe that it might be better in this case to let sleeping dogs lie. The EAAB does not have the wherewithal to refund such payments and insisting on same could actually cause delays and confusion. It at least does help if one's account is credited accordingly.
The failure to make CPD courses available is of course inexcusable as is the lack of communication in this regard. Our information in general is, though, that the value offered was negligible at any rate. It does not make a lot of sense to complain about something you don't value in the first place! Rebosa is doing what it can to motivate the enhancement of the CPD courses and the timeous delivery thereof.
We are doing our level best to communicate with the Minister but strongly advise against a boycott on the payment of CPD and FFC fees. The board has the power to not issue FFC’s in such an instance resulting in agents not earning a commission – a situation where one will be cutting one's own nose to spite one’s own face.
We do understand and share the frustration.
Is there no way that the Estate Agency Affairs Board (EAAB) can be held accountable for gross negligence? estate agents ask in reaction to the news that the EAAB did not renew the industry’s personal indemnity cover.
Is there no way that the industry can all stand together and institute a class action for gross negligence and maladministration against the EAAB and then also against Mamodupi Mohlala? Then also institute an action to remove the EAAB as the governing body for the industry and then let the industry itself form their own regulatory body comprising of representatives from the various independents like Rebosa and IEASA? Right now we are all being ripped off so that others can live a lavish lifestyle on fat cat salaries with benefits etc. What has the EAAB done to try and assist and seek government. relief for the industry during lockdown? I stand corrected but if memory serves me well real estate is the fourth biggest contributor to GDP. The government gets their slice on all deals be they VAT or transfer duties. Then we still get taxed on our income but when the paw paw hits the fan, we get the middle finger. First things first, let the industry self-regulate. Maybe they are too scared that they will be shown up when the industry runs the way it should.
Real Estate has a lot of legal things. Unfortunately we all come from different industries with or without legal background. The new youth interns have no or little experience of any field.
Knowingly or unknowingly, we are all at risk of being dragged to court for whatever reason good or bad.
I strongly believe that the authority can cover us just on this one unlike the EEEB which was there to protect the public not for us as agents.
The EAAB does not care a damn for any estate agent. It is a money-making racket. The CPD structure has no structure and they are sitting with our money and we still have not received any assignments or details for this year. Take all the money received for this and the interest will be tremendous for they will benefit.
I accidentally sent an amount of R7 200 to them by EFT and I have been trying since April to get my money back. They are now saying they cannot work because of Covid.
I am arranging my own cover for public liability and professional indemnity at a premium of just over R5000 for a 12-month period.
I shall not be renewing the EAAB membership which was to have provided such cover which was part of membership fees paid last year, and now again for the new year going forward.
I trust that REBOSA will act on behalf of the industry and secure the interests of estate agents which is to replace the EAAB who cannot meet its own obligations and required regulating of the industry in protection of consumers.
Win the consumers and EAAB will find it difficult to gain confidence of its own purpose.
I feel that what the EAAB has done, needs to be investigated and people should be held accountable. Firstly, I want to know what happened to the funds that we paid all the years to cover us. The yearly fee included the insurance cover. Why should we pay more if there is no cover. Proper CPD courses should be done.
In level 3 lockdown visits with family and friends at home are not allowed. However, a trustee writes that owners of their large sectional title complex protests that the trustees are infringing on their rights when they enforce this rule. He asks what can they do and not do?
Trustees are of course expected to assist with enforcing the regulations issued in terms of each disaster alert level (currently Level 3). So. it is reasonable for them to instruct security and access control to not allow visitors and only allow authorized deliveries and service providers to enter the complex at this time. Any owners who resist or protest should be referred to the CSOS (Community Housing Schemes Ombud Service) should they wish to escalate their complaint.
There is no way a show house can meet the requirements set by the Estate Agency Affairs Board (EAAB) COVID guidelines writes Tony Clarke, managing director Rawson Property Group.
The comment: “The guidelines of the Estate Agency Affairs Board (EAAB) doesn’t prohibit the hosting of show houses per se but do list a number of safety requirements to adhere to during the physical viewing of a property” (‘Covid 19 the gamechanger for real estate’) refers.
Paragraph 8.2.1 of the EAAB guidelines reads as follows: ‘Any viewings of a property should be done virtually. Physical viewing is only recommended where a buyer/tenant has expressed definite interest in a particular property, and in line with viewing protocols.’
According to 8.2.1 above, the buyer/tenant should only be taken to the property once such buyer / tenant has expressed a definite interest in the property. There is no way that holding a show house can meet this guideline as the visitors to a show house arrive out of the blue. An agent has no way to determine a buyers “definite interest” before exposing the seller’s property to such undue risk.
Estate agents working from home isn’t really new as there are agencies that has been doing just that for years but perhaps the cost savings this has for agencies will lead to a redistribution of commission in favour of agents? writes Jim Alexander from PropertyTime Mossel Bay and Garden Route.
All of a sudden the ‘industry’ has woken up!!
There is nothing new or even enlightening in this front-page article (‘Covid-19 the game changer for real estate’).
At last, the value of using tactics like, show houses, walk-ins, neighbourhood drives, pamphlet hand-outs etc are all being questioned. Really?
Forgive my cynicism. Those tactics have been obsolete since before the virus.
There is much more to ‘working from home’ than just working from home. During lockdown, we were forced to do it and it was a very artificial set of circumstances. Adjusting to that way of life permanently can be incredibly challenging, and it’s not for everyone. Many people do not have the self-discipline, technological know-how or facilities to work effectively.
Another aspect of such a dynamic not covered in the article is that of commission distribution. While working from home might reduce agent costs, the major saving will accrue to the agencies. Surely agency cost reductions must lead to a redistribution of commission in favour of the agent?
The lockdown hit the real estate industry hard and left thousands of estate agents with little or no income. Could the real estate regulator have done more to show support? Many estate agents felt left out in the cold.
The EAAB was missing the action even before the new CEO made all her promises to fix the establishment and its problems.
I wonder if we had to disappear, like the EAAB did when COVID 19 hit us, what would have happened to our businesses and staff we employ? You just have to be on social media to see the frustration of the industry as a whole.
The EAAB showed zero compassion towards their clients (estate agents) during this COVID 19 lockdown….in other words they did nothing to HELP us.
Daily operational tasks for example to match a payment on a bank statement with an account on their system – they can’t even do that!
As an estate agent with 14 years experience, I don’t feel represented by my regulative body (EAAB) at all. I feel left out in the COLD trying to survive on my own with the added stress of the audits that needs to be in by the end of June 2020 and the CPD that I paid for but can’t use to further my skills.
This is a 2020 HORROR story featuring the EAAB and its CEO clearly not giving a damn about the real estate industry at all.
All we can say is thank you to REBOSA & newly formed NPPC for keeping us informed and for trying to get us working ASAP. We salute your efforts and appreciate your intervention in representing us. All of us!
The EAAB is not interested in the property industry and it shows through their responses that they have communicated so far. It says nothing that we don’t know already and says more about why they won’t work from their offices anytime soon than how they are HELPING the estate agents through these tough times.
They are probably on full salary in these times? So why would they even bother?
Anyhow, now I feel better that I got a real chance of voicing my frustrations on ground level.
It is evident that the EAAB is far removed from what is actually happening on the ground. And that is a fact!
It is actually to impossible to gauge the level of service being delivered as it is so dismal that it does not reach a level. I am of belief that the easiest way for this to be turned around is for the EAAB to invest in a world-class online system. The main issue we sit with is caused by them attempting to deliver online with a system not designed to be able to deliver. There are many online businesses that run a pure online system from registering, ordering, paying and delivering. This is not a new invention that requires years of research. Their first point of transformation should be transforming themselves to be able to deliver to an industry that has for too many years just put up with bad service. Less time spent on issuing long and convoluted emails explaining why they cannot and more time actually doing. COVID-19 is the best excuse that has come along for now they have an actual “reality” that we all have witnessed. If they had done the investment on the infrastructure and ensured we had a world-class online system, the agents would have been able to function regardless of them being in office or not!
I would like to know who in the real estate industry ever thought for one second the EAAB is there to support, educate and uphold the needs of the industry?
Nonsense – The EAAB is a public service and serves the general public NOT estate agents / agencies – if a member of the public feels done in by an agency or an estate agent for that matter, they log a complaint to EAAB and within 24 hours that agency/estate agent has a mail in their inbox requiring an explanation with proof of their version of events or face a hearing…. what does this tell you?
The sooner the industry sets up it’s own regulator and/or body to support the needs of industry the better with a fund for agents who are in need of financial assistance whether in food vouchers or airtime, or medical expenses the better.
I always read and enjoy your publication to keep abreast on the property industry.
I have never received my CPD renewal notification this year from the EAAB.
A fellow principal (in fact many) also never received there notifications.
I sent about 2 emails to the CPD department asking them what the situation is, and to my surprise I have till date never received any reaction from anybody.
I had done already about 8 years rolling CPD courses through the years but the service of the EAAB is getting worse by the year.
Not even mentioning presenters not even turning up last year for CPD presentations in Port Elizabeth.
Does somebody maybe have any advice or help on what I can do in my situation?
It is the VISION or IDEAL the EAAB is seeking to attain and we, as property practitioners, should wish them success in this endeavor.
The EAAB is not there for the benefit of property practitioners. Its purpose is to regulate property practitioners in serving the public interest by restricting and imposing on property practitioners in terms of legislation.
The Institute of Estate Agents is a professional body serving the interests of property practitioners and interacts on their behalf with the EAAB
REBOSA is a body serving the interests of estate agencies (in effect the larger
agencies) and interacts on their behalf with the EAAB.
The EAAB controls the industry via legislation, we are merely one of several stakeholders.
Should the Estate Agency Affairs Board (EAAB) have been held responsible for settling the legal costs in the ‘No FFC no commission’ appeal? This would be fair in the opinion of some as the legislator is responsible for not issuing the correct FFC timeously to Signature Realty.
How will this ruling apply to the provisions of the new Property Practitioners bill?
In this case the dispute was between the 2 agencies, where the second one would end up paying costs and the EAAB, who is the actual party at fault, walks away without any costs order. As this resulted from the board not doing what it needs to, I feel that the costs order should have been paid by the board for both parties.
This is a great victory for estate agents and now we don’t have to rely on the incompetence of the EAAB in the issuing of our FFC’s after we have paid and followed the correct procedures. The EAAB has been failing to issue legit FFC’s for many, many years and caused so much grief and tears and even loss of earnings for legit estate agents trying to make a honest living. GREAT VICTORY and what a waste of money in legal fees that I am sure government will have to pay – persons responsible at the EAAB need to answer.
I agree. The EAAB should gave paid the costs. Once again, they walk away scot-free. Their incompetence is mind-boggling. Especially when an agent/agency has complied with all the requirements towards their FFC, and the board has not reacted. Forcing the agent into a vulnerable situation.
Well done to all concerned, you did a great service to the industry as a whole. It is just a pity that the EAAB, who is ultimately responsible for the fiasco, isn’t penalized from their personal funds. Atlantic Seaboard Realty, who in my view tried to unfairly take advantage of a fellow agent’s predicament, will find they have lost credibility way beyond what they initially hoped to gain. Good luck with recovering from that.
‘It feels as though the entire EAAB is down with an infection – no action’ writes Arthur Mills, principal Augmentis, regarding his frustration with resolving his CPD and FFC payment updates.
I paid mine before the lockdown started. The lockdown is an ideal opportunity to get stuck into the CPD e-learning questionnaires/tests.
I have been and am still being prevented from accessing these questionnaires/tests because “the system” has not been updated with my payment and I am told I cannot proceed unless I have paid. For the past two months, I have been emailing EAAB to rectify this status and although I receive acknowledgement of those requests, NOTHING HAS CHANGED.
I am exasperated. It feels as though the entire EAAB is down with an infection – no action and this is not the only matter outstanding; for a full year and a half, I have been trying to get my FFC sorted out and again, I do exactly what is requested and when it is requested, but there is no change in status – it’s as though all my requests and submissions via email and telephone go into a deep and dark hole.
What is one to do?
Security estates in many areas have apparently been indicating that they will continue to refuse access to anyone other than residents or emergency contractors. David Dewar, director of Thomson Wilks Attorneys, Notaries and Conveyancers responds.
The estates have to allow access as visitations are allowed under the lockdown regulations so therefore no laws nor regulations are broken by property viewings.
Worst case scenario, residents can take the matter to court, but one letter of demand to the chairman of the body corporate or home-owners association should set the matter right. The letter must be addressed to the chairman, however, and not to the security company as they will be taking their instruction from the estate governing body.
Cool heads need to prevail or the rental market will be in serious trouble due to the high increase in the number of tenants unable to pay rental partially or in full raises writes Ian Badenhorst, owner Dominicum Properties.
As much as we as estate agents regret the effects that the Covid-19 virus and the lockdown had on all South African citizens – the effect has also made a significant impact on the ability of many tenants to continue to pay for and afford their lifestyle, given that many lost their income and/or job, and face a bleak future which may last several years while the economy recovers.
Those that cannot afford their own property and rely on rental options for their housing needs, is likely to grow in number even when affordability becomes an issue.
The courts are expected to be lenient towards supporting tenants and their plight to have a place to stay while being without a job and income to survive. The courts have in some instances already given their views to this question and from a social point of view, orders and judgments will most likely be set aside “sine die” and evictions will not take place until there is benefit of employment and affordability present in any tenants’ contract.
If any default on the payment of rentals on the basis of not having any or not enough income, will be allowed, this will cost the rental market and will be a put off from interest in investing in rental property somewhat.
This puts the question of how willing property investors will be to continue with an investment property without assurance or protection on rental payments to cover the cost of purchase. Estate agents will also face the possible reduction of income out of rental management of lease agreements when rentals are not paid. This spells trouble to agents and their earnings.
Another aspect is the payment of levies, payable by owners of sectional title schemes and many other forms of community schemes who rely on the levy income so as to be able to provide the services most needed for all the owners and residents within the community scheme.
There is thus the possibility of further collapse of this select section of the property market, which has been the most active in providing lower cost residential housing to the growing housing market. Without stability within the property sector, how is any form of recovery within the depressed economy expected to become a reality?
What is to be understood is that the economy is reliant of the obligation to pay for what you consume or take as a service or a benefit as part of a business transaction. Any default is seen as a damage in one area, which then impacts other areas that are also affected and becomes damaged as well. The negative impact will worsen if non-payment becomes the culture – this will happen after lockdown should the courts follow their hearts as opposed to their heads. The courts should adhere to legislation and not interfere in independent contracts between parties. If they don’t, this will lead to the collapse of personal rights and the cornerstone of civil law.
Thank you for your open letter EAAB CEO Mamodupi Mohlala – please also follow-up on the lack of e-learning CPD courses, as there currently aren’t any, and the lack of response to CPD and FFC payments and queries …
I must applaud your well-articulated response, Mme wa Rona, I personally feel much more relieved to have heard directly from you, especially where you make reference and emphasis to the need to protect human life without apology and compromise.
I wish to also state that I have had issues with my FFC for sometime now (despite having paid and sent proof of such through the web and I have colleagues who can also attest to suffering same). I think the much-needed response is in relation to systems and mechanisms for estate agents’ Covid relief funds of some sort or form.
It may appear as rather unfortunate, unpleasant or unfair to place all our anxieties and frustrations on your doorstep, but we do this because you are our point of reference (Re bana ba hao). Please help find ways to improve the efficiency of your subordinates such that we could avoid knocking directly on your door.
Aluta Continua, Serame
It is high time that you as the CEO of the EAAB, stop defending your continued incompetence!
- FFC’s are supposed to have been issued by the end of 2019, it is May 2020 and if you, as you stated in your reply, are still busy issuing FFC’s, then you have failed in one of your primary responsibilities! Accept responsibility for your incompetence!
- You have not answered one of the queries from Mr Le Roux, i.e. why during lockdown, you sent out emails of demand for so called outstanding money, with threatening action if not paid within 10 days. In my case a total BS outstanding amount as I do not owe the EAAB 1 cent! I immediately answered your threatening email, but as per standard operating procedure for the EAAB, I have never received any explanation or apology from you or your staff that submitted the emails in error in the first place! I still await your explanation in this regard as you seem to have chosen to ignore this issue in your response to Mr Le Roux! Accept responsibility for your incompetence!
- The fact that you are not prepared to waiver all CPD fees for 2020, explains a lot about the EAAB. We, the agents are paying CPD fees, not to cover the cost of the CPD program, but to continue financing your glorious gravy train that you are operating at the EAAB! If this is not the case, then please explain why you require the ludicrous amount of over R80 million (40000 agents X R2000) to run a simple CPD program which I could run for less than R5 million? It is time you stopped this gravy train and operated the CPD program on e-learning alone and cut the CPD fees down to R500/agent which will give you R20 million to run the program, which I think is still excessive!
Thank you for your response Madam. However, I, as I am sure are many principals and agents, have been waiting for our “CPD plan 2020” to:
- Be shown as paid – which mine was in January and to date, whilst using the correct portal and then liaising with someone on email am still waiting for my R2500 to reflect as paid – so that we can register for now all online events we are nearly half way through the year and come 2021 the EAAB will announce that no FFC’s will be issued to those who have not completed 2020 CPD… I suppose
- Getting letters of demand (without a previous invoice) for only you would know to the tune of R12 000 my queries have gone unanswered by the souls that sent this to me twice. Send me an invoice please – all my Trust Audits are up to date and the interest earned paid up to and including 2019 audit… 2020 is still in progress so what indeed could your team be wanting R12 000 for?
MIA ... yes madam you have been and your staff have NOT been performing.
As if the lockdown is not bad enough for estate agents, we also struggle with a regulator that is completely unresponsive.
The Online Query facility is not working and has not worked during the complete lockdown up to date. The email address supplied for CPD points enquiries is faulty: email@example.com
The e-Learning facility is still not available. This means that estate agents could not use this lockdown period to complete their CPD points for the year.
Excellent response ‘EAAB CEO Mamodupi Mohlala‘ as a registered principal agent and active operator in the property sector I applaud your professional response. I have constantly perused the EAAB website and can attest to all the points you have so professionally iterated upon. Yes, it is certainly trying times for us all, no one person or entity is immune to the current catastrophic circumstances we find ourselves faced with.
As a responsible citizen and operator in the property sector, as much as we are all faced with the financial constraints and economic backlash being unable to do business as usual, I do comprehend and agree with the measures put in place by our ‘Excellency Honourable President Cyril Ramaphosa’ under the advice of the Covid-19 Command Council in an effort to curb the spread of the coronavirus.
Furthermore, I appreciate all the work, planning and effort that your team together with your leadership have gone through, to ensure the wheels of the property industry keeps on turning. Your consideration to accommodate, motivate and provide extension relief on the submissions of the normal annual ‘CPD, AUDIT SUBMISSIONS AND FFC RENEWALS’ that we agents and principals are mandated to adhere too, relevant to our legal status in the industry, is appreciated.
As an independent operator with a small office, the current financial constraints are challenging. Prior to the ‘coronavirus’ our markets were already flattened and running out of steam with the poor economic state of affairs in our country and high unemployment. However the hurdles and challenges, I do believe that the tide will change, our current circumstances, we find ourselves in, will run its course and we will again rise and thrive. We will do this keeping in mind this pandemic that has made the whole world see the light, lessons learnt for sure.
Keep up the good work, together we will all certainly overcome adversity.
How can the selling of motor vehicles and gardening appliances be allowed during lockdown ahead of real estate services? Our government needs to understand that in real estate we don’t only sell property, there is far more to our industry than that, writes Bruce Campbell from Natal Property.
I commend Jan Le Roux and all the other stakeholders including the newly formulated NPPC for their continuous efforts in trying to convince the government to open up real estate in level 4 of this unfortunate lockdown. Our industry is under severe financial pressure, our agents are in dire straits financially, and many other related businesses such as conveyancers, and not forgetting many sellers, are also hugely affected.
I cannot comprehend how the selling of motor vehicles can be allowed ahead of selling of property, and that garden services are allowed before real estate. My agency manages over 700 rental properties and about 140 body corporates around our city. We have had endless issues trying to communicate with owners and tenants from our homes regarding payment and non-payment of rentals, services accounts, levy payments, insurance claims and related issues.
Our government also needs to understand that in real estate we don’t only sell property, there is far more to our industry than just that. I believe that it is time for them to allow us to return to work under certain restrictions that have already been suggested by our representative bodies, otherwise our industry and many businesses will eventually be forced to close down, resulting in a further loss of jobs.
The lockdown has had a devastating impact on the rental market. One of the issues raised is whether landlords and/or rental agents may refuse early termination of a lease agreement from a tenant that is unable to continue paying rent due to loss of income due to the lockdown. Jacqui Savage, national rentals manager for the Rawson Property Group responds.
During this time we have seen large numbers of landlords accommodating their tenants with regards to their financial position. The Consumer Protection Act (CPA) clearly states a tenant may cancel their lease agreement with 20 business days’ notice, so a landlord may not prohibit a tenant from cancelling a lease agreement.
Ubuntu comes into effect here, where the situations of each party need to be considered. Lots of people have lost their income or had decreases to their salary during these difficult times and each party to the lease agreement needs to ensure that they are considerate and understanding to these circumstances.
There are documents in place to assist tenants in financial situations during this time and it is crucial for all parties to discuss a way forward.
The most important advice I can offer at this time is that the line of communication between all parties must remain open and honest. We are in this together and we will get through these difficult times.
Estate agents are pleading to be allowed to work. Thousands of property professionals remain excluded from the ‘essential or permitted services’ allowed to operate during lockdown Level 4 – with no indication of the duration of this state that could mean months of no income.
I believe sales agents should come together to bring a mass petition to the EAAB for relief funding. The industry brings billions in tax towards state coffers annually. The EAAB can lobby government on our behalf if they are unable to offer any financial assistance from the Fidelity Fund.
It’s outrageous that the EAAB has completely neglected to reach out to its members during this unprecedented pandemic. There are many agents who have no sales in the pipeline due to sales being cancelled and delayed indefinitely, many bonds not being granted due to applicants losing jobs, having salary cuts etc.
The simple fact is that we will remain in lockdown until level 2, with no way of knowing when that will be. Add to that the depressed economic market we as real estate practitioners will be entering once we are allowed to go back to work, it most likely will result in any potential income we are able to earn, taking possibly at least 6 months from now, to reach us. 99% of sales agents will NOT survive staying in this industry if faced with this scenario, which is definitely not an unrealistic estimation of how long it will take for any bucks to reach our bank accounts.
The reality is that by the time we do get to close our first sale after lockdown, we will be so deep in debt due to NOT having been able to stay on top of our monthly expenses that it could take us years to recover if we don’t go after some kind of financial aid NOW.
I suggest that we NOT wait any longer for the EAAB, Rebosa, our agencies or government to reach out to us with a plan, we may just end up waiting in vain. We are just as entitled to financial aid as any other tax paying worker in South Africa, but we have been completely overlooked – blocked – shut off from benefiting from any offerings of MEANINGFUL financial aid/relief. SPEAK OUT! TAKE ACTION! COLLABORATE! Estate agents need to UNITE to save ourselves, each other and our dependents, let’s be that VOICE that speaks out to protect our hard earned careers and incomes.
Email me at firstname.lastname@example.org Send me your suggestions as to how you think we can make this happen quickly and what skills you can contribute to petition the EAAB and/or government. Thank you.
Many agents don’t do sales and rely on their rentals for monthly payments and commission. Many are single parents that have children to feed and bills to pay. Us rental agents need to live and work and support our families. Please, please let us work.
The Deeds Offices should have stayed opened at the beginning of lockdown to finalise transactions that were there at the time. The Deeds Offices will receive very few deals in the next month/ 6 weeks as property brokers cannot even show a property. I do not believe that government understands how pivotal the property industry is in this country. A property broker creates so much employment ie in banks, mortgage originators, attorneys, insurance, assurance, plumbers, electricians, locksmiths etc, etc.
Dear NPPC, we look towards your guidance and unwavering pressure on government to allow us to operate during Level 4. As a principal of a real estate firm, I have tried to reduce company expenses to assist agents financially to at least put food on the table, but banks are slow to assist. Please help us get back to work, we need to stay relevant in the property sector and get the industry and related industries to generate much needed income.
As a matter of urgency, we as estate agents would like to know how must we survive in this industry if we are commission-earners only. We are a business in business and nobody has even given us a thought. We also need to buy food and pay bills. Also, there are some of us that also need to feed our families.
We pay loads of money to the Estate Agency Affairs Board for CPD points and Fidelity Fund Certificates. We are professionals that have been neglected all these years by the EAAB.
I operate an agency in a coastal town where political problems such as “illegal” land grabs (tolerated by the police and DA municipality) have contributed to sales dropping by over 60% in the past 2 years. One of my few sales was due for transfer during April with the seller, tenant and buyer agreeing that the tenant would be able to move on 30 April. Now the seller says “I can’t pay the levies for May”, the tenant says “If I can’t move I am not going to pay any occupational rent” and the buyer says “Where the h….. do I go? I don’t have a place to stay“. My debit orders are bouncing today, and all I can say is “What did you expect?”.
What is worse, placing our economy at risk financially or allowing people in the high-risk areas to be affected by close contact which is unavoidable. The heart of the matter does not make sense!! I understand that all environments need to be prepared to combat this virus, hence the 6 weeks we have had should have been ample time for this. We are all human, and the more income, the more the whole of SA thrives. All industry plus real estate in this environment should be allowed to operate post-haste as long as social distancing happens. The financial support the South Africans have given out to help towards the elimination of this corona virus is phenomenal and the less we work, the less we support!!!
I am a single parent with 4 kids and 2 in varsity with no assistance at all from any institution. So really, I have fees to pay, food to put on the table, data for assignments as tertiary education is being conducted online. I solely depend on selling property and nothing else. There has never been such a traumatic moment in my life … government needs to rethink.
The real estate sector broadly welcomes the new representative body for the sector, the National Property Professional Council (NPPC). Graham Lawrence hopes the professional bodies will in future also be laying down and enforcing the ‘house rules’ for the industry
Graham Lawrence wrote: Much appreciation for your magazine and keeping us informed.
Suffice for me to say that to qualify oneself was a difficult and expensive exercise. To see our industry improving and becoming much more professional makes me proud to be a “professional property practitioner”.
However, we still have others who get away with unscrupulous conduct and illegal involvement in transactions. The time has come for all our professional bodies to lay down certain house rules if we are to be respected in the industry. The law needs to be applied to the letter.
Question: Do the professional bodies have any legal capacity to act and to address matters?
Property developer Reinier van Loggerenberg, managing director Craft Homes, pleads for the re-introduction the VAT Act as this will bring significant cash flow relief to property developers.
Our brave President’s new economic plan has found favour with many South Africans and its businesses affected by COVID-19. I personally commend his efforts to bring about fundamental change to the economy and create greater equality for all, especially in these trying times. I will most certainly be doing my best to contribute to our national effort to protect, restore and build this great nation.
As a property developer we harness the uncertainty and unknown by reflecting on the situation collectively; Utilizing existing knowledge and bring about change through constructive dialog. The uncertainty in the market conditions during and post Covid-19, dominates these discussions and certainly has the potential to repeat the 2008 residential market crash. Will the recent consecutive reduction in the interest rate be enough to stimulate the market? or, will the consequences of the adverse market and economic conditions push prospective buyers into the rental market? Let’s not wait in vain for a Cassandra figure, let us bring about effective policy change.
Section 18B of the Value-Added Tax Act, 1991 (the “VAT Act”) ,was introduced early in 2012, this legislation brought about significant cash flow relief for residential developers by allowing them to temporarily let their residential units (held for sale) for a period of up to 36 months before the VAT under the change in use provisions became payable. However, it was only short-lived relief as the cessation of relief under section 18B of the same act, was enforced in January of 2018 triggering an immediate VAT liability on the open market value of all unsold residential properties temporarily let.
Reintroducing Section 18B will bring about significant cash flow relief for property developers who in turn will through further investment stimulate the residential property market, a pillar for the new South African economy. Let us bring about effective policy change for a better future. Add your voice by joining the discussion.
There continues to be difference of opinion as to whether trustees may make rules that permit use of the common area in a sectional title development, or put another way, whether the police is wrong to assume restrictions about walking dogs in public also applies to the use of the ST common area.
In response to ‘Sectional title schemes aren’t exempt from lockdown rules’:
Graham Paddock, writing in the Daily Maverick, states that: “the regulations in regard to the restriction of movement do not apply to private property as found in any gated village, only to places or premises normally open to the public”. He goes on to say that: “As the regulations stand, I consider the SAPS opinion to be wrong … If the minister wishes to deal specifically with restricting resident movement in the private property in community schemes, she can amend the regulations to do so”.
Commenting on the article mentioned above, Brian Edwards (a non-practicing attorney) concurs: “the way the Minister of Police and some police leaders have pronounced is not in my opinion binding – only their personal opinion. The regulations, as I read them, say only we are confined to our “place of residence” – there is no definition of the term in the regulations. Apparently ministers have the right to issue clarifying “directives” and I have found no evidence of one in this case”.
“In sectional title, you own a section and a share of common property, for residential purposes. This means that owners can use common property for access and recreation. And under the Sectional Titles Schemes Management Act trustees are not entitled to make rules confining owners to their sections” (Graham Paddock).
Based on the above, unless a minister has issued a “clarifying directive”, residents in a sectional titles scheme may legally continue to use the common property and trustees may not make rules to prevent this.
Many property professionals, buyers and sellers voiced great support for the appeal that government declare the Deeds Office an essential service as it would give financial relief to thousands – but some felt exceptions shouldn’t be made.
I cannot agree more with the article on the opening of the Deeds Office.
I have commented on Maroela Media regarding all the attention given to entertainers who lost their concerts and gigs. The gist of my letter was that the estate agents are much worse off because even after the lockdown we will still have no money while the entertainment guys will get paid immediately. I only wanted to draw attention to the section of society who is dependent on many institutions in order to earn a living which are now closed.
We will at best only start to receive commissions 2 months after the lockdown is lifted.
I hope the request is considered in a very serious light because it will influence many peoples’ lives.
Agreed, why can’t the Deeds Office accept the latest property municipal accounts, which are supposed to be up to date – for rates & services clearance figures – which is available electronically immediately.
(1) The conveyancing attorneys requests the rates clearance of that/the latest amount x 4 in any event.
(2) Then the banks can also accept the property owner’s latest bank bond statement – electronically, with no intervention of any human, juggling figures. In any event, the whole property-transfer-process is going to be digitalised soon.
(3) Proof of payment to SARS from the conveyancers should be sufficient to conclude a property transaction.
(4) Accepting the fact that there will be some glitches in terms of metre-readings, etc. which in any event are minor issues and those transactions can be dealt with differently.
I fully support the idea that the real estate agency industry should be declared as an essential service.
For 22 years being in the real estate industry, I have depended on a commission-based salary. Now with the lockdown, I have already gone down due to these registration delays.
I cannot imagine property practitioners, that joined recently, how they will survive for the next coming months. Some of their first sales are not being attended to and all prospective leads are going to disappear just like that. It takes a turnaround of about 6 months to achieve the first successful transaction deal to get your first commission.
I have paid bond registration and transfer costs in February 1st week. Currently I am renting a room with my child and the living conditions are extremely poor. I fully understand the lockdown regulations, but the Deeds Office should function. As a buyer this has put us under a lot of stress.
If you open up the estate agency business, as is now requested, you can just as well cancel all Covid-19 regulations. Everyone thinks his situation has merit, where do we stop?
The lockdown is affecting everybody and not just real estate agents and conveyancing attorneys. Many of us have small businesses that employ several people. I do not see why exceptions should be made for this sector while the rest of us also suffer financially while our businesses are closed. We are all eager to finalize projects that we started before lockdown.
Why can’t the Estate Agency Affairs Board (EAAB) set aside some of the funds collected from fees for Continuous Professional Development (CPD) training to assist estate agents during lockdown?
I would really appreciate if the following question could be considered and published - a question which I didn't notice asked or mentioned on Speakers Corner (which is insightful) is that of CPD points.
As agents, we are required to contribute an annual fee towards this initiative. Most of my colleagues and real estate agents / people I ask, don't even know what the purpose is or what these funds are used for?
I would be interested to hear an opinion as to why some of these funds couldn’t be set aside to assist estate agents during this time, in lieu of UIF?
The EAAB argues that the CPD fees are raised to cover costs … I of course don’t agree but the Act empowers them to do stuff like this to raise funds. Please look at their annual report for the last year, you can find it under PUBLICATIONS on eaab.org.za.
They seem not to have money to spare and if they did the Act does not allow them to support estate agents in tough times. They can at best discount CPD fees. We asked and they refused.
(Editor’s note: The EAAB was also asked to comment on this matter. No response was received.)
I have been an estate agent for many years but never contributed to the Unemployment Insurance Fund (UIF). Can I look towards the Estate Agency Affairs Board (EAAB) for financial assistance? Jan le Roux, CE of Rebosa explains why not.
I am an estate agent for the past 25 years. As is the norm we agents don’t even contribute to the Unemployment Insurance Fund (UIF). With the Covid-19 pandemic we are basically unemployed and obviously not earning monies. What can the EAAB do to assist agents that are feeling the pinch of this shutdown? In my opinion we as agents should at least be registered to pay UIF and in times like this we should also be allowed to claim for temporary unemployment. I know the argument will be that we are independent contractors, but this does not mean we have to always sustain ourselves.
The EAAB has over time collected our FFC registrations and I’m sure they have funds to assist agents. In the future after the pandemic, I can see there will be quite a number that will be out of this business.
Your input is vital.
Agents should be contributing to UIF in terms of the law. Normally, one cannot claim when you are employed, but because of the unusual circumstances created by the lockdown, the UIF and the Department of Employment and Labour have launched the new Covid-19 temporary relief scheme. This scheme will provide relief to businesses in distress and unable to pay their employees’ salaries.
The EAAB does not have the funds nor the authority to pay estate agents any income. The objects of the EAAB are to maintain and promote the standard of conduct of estate agents and to regulate the activities of estate agents - that is it.
What about people who are supposed to move into a new property after 26 March and are afraid they will have to pay rent for both their current and new property if they can’t move during the lockdown?
When it becomes impossible to perform in terms of the terms of an agreement, then the party who cannot perform will be excused from performing, and, as such, a failure to perform will not amount to breach of contract. This is called supervening impossibility. In order for a situation to fall under the doctrine of supervening impossibility, performance must be objectively impossible, and not merely difficult; if a specific person cannot perform but another person notionally could, then it will not be a situation of supervening impossibility.
The lockdown in response to the COVID-19 pandemic is what is in Latin called vis major. It is an unforeseen event beyond any person’s control which could not be prevented. It results in performance of certain obligations in terms of some agreements becoming impossible.
One example of a supervening impossibility is a tenant who is due to move into a property during the lockdown. Such a move is prohibited. Therefore the tenant cannot be held liable for a failure to move in as was agreed. Depending on the duration of the lease and the lockdown respectively, the whole lease may be void, or otherwise the tenant will be entitled to remission of rental for the period that it did not have beneficial use of the property.
In short, if these people can’t move into the new property, the landlord will not be able to enforce the terms of the lease. This is an example of vis major releasing a party from its obligations
The country’s biggest property portal recently announced their annual subscription price increase – a matter that evoked a lot of response from estate agents.
With reference to my previous articles on the P24 ‘leads’ charges, I did as I said and pulled all of my listings from their portal. When will the rest of you follow suit instead of moaning?
Both JP Farinha and Charles Scott are experts at spin. Note this comment above… “…we align our costs with value created,”. What value is created when people ‘apparently’ click to open an email address or see a cell number, but never, never make any contact?
I asked P24 this question some time back. Charles’ response was to inform me that I should remove my listings. I already had. When will the rest of you follow me?
Totally agree. Hopefully a new portal will kick them out of the market in the not too distant future. They seem arrogant about their decision, their service poor. Time for decisions and if our agents, together, decide to stop advertising on their portal, they will have to go back to the table and sharpen their arrogant pencil.
It is ridiculous to increase prices so drastically. Us smaller agencies are really struggling to keep head above water. Bring back the system you had before, with every registered deal you take a certain percentage. That worked out much better for us.
Have you maybe taken the time to sit down and negotiate your pricing, terms etc? We did and we are getting a better service at a better price with additional add-ons. We also get way more leads, to be fair negotiate first and then relook at things before commenting. Speak to Robyn she sorted us out in less than 2 days and we are extremely happy.
1) As long as expropriation of property is not defined, there is no legal basis why government can’t claim more than land and buildings, so there is reason to be concerned writes Ian Badenhorst.
In respect to the comments of Terrence Corrigan, I am of the opinion that the comment can be considered a strong possibility. The perception among the previously disadvantaged persons in South Africa, including those from Zimbabwe and other northern regions of Africa, who are now either holding some form of temporary residency or holding a refugee status, are that they qualify for government grants, housing and the same old promises the ANC gave to all those supporters leading up to the first general election at which the ANC took over government.
The promise was free housing, free services, cars and appliances which township residents were said to be deprived of.
Note that the term property is not defined as land and buildings so expropriation can be anything and everything that the government wants to take.
They are already starting with pensions and forcing banks to lend money to collapsing SOE’s who, if allowed to continue, will wipe those assets, pension funds and banks into extinction.
Where is the building of wealth and creation of employment being advocated by government? It is all a bunch of smoke blowing up the backside of international players waiting to reap the benefit of taking all the cream of the economy and its investment once the economy goes into final meltdown.
On the point of the EAAB and CPD. The annual fee paid for CPD should be in keeping with the cost to provide local training to all agents. The training presented at regional venues several times within each year should meet the needs of each category of agent who is in business
The training is not focused on the professional field of an agent, for example, those specifically dealing with sales or those specifically dealing with rentals and those specifically dealing with sectional title services to body corporates.
I am a sectional title specialist and take appointments from the court on the administration of a body corporate in distress.
As a qualified insolvency practitioner, I can compare this as being similar to that of business rescue but under different conditions, rules and processes under the Sectional Title Schemes Management Act.
I cannot see any reason how my activity is requiring me to travel at my cost outside my region to attend training, and, at a further cost to myself to attend training in performing functions that I am not performing or practicing in this profession.
2) With regards to the new SPLUMA legislation, Andrew Walters asked what happens with agricultural properties that don’t have approved building plans.
Hi, we deal predominantly with country properties, plots and farms. Many of these properties do not have approved building plans due to the slack enforcement in the recent as well as the historical past.
In some instances, municipalities have had incidents where plans were destroyed by fire etc or just simply lost.
It appears as if SPLUMA will mean that the owners, when they want to sell, will have to have plans drawn up despite that it is not their fault?
Hi Andrew, as stated, much depends on what municipality the property falls under and what by-laws are adopted there.
If providing such a certificate is a requirement and it turns out that there are not valid building plans, then unfortunately yes, the owners would need to have plans drawn up.
Where the lack of valid plans is due to the municipality having lost the file or a third party cause then it may, and I say this very hesitantly, may, be possible to claim the costs of the plans from those parties, but it would still mean the owner would have to pay to have the plans drawn up in the first place in order to get the certificate.
The Institute of Race Relations’ Terrance Corrigan says there is no guarantee that any property will be exempt from expropriation without compensation (EWC). Some found his views subjective paranoia mongering while others thought it spot on. What do you think?
Terrance Corrigan’s view on EWC is absolutely contrived and mostly subjective paranoia mongering. I am surprised it was published.
Please get a lawyer to write a factual article that takes account of the draft legislation and the Constitution.
Put bluntly and correct. A big concern to me as a South African is:
Who will the land be given to? All the cronies and the ones with the biggest gang or guns. Surely a big risk. It is already a failure with all the corruption in our country and South Africa may end up a Zimbabwe or Venezuela and this can create anarchy and destruction. The majority of South Africans will become beggars. All the signs are there and we definitely may end up in civil war.
There must be another way to give people land as government does have most of the land. It is a wait and see.
Well, this is communism at work, which has never worked. The ideology is straight from communism. The State is the ultimate. The State owns everything, and the individual is given according to his/her need from ‘Das Kapital’ by Mr Karl Marx. Unfortunately, this has not worked in Russia or Cuba, and ends in poverty and more corruption. To be fair, it is easy to sell this to someone who is poor and wants more. Again, it is doomed for failure and individualism/entrepreneurship is killed in the process.
Expropriation without compensation remains an important issue that needs to be carefully resolved. What will happen to outstanding mortgages, farms and residential property are some of the concerns raised in response to “Why EWC remains a concern”.
My friend, if government pull this law through, they must pay the landowners’ bonds in full. This can be a dispute for years to come. The ANC sits with thousands of hectares of ground and all the RDP houses that they can register in the family’s name. Just allow that to happen. Don’t take farmers’ property! Assure with this action that they can succeed in farming and renovate their own house in new areas. You don’t take somebody’s farm and equipment, who plant plant food for the masses, and give it to a person for free. I can assure you that will bring war and hunger to our nation!
Yet again the big boys are not prepared to state the obvious. So I guess I will.
The ANC have deliberately fudged land reform for 26 years because their intent has always been to follow through with the ‘National Democratic Revolution’ (NDR) and take possession of all property.
The definition of the word ‘property’ in respect of the Act is all encompassing and includes cash on hand, bank accounts, pensions, equipment, land and improvements etc etc.
The ANC repeatedly tell us that productive farmland and food security are not at risk. Question, if that is the case, why does the Act not specify it?
The large corporate banks could get together and pressurize the ANC to change course yet they have not. Any thinking person would have to ask why not? One also needs to question either the intellect or the ethics of that leadership.
The same can be said about the medical schemes’ almost silence on NHI, one could be forgiven for thinking backroom deals are afoot ensuring corporate wealth is unaffected. No such comfort for the average citizen. I say average citizen because this will damage everybody except the ‘elite’ chosen few.
It is clear for anybody with a functioning brain that the intention is to change the Constitution to allow EWC and thereafter nothing will stop them altering the Act to change the timetable and order of that expropriation.
All the time corporate SA sits back and says nothing. You have to ask, Why?
A further point that none of the big boys make is that if the ANC do not intend to touch residential property, then why is it simply not excluded from the Act?
Wake up and stop pussyfooting around and grow a spine before it is too late.
The EAAB says from 1 April black estate agents may apply for exemption on fees and time limits to meet regulatory educational requirements. Termed everything from reverse racism and a great injustice to black agents to a sensible way to make the industry more accessible to less fortunate individuals from previously disadvantaged (PDI) backgrounds, this plan has the industry talking.
Like all misguided bureaucrats the EAAB is doing a great injustice to PDI estate agents and creating a perception that agents of colour are inferior. The message to the market is that estate agents of colour are not at the same level as their white colleagues … and that is unfortunate because now CONSUMERs will keep them out of the market.
If the bureaucrats at the EAAB knew anything about this industry, they would create an elite training school for PDI agents so that the consumer would actually select PDI agents because they were perceived to be better.
Finally, TRUST is one of the most important factors in selecting an estate agent, and the EAAB is suggesting that a consumer should hand over a deposit to an agent who has not bothered to submit their trust account for audit?
Misaligned and absurd decision!
Apologies to my highly competent black agents who will be regarded as second-class because of their skin colour.
Audits cost a fortune, so why can’t we all be exempted?
We are 26 years into democracy and still one sector of the population is being treated with kids’ gloves. Give everyone the same opportunity. This opens the door for more unqualified persons to enter the industry. Just a question, who falls under PDI’s and how is this going to be controlled? Submitting bank statements is not sufficient proof because this will be encouraging more and more non-disclosure to fall within the limit. More fraud.
So tired of EVERYTHING being about the colour of your skin. I appreciate the history of our country is something we must never forget, but we will never move forward together as long as one race feels disadvantaged. Where’s the incentive to work hard to achieve anything anymore if it basically just gets handed to you on a silver platter.
Sorry that it affects you that way, but it’s really not on a silver platter. Our society in general is far from being transformed. This is not a political answer but it is the reality of people coming from households that survive on R3 500 or less a month. Then our industry expects that person to afford a car or taxi money to get to listings, airtime to call clients around, pocket money for marketing material, etc. So, when the EAAB says instead of two years, let’s extend the expectations for NQF qualifications to five years based on financial constraints that being previously disadvantaged comes with, it makes perfect sense to me. I was opposing it too before I got to fully read the facts. Seek to understand, engage with your black countrymen on a deeper level, you’ll realize that they don’t even have airtime to call around. Rather than taking offense of efforts to transform society, seek to understand. Being black myself, there was no way I could have been able to make it in the industry had I not first become an engineer. I’ve spoken to a lot of ambitious black people who took interest, attended training to start in the industry, but failed to kickstart due to initial cost. And I mean a lot of people, hey.
From a facilitator of real estate courses – training and education. From inception in July 2008 of the mandatory qualifications for all principals and agents in South Africa, it has been a privilege to take some 2 500 learners, from all backgrounds, along the learning path towards becoming qualified estate agents.
It has been a lot easier for some, but the majority of learners battle – not only with the workload required to be found competent and be certified – but with the expense.
This is not just about paying for the tuition, it’s about being able to sustain oneself for a lengthy period of time, to be able to ‘set the wheels in motion’ so as to be able to earn on a regular basis … and this in a commission-earning capacity is not mean feat.
Whatever it is the EAAB has in mind, with regards to assisting PDIs in be qualified and, it appears, assisting failed PDI businesses to fast-track to re-establishing their business, it is not going to be a ‘walk in the park’ … and it will have to comply with the present EAA Act and ‘soon to be’ PP Act.
So, before knocking the intention, let’s see how the EAAB intend implementing this! Just saying ….
As an operator in the property sector, I am 100% in favour of the PDI exemption coming into effect, opportunities should be afforded to all our citizens who are willing to work and contribute to the South African economy. ‘Working together we can grow and prosper’ making our country great in every aspect.
2) For managing agents to do continuing professional development (CPD) courses is like being a butcher but taking exams on plumbing writes Les Reynard.
I wish to throw a log on the fire.
I have been a managing agent for 36 years – I now have to do CPD and because I do not rent or sell property I have to learn all about it to keep my status as an estate agent (also waiting for my FFC having paid for it in July).
This is like being a butcher but having to learn about and take exams on plumbing – JUST TO BE ABLE TO WORK AS A BUTCHER.
In all the years I have done CPD there has only been about two programs on sectional title. When there is a road show, I take my budgets and work on them whilst the talk is on. There is absolutely nothing for me to learn on the videos or at the shows!
Two of my staff became estate agents – not because they had too, they thought it would be a good idea. The one year internship was a joke – as principal I have to sign all their reports – and I don’t know a thing about selling. My staff had to give copies of their adverts and copies of their contracts – what a joke.
1) Why is mass non-payment of CPD fees not a practical strategy to exert pressure on the Estate Agency Affairs Board (EAAB) to force them to improve their service delivery? Jan le Roux, chief executive of Rebosa weighs in on the matter.
Off course Rebosa shares the concerns of industry given the fiasco in respect of the issuing of FFC’s.
It is unfortunately not practical to promote the non-payment of fees for CPD, or FFCs, for that matter.
If the only penalty was a fine, one could pursue this option. Unfortunately the penalty is forfeiture of commission as the EAAB will not issue one’s FFC if you are not in compliance.
Once that is rectified you may still battle for months to get your FFC re-instated.
2) When did the EAAB become a money-making institution?
The Estate Agency Affairs Board (EAAB) was established in 1976 in terms of the Estate Agency Affairs Act, 112 of 1976 (‘the Act’), with the mandate to regulate and control certain activities of estate agents in the public interest; and for incidental matters.
So, the EAAB, being a government department, is a regulatory body established to protect the public at large against unscrupulous estate agents. Employees of the EAAB are government workers and as such are paid a government salary.
On 17 May 2012, the EAAB, after reporting to the Minister of Trade and Industry since its inception in 1976, was transferred to the Department of Human Settlements by proclamation of the then President of South Africa, Mr. Jacob Zuma.
In 2015, some 39 years after its inception, the EAAB introduced CPD (Continuing Professional Development) for all qualified estate agents in South Africa at R2 000 per annum per estate agent.
I doubt very much that the EAAB has the best interests of estate agents at heart or are genuinely concerned with the personal professional development of estate agents in South Africa and nor should they be. The EAAB is a regulatory government body and not a training academy and/or money-making institution, … or are they? Estate agents and estate agencies in South Africa managed just fine before the introduction of CPD.
Let’s say that there are 40,000 qualified estate agents in South Africa, multiply this by R2,000 = R80 Million per annum. Employees of the EAAB are paid their salaries by the government, so where does all this money go to? So, in 2015 the EAAB’s annual income was bolstered by approximately R80,000,000 per annum, going forward, quite a feat! Project this annual income forward over 10 years and it is a staggering amount of money.
Let’s not forget that each and every registered estate agent in South Africa also has to pay for their annual FFC each year too.
– Anonymous estate agent
1) Is the big brand office model on the way out in real estate in South Africa or not yet? Property practitioners argue in favour and against the office model in reaction to Weighing up: The office or work from home?
Whilst I can appreciate the benefits of working remotely; I prefer to work in an office environment. The structure of going to work at a certain time each morning, the routine it offers in our constantly changing day; the contact with colleagues and feeding off their energy are all great benefits. I also prefer setting a boundary between work and home.
We are all different and I am so fortunate to work in a real estate company which is flexible and embraces the needs of the agent. Whilst many more of my colleagues will be working from home – those who chose, remain office-based and there are quite a few. It’s up to the agent to choose. Thank you, Chas Everitt, for your flexible model which meets a variety of agents’ needs.
An interesting article. Whilst I support the flexibility that comes with being an agent, the importance of being informed and keeping abreast with changes, training, technology and legislation remains critical to an agent’s success. Agents are having to continuously reinvent themselves. Having the backing and togetherness that comes from a structured, positive working environment where staff share successes, problems, obstacles, etc goes a long way to creating a positive mindset, which in turn helps a salesperson to do better than they would on their own.
The choice to be more dependent on a brick & mortar office with a national brand does at present cost estate agents between 52% (company share) to about 30% (company share) of the commission earnings. In some instances, such office focussed brands charged fixed admin and desks fees of up to R6 500 per month – i.e. excluding any marketing costs.
The CCH virtual office system has been operational since 2006. Experience has taught us that the freedom to operate without any restrictive business model rules (no allocation of farming areas or compulsory office duties) does attract a more independent minded businessperson – someone who would like to earn up to 90% of the commission.
CCH strives to provide time consuming marketing services to our member agents for a fraction of the cost it would be should they be doing it on their own. This includes social media management, photographic including 3D model services, CRM system services, provision of marketing material through inhouse graphic designer etc…
Biweekly training meetings are hosted and every area has a variety of active Whatsapp groups through which agents communicate continuously with each other.
Real estate (sales) offices will undoubtably become less and smaller. The fact that big office based national brands only handle 30% [would the national brands agree with this percentage? Ed] of all transactions in South Africa clearly testify that office dependence is already a minority preference.
The fact that 50% [more correct to make this approximately 50% Ed.] of all estate agents in SA are intern estate agents (who are in need of a much more closely monitored management style) does however point to a continuance of our present dispensation – where at least a big proportion of newcomers will keep on joining the national brands for more structured training assistance and remain with them until they reach their “tipping point” and move on to business models which offer them much higher commission earning scales.
The future of real estate is virtual with remote offices to reduce operational costs. Critical in a highly competitive environment where agents command top commission splits. We are helping an increasing number of virtual agencies to launch at Entegral, including franchises that convert to independent status, thus saving on brick and mortal plus royalty fees. It is a no-brainer if you are focusing on the next generation of agents who are comfortable to work like that.
There are at least 4 trends that mitigate against the traditional office model.
- Rising rental costs
- Low cost, easy to use technology
- Younger agents who prefer technology over colleagues
- Virtual office space – rent by the hour.
When I walk into most agency offices, they are empty as they should be, assuming the agents are in territory. Mostly the only people there are the manager/owner and the receptionist.
Fixed offices are no longer a sustainable nor cost-effective option!
2) In response to ‘A heartfelt apology might have cut it, denial does not’ complaints from agents desperate to obtain their FFCs keep coming in. Here Elda Crous vents her frustration.
Your article was 100% correct and the long reply published by the CEO of the EAAB is a lie.
I had logged queries since April 2018 with the EAAB regarding our company’s FFC not being issued. My business partner (83 years at the time) resigned as a director and principal of the company in January 2018. He personally delivered his resignation from the EAAB to their offices.
I am compliant with all the EAAB requirements. I forwarded the official confirmation from CIPC that I am the only director of the company. My previous partner has also been removed as a signatory to our trust account.
When I log onto the EAAB website, a query logged on 30 October 2019 states: In progress (Carol Mauda). A follow-up query logged on 17 January 2020 states: Not Started (Carol Mauda).
I tried twice to call the EAAB on Monday 20 January 2020. Both times I was put on hold for more than 15 minutes. Eventually I just ended the calls. I took photos on my phone to prove the dialled EAAB number (0872853222) and the duration of the calls.
I check the website daily to check their progress. I have been without a company FFC certificate since 2018 but paid all my fees on time and submitted the auditor’s reports on time.
To me the EAAB is just another SOE milking hard-working businesspeople to enable fat cats to sit in cozy jobs doing nothing.
I appreciate you putting the effort in to bring this disgrace of an organisation’s ineptness to the surface.
I am beyond desperate and am glad I could vent my frustration to someone who understands.
Some agencies invite agents to join them with the promise that they will be able to run their own business without an NQF5. Can this be right that people are helped to operate a real estate company without the correct qualifications?
Without commenting on an offer made by any particular agency, it must be noted that it would be legal for a qualified principal to be registered with the EAAB as a principal in more than one estate agency.
Such a person can therefore offer to become the principal of the estate agency that belongs 100% to another person not so qualified. Even a candidate estate agent will be able to own an estate agency with the assistance of somebody qualified.
If this is done correctly it does not necessarily follow that the agency would then be run by somebody without the required qualifications.
Therein lies the catch though, as this principal will be responsible for the running of the agency as far as all compliance issues are concerned.
The new Act, when promulgated, will make this even more onerous to this “principal for rent“ as Section 64 (3) of the Property Practitioners Act stipulates that “In any proceedings in respect of sanctionable conduct, it is no defence that the principal property practitioner was not aware of the acts or omissions of the property practitioner or the candidate property practitioner.“
If the owner of such an estate agency happens to be a candidate estate agent, the "principal for rent”, of course, is responsible for supervision of the drafting of documentation as well.
1) Not only can’t estate agents trade legally without a new FFC, but the lack of a response to their emails and calls to the EAAB exacerbates their frustration. Many agents commented on ‘EAAB disappoints’ that they’ve paid their fees months ago but are still waiting for a response as well as their FFC.
We still have about 10 agents FFCs that are outstanding from the EAAB and has been queried with them and no response has been received.
All fine and dandy except you don’t get a tracking number from the EAAB that is needed when making a report to REBOSA. Thanks Jan for the help. We are still awaiting our FFC and are writing every two days to the EAAB without a response. We will be OK after the end of January because if they don’t respond the new act says that it is taken that you have been issued with a certificate. The EAAB is in shambles and should be disbanded. We are trying to create employment for new people, but it is impossible. The cost of joining and renewing with the EAAB is as much as one sale for many agents. The cost of training for the NQF4 is simply beyond the finances of most new agents. It is a crazy situation. Totally going in the wrong direction. We sent all our stuff on 30th October 2019 and to date have never been told why we have not been issued with our certificates. What a joke.
(Mike, the Act will only become effective after finalisation of the regulations, probably around June according to our information. In terms of the Act the EAAB will be obliged to issue but that does not mean it happens and may still leave you not "in possession". Best to persevere now. Ed.)
I paid 18 October … still waiting …
Thanks for the update and all your effort, Jan. It’s good to know that there is someone taking them on. Perhaps it’s time we considered a class action against them for depriving us of our livelihood through their incompetence. I did try the ‘complaints’ address provided but it seems to be incorrect or perhaps no longer operative. I would appreciate it if someone can tell me what the case may be.
(Hi Johan, I sent a test email to the same address and got a response the same day. Perhaps just check whether you used the correct email address: email@example.com)
We paid all the agents’ FFC on 8 October and uploaded it to the site. Logged a query on 13 October and followed up weekly on the phone. On Thursday 9 January, I sat on the phone listening to the recording to lodge three queries at a time (that’s the maximum they can assist with). This was then escalated to finance. Yesterday morning (16 January) I decided to fly from Durban to JHB. I went to the EAAB and within an hour had all the outstanding allocated with the cashier and this morning was able to download them all. Why does it take going there to sort this out this issue? So frustrating and expensive. I don’t see how an agent who is compliant and paid on time can be denied earning an income.
Self-regulating is the way to go because we will be able to monitor better. Question: I paid for my FFC on 6/10/2019. Up to today I have not even been issued an FFC, yet I have not received any explanation or response to logged queries. What happens to the interest on monies paid to the board and who is it due to? I support a own office for the Western Cape. Self-regulating yes.
2) Commenting on Jim Alexander’s complaint about a major property portal’s billing system for ‘leads’, John Fuller writes: There are continual complaints regarding “leads” as defined by the portals. One of the problems I have as a subscriber is that each time a property is listed, our competitors open the new listing to view the property, see who the agent is, check out the listing description and images, rate & taxes, levies, address, etc.
If you live in a small town as I do and my agency lists 50 new properties in a month and there are 100 estate agents in town, then each property is theoretically being “viewed” up to 100 times, and total monthly “views” are therefore 50 x 100 = 5000. And these “views” are without a potential buyer having “viewed” any of the properties!
Perhaps inquiries from all registered estate agents who list properties on each portal should be recognizable by the portal’s backend so that they are not included as “views”.
Jim Alexander, estate agent from Mossel Bay, writes that after his last letter of complaint (Speaker’s Corner) about Property24’s ‘charging for ‘leads’ which are no more than clicks’, he did as he promised and delisted all his properties from their portal. Except, he missed one …
It was an old listing outside of my normal territory. Entirely my fault!
So, how did I find out about it? Courtesy of P24 when in November they sent their October invoice stating that I had received 23 of these so-called ‘leads’- on one old listing.
Convinced there had to be some mistake or glitch, I went into my Agent Zone as I had done previously to see what types of ‘leads’ these were made up of, cell phone, emails or contact forms.
There was no longer any such report readily available – interesting!
On further investigation, I discovered that apparently my, ‘rights’ and that of all our other agents had been rescinded. They blamed our general manager (GM). Not even close to the truth.
(Some of you might have noticed quite a few features and other aspects of their site have changed over the past months.)
After numerous phone calls from myself and our GM to our relatively new account manager, she told me my rights had been re-established. However, I still could not find the previously available report. It’s no longer there and so I could not even check their stats against their invoice!
So next, our new account manager provided me with the steps to get the report….
- change my computer settings,
- download a comma delimited Excel
- do another couple of things and then I had my report.
- finally, I had to then filter to isolate my particular ‘leads’
What used to be simple is now complicated! Any more conspiracy theorists out there?
What I learned was that apparently there were 144 views of which 23 were ‘leads’, executed over a period of about three weeks on my single listing with not one sales enquiry. Quite incredible, me thinks.
So, armed with assurances in writing from previous altercations with them that they do not charge for duplicate ‘leads’, my next step was to request that they check for duplicates.
Well, well! Did that throw the proverbial pussy cat amongst the vultures?
First, our GM was told that P24 does not have the resources to go through endless lines on a spreadsheet to check every agent’s ‘leads’ individually as it is very time consuming. Then I was told they have an algorithm which identifies duplicates and deletes them. Which is it? And if there is an algorithm, please don’t ask for proof that it works!
P24 didn’t say as much, but why would I NOT get the impression that I must just pay up and shut up?
I won’t bore you with the rest of the gory details. Suffice it to say that after almost three weeks, I still do not have any answer, any proof that there were no duplicates, or any clicks for that matter!
Watch this space!
JP Farinha, CEO of Property24, responded that he is unfortunately travelling and may not be able to comment immediately since he will need to investigate the allegations contained in Jim Alexander’s letter. “What I can say is that our leads are de-duplicated through a technical process of identifying each individual browser to our site by using standard methodologies which are ubiquitous across the internet and widely accepted,” he ends.
Estate agents are talking about the news that Mamodupi Mohlala, CEO of the Estate Agency Affairs Board (EAAB), took a video of her altercation with an employee and then filed a R800 000 lawsuit against the same man for calling her a bully and an autocratic leader. Here are some of the comments on ‘This is not leadership’ says Rebosa.
Now you know why the EAAB is in shambles. It is quite obvious that the CEO has no idea about how to handle people. This is the attitude that permeates this organisation and it placed on the companies and people that are registered (or not) with the EAAB. This is how we are treated generally. Don’t blame the organisation, blame the leaders.
It seems to be a sad reality in our country of too many CEO’s and Ministers alike who are way too arrogant, yet un-skilled in the basics of sound business practice and social skills needed from anyone in the position they hold. From the arrogant thrones they sit on, treating the public as well as their staff, with contempt! Bit dictatorial I would say!
Wow, this is definitely a case of trying to distract her detractors. I have had dealings via email with this employee and I am not surprised at his frustration as he was one of the few that actually helped solve problems. At the moment the CEO should ask herself if she is another square peg in a round hole and completely unsuited for the challenge of the position she fills. The state of the EAAB is an embarrassment to the profession and it is an insult to the professionals that everyday have to deal with the paralysis that seems to have taken hold with absolutely nothing happening with regards to service. The Department of Human Settlements needs to take drastic action to rescue this situation and restore a semblance of order!
With the immanent closure of the EAAB and being replaced by a new identity, the ”Property Practitioners Regulating Authority” - I would expect that this is the best opportunity to implement a change of leadership of whoever is to move into the new Act with its administration. No sense in keeping leaders who are not suited to the position of CEO or any other management position and who do not comply with the expected behaviour requirements with regards to the public image as well as industry professionalism.
The holiday season is upon us and once again many homeowners in sectional titles face the prospect of noisy holidaymakers disturbing the peace at all hours. Wendy Shawe asks if the trustees can stop short-term letting if the conduct rule of their sectional title development states that excessive noise will not be tolerated? Coenie Groenewald, COO of the National Association of Managing Agents responds.
Bodies corporate are governed by specific rules and regulations. These are contained in both the Act and Regulations and is extended to the specific conduct rules of the body corporate.
Section 7 of the Sectional Title Schemes Management Act states that the functions and powers of the body corporate is to be performed and exercised by the trustees of the body corporate.
The Sectional Title Schemes Management Act, Regulations clearly states that;
a) A member (owner) must take all reasonable steps to ensure compliance with the conduct rules in force in terms of the Act by any tenant or occupant of any section or exclusive use area, including the member’s employees, guests, visitors and family members.
This places the liability on the member (owner) to ensure that the tenant or occupier is informed of the rules prior to occupying the property.
Management rule 30 further states that;
The body corporate (by means of its trustees) must take all reasonable steps to ensure that a member or occupier does not;
b) use a section or exclusive use area so as to cause a nuisance
Recent debate on short-term letting includes the concept of AirBnB. A recent matter before the courts are pending an appeal process where an owner was prohibited to let her unit on the AirBnB platform.
Argument can also be made to whether the body corporate is mainly used for full time primary residence by the members or whether the development is holiday accommodation.
The fact still remains that the rules must be upheld, and where contravention occurs, the trustees must inform the owner of the unit thereof and request that his tenants adhere to the rules.
Failure to comply may result in action which includes a dispute and complaint being lodged to the Community Schemes Ombud Service or perhaps imposing a fine if the aforesaid is also agreed upon in relation to the rules, which must be registered and filed.
It may be advisable that where this type of letting occurs within the body corporate that the members secure proper rules on how short-term letting must be managed to ensure that there is no uncertainty.
It was found that the issue of short-term letting or AirBnB is an International trend and different countries apply different rules and strategies to manage this. These include but is not limited to: additional levies or charges, restrictions to communal property, additional security measures Etc.
Pending the outcome of the appeal as noted bodies corporate may in future prohibit short term letting.
There appears to be divided opinion among estate agents on whether the ‘No FFC no commission’ ruling should be fought or not. One of the main concerns is that overturning the ruling will make it easier for unlicensed agents to practice.
Why fight such an important ruling? At last something to protect our industry from fly-by-nights and there's a drive to overturn it. The mind boggles.
NO FFC NO COMMISSION. There is no place for bogus agents
Agreed Cyril – but what happens if you are one of the 27 000 who have paid their certificate but aren’t processed in time through no fault of their own. It’s happened to all of us. I paid my contribution because it is the right thing to do … if you can’t afford R200 there is nothing wrong with paying what you think is fair … some folks have paid R50 … every little bit counts.
Also Romy Tarboton doesn’t need to appeal- she is doing it as a service to the industry. The industry bodies can’t spearhead this for political reasons, but we can all make a difference if we choose.
The case should be determined on the morality of the situation and the spirit of the law. Applying the letter of the law in this case is unjust, based on the evidence you have presented. Whilst the sharing agent is acting in accordance with the law, he/she is acting unethically by pursuing this case. It is an abnormal situation requiring special attention and common sense in the light of the circumstances which Judge Davis seems to lack.
With regard to the non-issue of FFC’s properly applied for, it seems that the law requires the estate agents to cease trading until the certificates are issued which is absurd. Provision should be made that if the estate agent can prove an application has been made, that trading is permissible (this would have resolved the above case).
Going back to the legalities of case study. Here’s another legal way of looking at it. If the two agencies had a sharing agreement and one agent did not have an FFC, does it entitle the agency with the FFC to keep the commission earned by the other agent? Isn’t that unlawful enrichment? It seems to me that the disqualified commission should be returned to the client who utilized the services of both estate agents in terms of the law. I would suggest that the Judge should have instructed that to be done to follow the letter of the law. The client could waive that entitlement and solve the problem or keep the commission. I would be interested in seeing a counter-argument.
To protect agents from damage due to a delay in FFC’s issued by the EAAB or future Property Practitioners Bill or whatever reason may be involved in the late issue of an FFC, I believe the right process should be to have a guardian fund with the requisite law society of each province where attorneys / conveyancer and who are required to pay over such commissions should be permitted to make determinations as to whether a valid FFC was in place at the time of the sale being concluded. Secondly, if there is any doubt of the validity of the FFC then such commission payable should be held in trust for a period not exceeding three months after which the funds with its interest should be transferred to a law society guardians fund for a further three months.
Should the agent not make a successful claim with a valid FFC certificate by then, the monies shall be repatriated to the attorney who was originally the conveyance, who shall refund the seller the applicable value as was the commission deducted from the selling price.
No other party (EAAB, or new Property Practitioners Bill regulator or the attorneys) should have any claim to the funds thereafter.
(Just to be clear. The aim of the appeal is not to overturn the current legislation that requires an estate agent to be in possession of a valid FFC when transacting to be entitled to commission.The relief sought by the plaintiff, Romy Tarboton, is that the court acknowledge that she has proven that her agency had fulfilled all the legal requirements to apply for a new FFC timeously; and therefore should be entitled to commission. Even if Romy Tarboton is successful it would not mean that those who have not complied can trade illegally. Ed.)
The new Property Practitioners Act says that a property practitioner must have tax clearance to qualify for a fidelity fund certificate, without which he can’t trade legally. What happens if you happen to be in a dispute with SARS asks Lauren Frizelle.
With regards to the requirements that an agent must be in possession of a valid tax clearance certificate in order to be issued an FFC, have there been any processes put in place to accommodate a situation where the agent is in dispute with SARS and therefore will not be issued a tax clearance certificate? What about instances where an agent is behind in tax payments, but is in the process of paying the outstanding amount/s? If such agents are unable to be issued with a tax clearance certificate, the capacity to earn an income as an agent is taken away, which effectively removes their ability to pay, whether this is in settlement of a dispute or in settlement of outstanding taxes owed.
Agreed. I would think that SARS will probably issue a Tax Clearance if arrangements have been made. It is still very uncertain on what basis SARS may refuse!
Property developers are included in the wider definition of property professionals in the new act but what about private sales by homeowners? Are there exclusions? The article ‘How the Property Practitioners Act affect property developers’ raised this and other questions.
Property practitioner is defined as … “includes ANY PERSON who sells, by auction or otherwise, or markets, promotes or advertises any part, unit or section of, or rights or shares, including timeshare and fractional ownership, in a property or property development”. ANY PERSON could also be a ‘property owner’ selling privately. Are there exclusions in the Act?
Theo, there are indeed exclusions, specifically a person who facilitates the sale of a property not in the ordinary course of business. Interestingly, another exclusion is a natural person selling his/her own property in the ordinary course of business. This to me looks like another anomaly: what about a company or trust in the same position, selling its own property? I don’t want to become too technical (and remember that the article only dealt with the position of property developers) but I think the intention was to exclude all private sales, but due to the numbering of the paragraphs there is some confusion here. There are no exclusions under sub(b) other than attorneys.
Developers are not included. Read the definition. It is someone who, for gain, ON BEHALF OF ANOTHER, sells leases, negotiates or facilitates the sale or lease of property, business, time share or fractional ownership (fancy word for a type of time share), etc. A developer acts for HIMSELF. Not on behalf of a third person. So, this cannot be correct.
Robert, your reference is to paragraph (a) of the definition; property developers fall under par (b).
With regard to the requirements that an agent must be in possession of a valid tax clearance certificate in order to be issued an FFC, have there been any processes put in place to accommodate a situation where the agent is in dispute with SARS and therefore will not be issued a tax clearance certificate? What about instances where an agent is behind in tax payments, but is in the process of paying the outstanding amount/s? If such agents are unable to be issued with a tax clearance certificate, the capacity to earn an income as an agent is taken away, which effectively removes their ability to pay, whether this is in settlement of a dispute or in settlement of outstanding taxes owed.
A developer never has money, their finances are always tied up in developments. With this new legislation the only time a developer will have money is when they stop developing.
With reference to the recent article in Property Professional on ‘Cocooning’ property consultant Jim Alexander writes he finds working from home liberating and he doesn’t miss the office politics.
The recent article ‘Cocooning’ was focussed on the trend of ‘people opting to stay home rather than go out for their entertainment.’
This was influencing home design and renovations driven, apparently by digital technologies as well as crime and unrest.
If the second driver is anything to go by, South Africa will fast become a world leader!
While reading this article, I was reminded of the trend which started quite some years back which can be summarised as ‘people opting to work from home rather than go to an office’. While those in employment required permission or buy-in from their employer, those self-employed and independent contractor types were free to implement this as they pleased.
For the employers/employees the advantages seemed obvious. Less time and money spent travelling (the fuel price was much lower when this trend first hit the headlines); more time with the family; no need to ‘get ready’ every morning; less expenditure by the employer on office space, coffee, printer paper and toner etc. etc.
I thought at the time that the real estate agent ‘job’ was very well suited to this work model, especially as we are all independent contractors, right?
I myself did find an environment where this model works very effectively and over the past 4-odd years have shared my wonderful on-going experience with quite a number of traditional model agents.
Some of them get it and are liberated. but many of them don’t seem to find it very appealing. Why not? I have no idea. Are office politics really that attractive?
As with the ‘home entertainment cocooning’, advances in digital technology help me considerably in working from home, not least of all because the price of digitisation, laser/colour printing, internet use and phone calls, net meetings etc are very affordable.
And, since I spend significantly less time on the road, my chances of becoming a crime statistic are considerably reduced.
So, while you are cocooning and watching Netflix, maybe you should consider joining the growing (slowly) ranks of the other type of cocooners and reflect on just how independent you actually are!!
There was a lot of hype a few years ago when some new players entered the real estate industry and promised to disrupt an industry that was in need of a shake-up. Harcourts Heritage principal Marc Rodrigues reflects on the changes he has observed in the marketing strategy of these ‘disruptors’.
One of these so-called ‘disruptors’ even had an advertising campaign poking fun at real estate agents whom they said did nothing except play golf all day and spend their ‘easy earned’ commission on luxury goods, holidays and fast cars. These companies offered a flat fee or very low commission but took away much of the services offered by other real estate agencies. Their focus was on technology and the key focus of their marketing efforts was on price – “one flat fee” was all that they required. They even had calculators on their website showing you how much you would save by using them instead of other estate agents.
It was no surprise that these companies gained some traction in the market as sellers looked to save money. One of the major services that they did not offer was showing your home to prospective buyers as they stated that ‘no one knows the house better than you do’. However, what they forgot was that the average person doesn’t sell houses every day, that even when bookings are made buyers fail to show up. Some buyers don’t like to meet with the person they are buying the house from and this makes the situation uncomfortable. A buyer can’t ask a seller property-related questions on matters such as servitudes, zoning rights and market trends in the neighbourhood. Sometimes sellers say things that inadvertently put a buyer off the property. The problem is that the process becomes personal and buyers and sellers get emotional when buying property. The buyer may also say something that doesn’t sit well with the seller and even if that buyer is willing and able, the seller may be unable to put emotions aside in order to get the sale through.
These companies have also stated that ‘traditional’ estate agencies do not have the technology to compete and that is why their fees are so high. I fundamentally disagree with their views and you will find that many real estate companies are focussing on offering technology to empower their agents to be more efficient and effective. Harcourts have a world-class system that assists with database and listing management and have even developed a number of apps, endorsed by Apple, that agents can use while on the go. The Harcourts technology roadmap takes the best ideas from people on the ground from all over the world, so this will place us in a good position going forward.
Perhaps most importantly, it takes a lot more to be a successful real estate agent than taking good photos, posting the listing on websites and boosting posts on Facebook. There are agents in our group who have been in this industry for over 40 years. They are still relevant today because of the knowledge that they provide to buyers and sellers, and we all continue to learn from them. Property transactions can be complex and if they are not handled correctly, any possible sale is bound to fail. Technology is an enabler to produce more effective marketing and make us more efficient in our day-to-day tasks but it can’t handle the emotions of buyers and sellers, it can’t make a deal work that was bound to fail and it can’t gain the trust that a good agent can when dealing with buyers and sellers.
It is true, you get some terrible agents out there that aren’t worth the commission they charge but there are others who are worth every cent.
In our business we have always focussed on relationships and offering a personalised service to our clients. These ‘disruptors’ have changed a relationship approach to a commodity approach. They may offer 24-hour service but most times you are talking to a computer or call centre agent. Our agents are on call on evenings and weekends. Our valuations are not based on gut feel, but rather on our intricate knowledge of property and the markets in which we operate. Our technology gives the seller full transparency with reports showing website activity, enquiry details as well as feedback on viewings. Many of our agents have degrees and many don’t, but when you have 40 years of real estate experience behind you and constant real estate training from the Harcourts Academy what does a degree matter?
It is interesting to see how these disruptors are slowly changing their business model placing more emphasis on the importance of the agent and no longer advertising their one flat fee. It seems that their business model wasn’t sustainable and that they have maybe come to the realisation that there are many good, knowledgeable, trustworthy and professional agents out there that aren’t in the business of ripping off their customers.
Jan le Roux, CE of Rebosa answers more questions on the National Minimum Wage Act (NMWA) and how it impacts the real estate industry.
I could not attend the road show in Cape Town. I live in Mossel Bay, a bit too far to drive. Can we please get clarity on the wages for agents? I have only one full status agent and she has a permanent job and works as an agent on her off days.
Comment: The road show in Cape Town was cancelled, but all information on whether your agent qualifies for minimum wage or not will be found in the Rebosa reports which are available online.
If the NMWA still apply if there is no employment contract between the agency and the agent?
Comment: If there is no contact the person clearly is not an agent in the agency. I assume you refer to a written contract, the absence of which has other complications. If there is at least be a verbal contract resulting in the agent being an employee, the minimum wage will apply.
Now that the Property Practitioner’s Act has been signed into law, some say that the title ‘estate agent’ has become redundant and must be replaced with ‘candidate property practitioner’, ‘property practitioner’ and ‘principal property practitioner’, with reference to the terminology used in the Act. What do you say?
Thank you for a great publication and excellent journalism.
- The Property Practitioners Act 22 of 2019 (“PPA22/19”) was signed into law on 03 October 2019, and Gazetted (No.42746).
- Act 112 of 1976 has been repealed.
- The PPA22/19 defines Property Practitioner / Candidate Property Practitioner / Principal Property Practitioner.
- Will you please consider referring to “Candidate Property Practitioners”, “Property Practitioner” and “Principal Property Practitioner” as defined in PPA22/19?
- The term or designation “Estate Agent/s” bears no legal substance or reference anymore since PPA22/19.
- We greatly depend on the media to move parallel with industry in transforming the South African real estate industry into a reputable profession in an attempt to advise the consumer of the upliftment and regeneration currently being driven.
- I am convinced that Samuel, Lew and Barry share the same sentiment.
Editor’s response: The Property Practitioners Act has been signed into law, but as was explained in the article ‘Property Practitioners Bill signed into law – now what?’ the relevant regulations to this piece of legislation has to be drafted and published before the Act will come into effect. The Estate Agency Affairs Board is currently undertaking the process of drafting the regulations – a process that is expected to take us well into 2020. In the meantime, the current legislation, the Estate Agency Affairs Act of 1976, still applies. However, this is a good time to start making the necessary adjustments to changes that are coming under the new Act. It is unfortunately true that estate agents generally have a ‘bad rap’, so perhaps a name change could be like getting a clean slate? On the other hand, keep in mind that the new Act includes a large group of professionals under the term ‘property professional’ – besides estate agents, also included are mortgage brokers, home inspectors and property developers to name but a few. How will we differentiate estate agents from these professions then? Real estate property professional falls a bit heavy on the ear, don’t you think?
I could not attend the road show in Cape Town. I live in Mossel Bay, a bit too far to drive. Can we please get clarity on the wages for agents? I have one full status agent and she has a permanent job and works as an agent during her off days.
If a landlord changes a lease agreement during the lease period citing ‘the reflection of new laws’ as reason, is a tenant obliged to sign? This question was asked in reaction to ‘Six questions tenants often ask‘
My landlord sent me a new lease for my rent-stabilized apartment, to commence in December. I signed it and returned it. Now the landlord informs me that he wants to replace the lease he submitted with a new lease which “reflects the new laws.” This is the email he sent: “I received your lease but I will be sending you a new set to sign. The rent laws changed and last week I was provided updated lease forms to reflect these new laws. I will be preparing them and sending them to you to fill out & sign.” Do I have to oblige?
First things first, the Rental Housing Amendment Act (the “Amendment Act”) has not come into effect yet nor is there an estimated date when it will. When it eventually does come into effect, the main impact that it will have on leases is that they will be required to be in writing with the rights and obligations of tenants and landlords also being added to the already existing list of items which are required by law to be included in a lease. The Amendment Act will also give teeth to the Rental Housing Tribunal, empowering it to make orders compelling the payment of rental as well as to make any order that is necessary to give effect to the contents of the amended Rental House Act. So whilst it is important to bear the provisions of the Amendment Act in mind when drafting and entering into a new lease, the Amendment Act is not in effect and cannot, at this stage, be relied upon should a dispute arise, as noted in the case of Kondile v Canary and Another. It is more important, at this stage, to ensure your lease is in line with current, effective, legislation such as the Rental Housing Act, Consumer Protection Act and the common law.
The Property Practitioners Bill was signed into law last week but won’t be enacted until the President makes a formal announcement in the Government Gazette. One of the concerns about the new Act is the broader definition of ‘property practitioner’. In reaction to ‘Property Practitioners Bill signed into law’ Les Reynard asked if managing agents would be included.
Reading the Property Practitioners Bill together with the Community Schemes Ombuds Act 9 of 2011 (“CSOS Act”), a managing agent would not need to register as a property practitioner so long as they are providing their managerial services to a community scheme as defined in the CSOS Act. Examples of a community scheme being a sectional title development scheme, a share block company or a home-owners association.
In reaction to ‘Minimum wage is no storm in a teacup’ a property practitioner comments: In a country where unemployment is of the highest priority, I do not understand the continuous obsession to make employers (employment givers) pay minimum wage.
Have nobody noticed that a minimum wage strategy only increases unemployment?
Practically speaking the only change will be the following for me:
My pool of non-performing agents, who I put my trust in to improve and learn, will decrease substantially (this is called risk management). These extra agents will then soon be without any job or income.
Whether a minimum wage is a good idea can most certainly be debated. It is however also true that, should you employ an agent that sells R1,680 000 pa (or average of R 140,000 pm ) at 5% commission ex VAT, that agent would receive R42,000 pa = minimum wage. Should you have an employment agreement in terms of which it is agreed that you can deduct the minimum wage paid from commission earned (see detail in Rebosa Report), you could actually be back to square one, ie no additional cost. This is not a big number, would one want an agent that cannot achieve as little? Surely this can also be debated? Especially because the absence of fixed income has always been one of the biggest barriers to entry.
(PS: The Rebosa event on the new Minimum Wage Act planned for 8 October at The River Club, Cape Town was cancelled. Editor.)
Learning that interns and estate agents in most cases would qualify for minimum wage under the new Minimum Wage Act have led to concerns being raised about potential job losses as well as other questions such as whether a sectoral exemption for real estate could be negotiated.
The basic conditions of the Employment Act has been in existence for more than 20 years. If an agent is not an independent contractor, he/she is entitled to paid holiday leave calculated at the average of the past 6 weeks pay. Good luck trying to run an agency where an agent takes his paid leave after a big commission payout. Same applies for sick leave and work on Sundays. Rebosa should engage the Dept of Labour to negotiate a sectoral determination for the real estate industry that will enhance transformation and not add another obstacle to market entry.
I have been to three presentations by labour attorneys in Port Elizabeth over the last two months, directly addressing this problem. The only logical answer is to create a Bargaining Council for our industry. This can then lay down the regulations, and in essence be created by the real estate industry to suit the unique working conditions and paid for by the agents and the interns. This is an industry trying to become a profession, unfortunately it is unique in many ways and very different to all other commission-driven enterprises.
Currently, as commission-based estate agents, we operate as follows:
We work strictly on commission. We earn commission based on a % split with the company broker owners and not all agents are on the same split (which is determined according to your previous performance valuation) – my split is 70/30 (30 % goes to the agency and 70 % to me).
Once we have made a sale, which has registered (which can take up-to three months), VAT is deducted from the commission amount. Then we pay royalty fees of 10% (up-front) to the franchise founder. After this, we are payed our commission according to our split (70/30 split) with our office. Then we pay tax and desk fees, etc. Not leaving us with much of the pie left.
My question – will this change and how? Who will regulate this?
Would this mean that an intern would earn less than a qualified agent? How would this affect an agent if the company they were working for was not registered. I was told there is an agency in Durban that’s not registered yet the Estate Agency Affairs Board is doing nothing about it, so what recourse would an agent have in this case?
(Rebosa is hosting a road show on 6 October at The River Club, Cape Town where the new Minimum Wage Act and it’s ramifications on the real estate industry will be fully unpacked. A second road show is planned for Gauteng – as soon as details are confirmed, it will be made known. More information on this critical issue to follow soon. Ed.)
It is better that trustees are not involved in work done for the body corporate writes Mike Spencer.
Trustees are elected to represent the body corporate and must be very careful not to give the impression that they are benefiting from their position.
The Sectional Titles Management Act makes it very clear that trustees may not be present when anything that is being discussed directly or indirectly involves them. The type of thing that will arise would be discussion of quotations involving the Trustee or the Trustee’s company or discussion on arrears owed by a Trustee.
Personally, I often find that trustees can offer to do work for the body corporate at a lower than normal cost, but the trustee must be very careful that they don’t see the normal contractor’s quotation and then do it for somewhat less. This is considered to be unethical. It is better that trustees don’t give quotations for work rather than be conflicted. That’s actually what the STMA suggests.
The problem is that many trustees do do work for the body corporate and I personally don’t see a problem with this, but trustees really have to be careful that no other owner or even tenant think that they are benefitting (even tenants can make a complaint). If the trustee is prepared to do the work for nothing (excepting actual costs of components) then there should not be a problem, but not if the trustee is charging for labour.
Commenting on ‘Minimum wage or maximum earnings?’ Mark Jones wrote that the financial impact will probably add to the reluctance of business owners to take on interns. Many agents also expressed concern about the financial burden implementation of minimum wage will place on small agencies.
Whilst the implementation of minimum wage may well be a reality that the industry needs to deal with, it in all probability further impact on the reluctance of many business owners to engage interns at all.
I would like to comment on the popular misconception that guides the “hit and miss approach” and the narrative that under-performing agents don’t cost principals much because they are on a “commission only” remuneration structure. Many principals themselves (except perhaps those who have true independent contractor contracts in place) have unfortunately never accurately quantified the cost of an agent. When all factors such as office space, advertising costs, personal marketing support and material, phones, web portal costs etc are taken into consideration, a minimum cost of R10,000 per month is not inconceivable.
There is also a very subtle, unquantifiable and seldom considered cost that for want of a better word let’s call opportunity cost. That is the cost incurred when an intern cannot maximise opportunities such as a listing or maybe a buyer because their closing rate and relationship building skills can never match that of an experienced agent. If that occurs six times a year, for example, that is in fact a cost of hundreds of thousands in lost revenue. In a market of limited opportunities, why would a principal expose himself to such risk?
A radical mindset change is required. When you enter the real estate industry, you are not taking on a job or starting a career - you are opening a business. Even if you are associated with a principal you are in business for yourself, just not by yourself. We need entrepreneurs, not employees.
As an entrepreneur, what investment are you prepared to make in starting up your business. If you want to enter this business you need to come with capital and pay a principal for his mentorship, his brand or at least pay for your costs. Where in the world do you get to start a business at someone else’s risk? Food for thought.
This will have a hugely negative effect on the establishment of small agencies and the resultant employment opportunities. How on earth can a small entrepreneur afford to carry even one, let alone several interns, for at least 12 months? The big boys must be rubbing their hands together!!
This will result in more job losses than ever. How can you pay someone if there is no guaranteed income? I have seen agents sitting in offices making phone calls and never sold a property. In three months’ time the estate agency will be bankrupt.
Many agents reacted strongly to the news (‘This is disdain and it spells double standards’) that the EAAB cancelled their contract with PrivySeal, after stalling for five months to renew said contract yet received services without paying for it. Here are some of the comments received.
It is so typical of the incompetence of the EAAB, yet again! Jan le Roux of Rebosa nails it when he says what we, the estate agency fraternity, have been saying for years: The double standards that the EAAB has when it comes to us having to comply with so many regulations before we are deemed fit enough to be able to ply our trade legally, but the EAAB remains seriously missing with their responsibilities:
"… the utmost professionalism is required of the estate agents by the EAAB. Yet, the EAAB fails to meet the same standard." – Jan le Roux
Get your act together EAAB.
The regulator is simply behaving in line with any other state-run endeavour. Why are we surprised.
Somebody needs to take the EAAB to task. I am tired of being “intimidated“ yearly with all the processes such as:
1. Company self-assessments
2. Annual audits
3. CPD points
The list goes on and we are told our company FFC’ s will be cancelled if we do not submit by certain dates.
Then on a Sunday evening I get a rather horrid shock by receiving an email in big red letters saying my PrivySeal is cancelled! I am sorry I have no good words left. Can any organization out there at stand up and take these jokers to task.
I seriously don’t feel like renewing my 2020 FFC’s but we all know that will not entitle me to qualify for commission (which the attorneys don’t even ask for). It seems easier to do business without FFC’s because the EAAB only worry about the paying agents and turn a blind eye on illegal operators. As if we don’t have enough to deal with.
My Privy Seal has disappeared! Am I concerned? No! It’s very rare that I ever see it on other agents’ emails, there has not been an awareness programme to consumers as promised, and why should one in any event need duplicate evidence of one’s qualification? It was completely unnecessary to have introduced Privy Seal in the first place. The EAAB should rather spend the funds and their energy on eliminating illegal non-compliant rental and sales agents. If this aspect was tackled, the industry would have a reduced number of agents, but be much more sustainable, and able to seriously address the costs required to ensure faster transformation in real estate.
I find it interesting that they suddenly now comment that they need to follow a procurement process. So, why did the EAAB not start the process before the current agreement with PrivySeal expired or have they suddenly decided it is no longer important. Why was it then so important a few years ago when we were told in no uncertain terms to have PrivySeal on all our e-mails. Oh boy, what a mess we find our governing body in.
‘You need a phone and listings – not a minimum wage’
Commenting on ‘Estate agents could qualify for minimum wage’ long-time estate agent Iavona Engelbrecht shares why she believes a good agent starting out needs a phone and listings more than a minimum wage.
When I started selling properties in 1991 as a rookie, my colleagues, who were already busy for a while were astounded at my success. Without any effort I took the prize for agent of the month every consecutive month. I bought an almost new car cash within the first three months.
Most of the time I’ve found rookies to be more successful than the experienced agents. I absolutely don’t think the taxpayers should be burdened to fund this crazy and opportunistic idea to knock the economy harder by paying an estate agent a basic wage – you either have it or you don’t.
When you start, you just need a phone. Today it’s so much easier, there are internet shops all over, what you need is listings. And what is always so awesome, if you are a nice person and get along well with people, belong to a church or any good organisation you will do well. For those who can’t speak English and Afrikaans well, read a lot, read the newspapers and find out what’s going on around you, then you should have an income within the first three months. Don’t spend all your money, work wisely with it. If you think you need a basic wage, then this profession is definitely not for you.
For those agencies who have been around for a while, making such suggestions is shocking – our country is in a mess because of all the crazy suggestions.
Lots of monies have been given to you to train old experienced agents as interns. You have sold many houses over many years, the average age in the industry is 58 years, why should people go back to Sub A and the poor taxpayers had to pay for these ideas that are so costly.
So, in a nutshell, no to basic wage, the funds are much needed to grow our economy and restore SA.
Why am I still in this game – because it is the life!
Roger Lotz, sales partner with Rawson in Somerset West, was asked recently why he is still in real estate to which he instantly replied “I love it” but that night he started thinking about it. He shares his answer as follows.
I am always thinking of ways to enhance my business, like get up early in the morning and prepare my mind for the day, keep myself updated with current market trends and market myself in whatever way possible to keep me sharp and on the edge. So, I recently identified a few select clients on my database and asked them if I could earmark them as my ambassadors. These are people I keep close and they, in turn, refer business my way. While having lunch with one of my senior ambassadors, he posed the question to me.” Why are you still in this game Rog? Surely it gets tough sometimes.” I laughed it off and gave the expected answer saying “I love it” which in all honesty I do. That evening, as I lay in bed, the question kept running through my mind, keeping me awake. So, I decided to get up and write down the answer to his question.
For me, being in this industry, you need to have real grit. It is very challenging to keep up with market trends and the ever-fluctuating economy. It can be very competitive and at times it can beat you down to the ground. There are so many things that are out of your control and often the disappointments, and hours, for that matter, don’t seem to be worth the 5% (if that, sometimes) we fight for. You really need to be tough, and I don’t mean hard-headed and obnoxious tough, I mean that cowboy-you-see-in-the-movies kind of tough. The one that manages to keep riding and heading for the horizon, making his way home to his family through the icy cold winters and the dry hot summers, never losing focus of what is waiting for him at the end of his journey. You have clients sometimes with unnecessary demands, buyers with cheeky offers, sellers with extremely high expectations and often, some really inconsiderate requests. So, while writing this, I’m seriously asking myself, “why am I still in this game”?
Well, each and every time I do a deal, something just north of brilliance happens. There are those young first-time buyers and newlyweds who are so eager to start their journey, and watching them go through the process of learning how to buy a house and walking them through all the necessary qualifying steps to get them there, is always entertaining. There are those young families that are not looking for a house, they are looking for a home and it makes you feel as if you are starting a family all over again, remembering how it was for you and guiding them to avoid some of the mistakes you made. There are the more senior clients that want to get away from the empty nest syndrome and you highlight their sale by introducing them to the young family who will flourish in their home. Then there are the tough ones, like a break-up, or a health issue or loss, and even though those ones are hard, you get a sense of servanthood by assisting them and somehow making their load seem just that much lighter.
Every deal is different and each deal I do holds a new memory for me and an even better lesson. Most of the clients remember me and a beautiful friendship is formed. Some clients may move away and then the phone calls dwindle and then stop. Whether these clients remain in contact or even if they never remember my name, they will always remember how my profession in some amazing way impacted their lives. So, to answer your question as to why I am still in this game, Mr Ambassador. To me, this is not a game, ” THIS IS THE LIFE” and I intend to live it to the full.
2) Alma Bronkhorst shared her personal opinion about the EAAB: I have been a registered estate agent for more than 35 years, paid my fees and received a beautiful professionally printed FFC every year.
The last few years the fees went up exorbitantly, you have to print your own certificate, attend CPD meetings that take you out of the office for half a day.
I learned to do eLearning to curb time and cost – Now why must I pay R2,500 to sit at my desk and do unnecessary training of myself? It is a never-ending 3-year cycle, surely we can do it every 5 or 10 years.
What happens to all our money, our fund should be billions, we never get anything back, not even a printed certificate. Surely the interest on our fund is enough to pay their salaries and create bursaries to several approved interns.
I had no freebies, paid for my own petrol, walked the streets, got bitten by dogs, had to deal with unfriendly people, had no internet, no cell phone and had to pay for publication of adverts in newspapers. We did it the hard way.
Today everybody sits behind their desk, a necessary evil. You are consumed by administration, printing costs, internet advertising fees, auditor’s fees and, am fearful of the EAAB. Now they are using the attorneys to police us … “no FFC, no commission”. Really?
Will enforcing minimum wage be too much of an additional financial burden on agencies, making especially smaller entities hesitant to take on interns? Many agents thought so after reading ‘Estate agents could qualify for minimum wage’
With the majority of agencies having a “hit and miss” approach to taking on interns, this legislation will have a severe impact across the industry namely:
- 1. Current “non-performing agents” will be retrenched for non-performance
- Agencies will be reluctant to take on interns
- Interns cannot be independent contractors
- Franchise models with costs per agent will have to rework their cost model.
- The act creates yet another barrier to entry
- The act is also counter-productive to the transformation drive
- Small businesses simply cannot afford an overhead like this.
- Interns will be subject to vastly different operational requirements from
employers so gone will be the days of flexible hours for agents.
- Interns will be subjected to harsh probationary periods.
The list could go on, but these are the glaringly obvious and indicative of yet again a short-sighted implementation of legislation without role-player consultation.
I’ve worked with intern estate agents earning a stipend and, to be frank, ulterior motives around the use of said stipend are always evident … the die-hard motivated and successful agents in our industry attended the school of hard knocks and with it some enlightening lessons around work ethics, determination and the drive required to achieve success in this field. This is utter BS and obviously an ingenious way for government to walk away from the stipend centric initiatives the recently incorporated to assist PDI’s penetrate the property market … our market place without the buy in from their Public Works budgets.
What if the Government pays the minimum wage for the first 12 months if the average income is less than the R3 500 minimum wage so as to curb the ever-rising unemployment? Perhaps similar to “3000 unemployed youth will be trained by this R250m programme. … With the additional funding of R250 million, CapaCiTi will now be training 3000 candidates with industry-demanded technology and business skills, placing them in permanent jobs in South Africa’s leading companies.” I guess unsustainable and lack of funds …just asking?
The EAAB has a “One Learner One Agency” not enforceable policy in which they expect an agency to train an intern at its own cost. Add to this the implications of the Minimum Wage Act, estate agency principals will rethink any training of new estate agents. The average age of estate agents is around 53, mostly white females.
The news that Leadhome dropped the fixed-fee model in favour of a ‘variable fee’ drew a lot of response, mostly from traditional agents with some proposing the disruptor offer an apology for their bad rap of the former. Here are some of them:
As a fellow property practitioner in the industry, I believe in the method of building face to face relationships with clients. The values of honesty, integrity and service delivery cannot be compromised when dealing with clients most valued assets and in an effort to build long lasting business relationships.
Clients still prefer personal hands on expertise and with the use of technology we as agents have a platform to be more innovative in how we derive and achieve results, that’s beneficial to our customers all the time and every time.
A lesson can be learnt, and all too often people and organizations get it wrong.
I still believe, one should slowly go about one’s business without passing judgement and publicly making negative comments, and let success be one’s noise. This way if all else fails at least you can still show face. Hard lessons …
I think before they move into the same real estate industry that they ran down to build their brand, they should make a formal apology to the entire real estate industry for their destructive entrance into the industry.
I see a place for both technology-based agents, as well as traditional agents. God speed to all.
Computers can’t think out the box…. something agents have to do on a regular basis. Computers can’t advise you. Professional agents are well worth their fee. And it doesn’t take the same amount of work for every deal ... high or low … not true. Each deal is completely different and you never know what to expect. You have to be ready for anything…. pretty much 24/7.
Driving high volume in a slow market to justify set fees was always going to be difficult. Purplebricks in UK and Canada still going strong, they strangely used a different model in new markets in the US and Aus. Time will tell if investors will keep supporting them. Have a look at Realogy (US) and Countrywide (UK) stock prices – some traditional models suffering more.
Most of the bottom feeders who have recently entered the industry openly slander and denigrate professional estate agents; and greedy sellers who support them lap up false information and believe by listing with them they will save money.
The truth is:
- Low fees don’t sell property! Professionals negotiate better selling prices that far exceed a few thousand rand saving in fees.
- Professionals have an expansive data base and large referral network.
- Professionals have strong brand awareness which is attractive to buyers.
- The real estate industry has been offering all the technology benefits, and much more, to buyers and sellers for years, plus many years of expertise, knowledge and other value-added solutions.
- The “technology” companies merely jump on the bandwagon, subscribing to technology that the traditional professionals have developed over many years. They have not developed or added any industry beneficial techno systems themselves.
- Traditional agencies market property; and advertise real estate across a very wide spectrum of websites and portals locally and internationally. Their branded websites are highly ranked. The bottom feeders merely advertise on some property portals and hope for a lead.
- Do an internet search and see how many of these wizkid businesses are ranked on the first few pages of the Internet?
I am looking forward to the next year. The current economic slump will sort the men out from the boys!
I have been selling real estate since 1989 and the majority of my business comes from my database and referrals. My clients prefer to work with me (a trusted and knowledgeable agent) and pay a fair commission, than go with an agent they don’t know for cheaper and risk a bad transaction. Computers don’t have local knowledge. Technology has a place, clearly, in the future of real estate, but human interaction and trust cannot be replaced.
Only a matter of time before PGP realize just how much they paid for a model doomed to fail … Soon it’ll be cheerio Eazi.com and PropertyFox.
The boom in sectional title units may be short-lived according to some of the comments received on ‘Why sectional title sales are booming in SA’
Why the trend towards Sectional Title accommodation ?…the answer is simply because the initial escalation of PRICES of the household properties and the affordability ongoing, of living in a SUBURBAN HOUSE….especially now , in the Western Cape, is too HIGH… what with the huge increases in Rates affecting the Western Cape., as a result of the DA local government increasing the Municipal Valuations by 30-50%!
As a result , this action will have a rolling add on effect that will necessitate higher prices in the near future especially on Sectional Title units which come up for sale ! NOT SUCH GOOD NEWS!
Absolutely correct re your last comment, Winston. Sectional title units may be selling faster but the main reason for so many sectional title units becoming available is the problem of high rates and levies being imposed. Many sectional title owners (especially investors) are finding that the rentals they are asking cannot keep pace with the levies and rates they are paying. Rental amounts are actually coming down because of the financial constraints of tenants. Owners are paying higher rates and levies (which often include special levies and CSOS levies), so holding sectional title units is no longer seen as an attractive investment and they are being shed by disillusioned investors. Eventually the glut of stock will also impact on investor sellers as they try to get good prices for their units and don’t succeed.
The barrier that regulatory ‘red tape’ poses to transformation as explained in ‘Meaningful transformation requires a shift in attitude’ struck a cord with some agents.
Fully agreed, after all this time there is no apparent improvement in the drive for transformation. This week I received a copy of a letter from the Cape Town City council refusing to issue board permits to agents if they are in arrears with their property rates and taxes in addition to forcing non-selling principals to register for board permits in order for interns to obtain their permits. The question begs:
- Does the City view the industry as a soft target to fill their coffers?
- How are agents that do not own property dealt with as they do not have rates to pay?
- All of their policies create yet another barrier to entry and goes against the national government policy of unemployment alleviation and job creation.
The departments throughout the various parastatals need to co-operate with each other and ensure that policies do not clash or at least compromise, so that all can move forward in one direction instead of pulling in different directions. Or we’ll face stagnation as we currently do, and as a result we now have this transformation idea that hasn’t gained traction because of the various agendas at play.
It is quite a very sad story more especially to us as the ‘novice’ to break-through in this industry and as the writer alluded, the biggest barrier is that of lack of access to equity and enterprise development funding.
The most disheartening matter is that at a grass root level you find that the beginner has done pretty well in terms of owning that piece of land and developed it to be what it is today, but in order to climb up to another level the funding is needed.
Indeed, the industry needs to prioritise programmes that support and develop emerging real estate enterprises.
Mike Spencer, principal estate agent with Platinum Global, writes he believes equally important to selling a property is educating a home buyer, especially a first time buyer, on all that this big decision entails.
Most first-time home buyers often know next to nothing about the ins or outs of buying a property. There are also many new buyers that come from a background where property ownership is unknown and I personally believe that estate agents have a moral, if not legal, obligation to make sure that these new buyers are informed about all that happens when anyone buys a property.
Few people buy more than the home that they live in and as a result over a lifetime they might buy a flat when they are young, a house when they have a family, and a sectional title unit when they retire. In other words, they only buy a property every 10 years or so – and there can be major changes in how this is done over that time.
In terms of the Code of Conduct of the Estate Agency Affairs Board, an estate agent is obliged to explain the contents of the offer to purchase that the buyer is signing. In practice, if the estate agent does try to comply, they often just read the contract to the buyer. This does not explain it. I would suggest that in most cases the buyer is simply asked to sign here, here and here!
Should estate agents go further? In our company every new buyer is firstly interviewed about what they would like to buy, why they would like to buy and how much they can afford to pay. Before the buyer is shown any properties, they are connected with a leading bond originator who pre-qualify them for finance. With this information our estate agents are able to show properties that the buyers can afford – including taking into account the transfer and bond costs. During the interview we help the buyers by explaining the buying process particularly with focus on things such as explaining extra costs, rates, levies, water and electricity. Also explained is a sectional title buyer’s responsibility for looking after their unit and to some extent how sectional titles work. For us an important discussion is around payment of the bond and transfer costs. Further to this we explain how bond payments are calculated and the real advantages of paying extra on their bond.
While our job is to sell a seller’s property we believe that it is equally important to educate a buyer on the buying process.
Educating the buyer will result in fewer problems for everyone.
What can a landlord or rental agent do about a tenant that is continually 3-4 weeks late with their monthly rental payments? Rental law expert Marlon Shevelew, director of Marlon Shevelew & Associates shares advice on this and other rental-related issues.
If a tenant is late with his/her payment, and assuming we are dealing with a natural person, then a formal letter of demand is required. The demand can clearly state that in the absence of payment within 7 (seven) calendar days, legal action can be commenced for the amounts owing plus costs. It bears mentioning that in any month, if the payment is still not forthcoming within 20 business days from date of the demand, the lease may be cancelled and the occupant provided a period of time to vacate. Note: the notice should also make express provision for the tenant to remedy his default within the stated 20 business days in order for the right to cancel the lease to accrue to the landlord.
A procurement of a tenant is a specific mandate that a landlord provides an agent and if the agent has done its due diligence when placing the tenant, there would not be an opportunity for the landlord to claim back the commission earned for the balance of the lease. There is no law that provides for a claw back of commission in such an instance, especially if the actions of the tenant are no fault of the agent. Note: the landlord may be entitled to levy a portion of the lost commission to tenant in the form of a cancellation penalty pursuant to section 14(3) of the CPA - this will have to be a pro-rated amount.
In short, the tenant is not liable to pay any further deposit. This deposit should be paid over by the previous landlord to the new landlord whom has stepped in his predecessor’s shoes. Note: the principle of huur gaat voor koop would apply so as to ensure the validity and enforceability of the lease going forward. The tenant’s obligations thus remain the same, as do his / her rights. In terms of the RHA the landlord is required to invest the deposit in an interest bearing account, and upon expiry the tenant is entitled to return of same (along with accrued interest), less any amounts deducted for damage to the premises and other amounts that may be owing in terms of the lease. Thus, it follows that in the event of the property being sold the previous landlord is required to pay the deposit to the new landlord, as the new landlord will be obliged to refund the tenant upon expiry of the agreement.
Many estate agents have complained in the past that Property24 tallies every click on the agent’s phone number or email on a listing as generated leads and bills them accordingly. Jim Alexander, area manager from Mossel Bay, laments this method and explains why. This is his letter.
We are all familiar with the term P.O.P. It usually means Proof of Payment but can also mean Proof of Purchase.
For example, like many of you, I subscribe to Windeed and when I use their service, say to get contact details, they send me an invoice stating the number of times I searched for contact details in that month. There is a record of each search I made, and I can send myself an email of the contact details as further proof to check when the invoice arrives.
The same is true if I use Lightstone services – there is a record of my transactions that I can cross-check with the invoice.
Not so, Property24!
With P24, apart from the significant charges each month for my listings, I get charged monthly for any ‘leads’ that were generated through their portal. Well, on the surface of it, that could sound reasonable, but it’s not and it gets worse.
Even if I do agree with their definition of a ‘lead’ (which I do not), I have no way of checking. All I can do is go into my Agent Zone and will then see that the number of ‘leads’ generated is recorded there. If I ask for IP addresses, they are unable to provide same. That is their proof of purchase, their statistics backing their invoice.
I must just pay – and preferably shut up! Because, according to Charles Scott, their General Manager, he has evidence that most sales made in our industry (I think he said 90%+) are generated through the P24 portal. He waxes lyrically about how important P24 is to us agents and even states that, if he was forced to change the method of charging, he would do so in such a way that P24 would generate the same revenue – or even more!
So, what is my problem, you might ask? Here it is.
If someone opens a listing of mine on P24 they will see under my name at the right-hand side 2 blue hyperlinks. One says, “Show Contact Number”, the other says “Show Email Address”. If either of these is clicked on and therefore opened to view, P24 defines that as a ‘lead’. It doesn’t matter that I did not get a call or an email, that is a ‘lead’. Fake news, anyone?
If you go to Wikipedia, amongst a lot of information on the different meanings of the word ‘lead’, you will find this wording “a lead is usually allotted to an individual to follow up on”.
How can you follow up on someone who never called you, never texted you or never emailed you?
One of my agents who normally gets an average of around 15 ‘leads’ got 77 this month and no way of checking, no proof of purchase, just pay up.
This method of generating revenue is the height of arrogance.
Finally, I ask, “Who is to blame for this blatant profiteering”?
To quote Walt Kelly’s phrase “We have met the enemy and he is us”. I have decided I no longer want to be my own enemy. I will be delisting my properties from P24 this week, who will follow?
The clause in our monthly subscription agreement clearly states how a “lead” is defined and what agents are paying for. If we were able to charge only for actual leads, we would need to track phone calls which would be an added expense and our prices would change to reflect each actual lead as opposed to the current definition. It would not reduce our pricing, the cost per lead would simply increase.
Leads are defined as an active click on the “show contact numbers”, “show e-mail addresses” or completion of the capture form that can be sent to the agent/agency as an SMS (and copied via e-mail).
With regards to leads and lead quality classification, we treat our lead brackets as indicators of listing distribution, brand exposure and market interest. We do not operate on a strict pay per lead model, nor do we associate a particular value or fee to each type of lead. We view an aggregation of all lead types as a trended measure of opportunity over time and have thus priced them accordingly.
(Scott also indicated that Jim Alexander wasn’t the contract holder with P24 but his business owner who had agreed to the terms and conditions of the contract but passed the costs unto each such individual agents. Ed)
In response to ‘SSETA leading the way’ Angela van Deventer wrote and asked: “Will we be able to do our PDE this way. Looking at next year.”
The Estate Agents Affairs Board (EAAB) set the Professional Designated Exam (PDE) and they embrace elearning. PropAcademy have an easy to follow online PDE course for both Level 4 and Level 5 and have an extremely high pass rate. With this elearning course we offer free webinars and if required a face-to-face half day workshop.
“New real estate models and technology advancements are increasingly challenging the status quo. This is why it is currently not a clear-cut choice on whether to go for franchise or independent agency if you are looking to start a new business”, comments Adriaan Grové, CEO of Entegral on ‘Want to own a business? Joining a franchise is one option’.
Based on client feedback from over 14 years and closely monitoring international trends, there is however indications that opting to go the independent route, has opened up more value compared to 10 or 20 years ago. Today you need less red tape and a more agile business model to survive the onslaught of disruptors entering the real estate market and compete in a more competitive market where commissions are increasingly under pressure.
Looking at the US it’s hard not to notice how Wall Street is throwing money at new real estate models and companies that are starting to dwarf existing franchises in terms of valuation, but that not necessarily profitable. This is the new normal. Big changes are coming in real estate and the focus is on efficiency and scale for exponential gains. A lot of franchises are re-positioning themselves to be seen as more tech focused, but I’m wondering it this is a little too late for a lot of them if you look at share prices.
At Entegral we’ve seen an increase in the number of agencies converting to a more virtual environment to reduce operating costs. No franchise border restrictions helps with efficiencies both in terms of the size of your operational areas and agents you attract. At the same time we see smaller operators having big success in smaller more focused areas, where they have stamped their local authority with a few high performance agents.
Today the internet is an equaliser with small and large estate agencies competing with each other on the same property portals, social media platforms and in many cases use the same back end software.
Independant agents make up the majority of the market when it comes to agent count. It’s a trend we see in the US too and companies like Redfin and Compass has put a damper on the agent growth of many franchises. The franchise of the future is the one who can focus on maximizing profits and efficiency for their agents.
This year has probably been a record in the number of franchises looking to go the independent route with no less than 3 large franchises converting to independent status in the last month with Entegral.
Some of the feedback we received from owners includes issues with having to compete against your own brand in the same area and the freedom to try new initiatives without head office restrictions. Another major advantage for them is that they are not forced into agreements with certain suppliers and not having to pay royalty fees improves their cash flow.
Fact is, today many independent service providers have systems that are on par or superior when you compare it with franchise offerings. Independent service providers like us receive a constant feedback stream from a variety of real estate models, leading to better focus on the critical features required by everyone, it is not dictated by a few within a certain real estate franchise model.
In the end of the day, both franchise and independent agencies can be mediocre or industry leaders, no matter what resources they have available to them. To me, it is all about the leadership that drives a certain vision and that is open to change.
A drawback currently for independents is that there is no collective bargaining structures in place. We’ve seen this with some franchises having shareholding agreements with portals and bond originators, leading to benefits on their bottom line through for instance, more preferential subscription fees. On the other hand, some would prefer a business free from bureaucracy and it is here where the independent model while shine for some.
‘The EAAB should focus their attention on investigating non-compliant agents than policing the compliant agencies’ says on ‘Rebosa says EAAB must halt wasteful inspections’
I have been in the industry for 20 years.
From 2003 every year until 2017, I spent many hours compiling lists with names / cell number / website addresses etc. and checked on the EAAB website if these persons had FFC’s and indicated this on the forms. I personally handed these lists to various EAAB officials at numerous “stakeholder” events… as well as via the whistle-blower route. In the end I had inspections done at my company with no problems on my site but for the past 16 years NOTHING has been done against those on my lists. These persons still trade and this includes attorneys who have “agents” that “work” for them!
This is disgusting as we who are agents that jump through all the hoops, red tape, audits, FIC compliance, register for VAT etc. etc.…cannot sustain our agencies due to these illegal operators! A large portion of our income goes to being compliant and these rogue agents get away with all of this and get the mandates as they can operate on 4% commission. Shame on the EAAB…but it is the norm for them!
To obtain consent to conduct compliance inspections from estate agents who hold valid Fidelity Fund Certificates will not root out the ones operating without an FFC. The Board must run through their files and check on the disqualified estate agents. The word goes around that some of these agents opened estate agencies where they act as managers and/or directors in such agencies. The Board must do a thorough investigation in this regard. This is my opinion.
The EAAB should focus on approaching the hundreds of unregistered agencies and thousands of illegal agents as well as the so-called (unqualified) property consultants working for low cost attorney firms. And, when is something going to be done about the thousands of illegal rental businesses and their unregistered agents, including all the online home rental businesses? All of the aforementioned are undermining the industry, threatening the viability of compliant entities and therefore impacting on transformation.
Comments on ‘SA estate agents earn their ‘high’ commission’
The property industry would totally collapse if agents only charge 2% commission as suggested that SA does the same as the UK. One must consider the principal agency takes 50%. Ridiculous suggestion.
The majority of homes in Australasia sell by tender and not via auction as stated in the article. About 24k homes are on sale in NZ currently, with only about 1k marketed as auctions.
Stock price of Purpble Bricks dropped. But is it worse than Realogy (holding company for Sotheby’s, Century21, ERA etc) which lost more than 50% of it’s value since start of the year. Truth is, traditional franchise models are currently under a lot of pressure. The only winners today are the portals (look at Zillow and Rightmove stock prices).
In the UK, the published rate is about 2% commission but nearly all London high street agents actually charge between 1-1.5% fee. Agents work on basic salaries ((£15 to £20k basic per annum) and then take about 10% commission split. You need to factor in cost of living and longer work hours, so the commissions are in fact much lower there.
In the US, due to seller/buyer agent representation an agent makes 2-3% and not the full 6% in most cases. The US antitrust division is currently investigating MLS buyer commission structures, which might disrupt the whole MLS market, kill buyer agents and open the door for low fee agencies like Redfin.
In the UK agents work for a salary of 2000 pounds per month and a small commission after so many units sold, I do not think that system will work in SA.
Comments on ‘high’ commission rates of SA estate agents in response to comments on ‘Hidden costs when using set-fee agencies’
I’m not a fan of one of the biggest “fixed fee” agencies as one has to show potential buyers your home and there is no agent present. I agree with most of the article. Traditional estate agents need to be far more flexible as their commission rates are too high. They would not get away with those rates in other countries such as the UK where the rate is around 2% not 5 or 6%.
Graham – commission rates are indeed much lower in the UK but property prices are much, much higher in the UK. The proceeds of sale of a rather average home in the UK would buy you a ‘dream’ home in Cape Town. Also, it’s a more efficient market with higher turnover, especially in metropolitan areas; from a technological and regulatory perspective, it’s much more up to date and sophisticated. If we were all selling R15m – R40m homes in CT regularly, then 2% wouldn’t be so hard to bear – but we’re not. If agency commission rates dropped to 2% here, I think a very large number of agents would leave the business, as they wouldn’t make any money at, say, half of 2%. Moreover, their employers would either go bust, or have to drastically reduce agents’ share of the gross commission (prompting more agents to leave the business) – and the remainder might have to convert to digital, just like the disruptors the article refers to. So best keep commissions where they are and provide the best possible service to clients.
As an ex agent and principal of 30 odd years in the SA industry and now living in the UK, I can tell you that while the commission rates here are much lower (2-3%) the agents in SA earn and deserve every cent of their money. Agents in the UK do not have to go through the onerous task of studying (or RPL) or in fact be qualified in any way. They only work business hours, they do not go out to show properties but rather either send the buyer on their own or employ “viewing agents” who merely open the door but have little or no info about the property. The agent merely verbally passes on the price offer to the seller, the solicitors then write up the contract and also does the finer negotiation on fixtures, occupation date etc. Both the buyer and seller have to engage their own solicitor so in spite of the low commission rate, the seller in addition still has to pay for his legal representative and this runs into a couple of thousand pounds. All in all, South Africans get a much better deal for similar cost. When buying our house here, we dealt with nine different agents from the same agency – none of them took accountability, knew pretty much nothing and could not give us any advice or direction.
One estate agent commented that the safety tips in ‘One agent assaulted, another hijacked’ were “fabulous but not practical”. Read her letter and share your thoughts whether you agree that verifying a client’s identification before showing a property is not only impractical but could cost your agency sales.
The tips are fabulous but not practical. I think ‘no ID, no viewing’ is not possible unless the EAAB makes it compulsory. I am of the opinion the moms and pops agencies will take buyers out regardless and so the reputable agencies will lose business this way and thus just be forced to compete with 1st call answered or 1st viewing arranged mentality from the buyer.
If a buyer drives past your For Sale board and calls to view the home, it is impossible to check email addresses etc.
If you take a client to one house and they want to see two or so after that appointment, there isn’t always time to call the office, but yes, this one could probably make the most sense of all of them.
A code work such as ‘Check the electricity box with address’ is impossible when you are in an armed robbery as my business partner was a month ago. She had a gun to her head and we all knew where she was (as I was supposed to be there but was running late) and so there was no way of knowing that she was standing with a gun to her head as the armed robber was not going to give her any “one last call” opportunity, so no code word in the world could have helped her here as there was no way of knowing there was a problem. She wasn’t alone. The developer was with her and also the helper. Not ONE of them could use any code word of any sort. All they could do was pray.
Group viewings – a great idea, but again you may not have a group interested in viewing the property and so many times you end up with one viewer OR have to co-ordinate a group’s diaries … impossible task.
Show houses – you often have one car stopping and another a minute after, and so while greeting the current viewers the second family already enter. It is thus impossible so assess the situation and make a call to close the gate in their face.
All these tips are really grant ideas, but I find none of them truly useful.
My aim is not to challenge the tips or opinions but rather to TRULY find a solution to the dangers we face many times in a single day.
I had a professional person view a home the other day. A lawyer, in fact, and all legit as I had to call him back at the office. I was asked by this person if I would care to pleasure him while the owner of the house was downstairs. This to me is our biggest risk, you cannot trust anyone. Not even a professional in a fancy suit. And so, if we cannot trust anyone, then what is the answer to keep us safe or sane actually?
On the role of machine learning and artificial intelligence (AI) in real estate (in response to ‘AI in real estate need not be feared’) there was some difference of opinion. Here are the comments from our Facebook page.
The article ‘One agent assaulted and another hijacked’ once again illustrated the vulnerability of estate agents when hosting show houses or meeting clients to view a property. Here is what some of you had to say:
I want to suggest that the industry through all its platforms “promote” the fact that buyers need to be informed/advised that it is becoming a requisite that they need to provide ID before viewing will be permitted. I would even say that they have to provide proof of residence as well whilst at it. They will need to in any case by the time they wish to make an offer.
By all platforms I suggest that the likes of Private Property and Property24 publish it somewhere in the showhouse adds as well.
I agree with the fact that agents should ask their prospective buyer for a pre-approval letter from their bank or their bond originator together with a copy of their ID document before viewing any properties.
I have personally done so for a while already. However some agents have made appointments with me for their clients to view and when you ask them the surname of their client, I have often been told that they don’t know the surname of their client (only their client’s first name).
This is shocking to me that an agent can run with people that they don’t even have a surname of as I can tell people over the phone that I am Sandie when I am in fact Charmaine.
Property Professional website comments:
It is nerve-racking to list property in areas, especially where crimes are least expected. I believe all agents should be armed with some sort of protection like pepper spray, tazer, gas gun etc.
I am an agent and was assaulted in an area in Polokwane. Six tenants under the influence of alcohol threw me with beer bottles. One even got in my vehicle. I drew my firearm and all disappeared in separate directions. No one was harmed, but things could have gone real bad. I reported the incident to my principal and the owner and was told to rather not list in that area again.
I agree at least two should work together and still be armed. We are there to make a living and agents will go anywhere to make a deal happen. This is their food on the table. Be safe, be armed! (Comment shortened, Ed.)
I believe the only time the issue of agent security will be properly addressed is when one of us gets killed. Show days should be banned on a national basis. Appointments checked out before viewing.
Here are some of the comments received on ‘Hidden costs when using set-fee agencies’:
Well said, most local agents tend to go the extra mile. It’s not just about listing and selling, it’s about knowing your market, building relationships with buyers, sellers and other role players. It’s about stepping in when a seller is out of town and requires assistance. It’s about assisting the purchaser who doesn’t drive but wishes to view, assisting with requesting plans … the list goes on and on.
Two possible major factors that are often overlooked when ‘employing’ a budget agency option to market your home (marketing does not necessarily lead to a successful sale), are:
- The inherent inability to deliver a high level, sustainable marketing plan, that exposes the property to potential buyers that are ready and able to purchase your property at a premium price.
- Unmotivated estate agents and support staff, that are not able to cover their cost of service delivery to the seller, could result. The lack of incentive alone is an indicator of possible failure to deliver, and acceptance of first-come, first-served offers from potential purchasers becomes an option.
Possibly seen by struggling estate agents as a short cut approach to real estate marketing, it is simply not a sustainable business model, and the client potentially loses.
I’m not a fan of one of the biggest “fixed fee” agencies as one has to show potential buyers your home and there is no agent present. I agree with most of the article. Traditional estate agents need to be far more flexible as their commission rates are too high. They would not get away with those rates in other countries such as the UK where the rate is around 2% not 5 or 6%.
“The Estate Agency Affairs Board (EAAB) overburdens the real estate industry in South Africa – for the industry to flourish and grow fewer regulatory and costly barriers to entry are needed,” comments an experienced property practitioner. Here follows the rest of his letter:
The EAAB is not only frustrating the industry but oppressing our businesses and prescribing how we must run our enterprises, to our own detriment and that of our industry.
They are the cause why our industry has regressed instead of flourishing and gaining new members. Their barriers to entry and rules and regulations, the compliance imposed on existing members and new applicants, make it impossible to grow a business, employ new staff and grow the industry. They are the cause why a great majority of potential estate agents are not prepared to join the industry.
For individual agents the monetary costs for licence fees, logbooks, NQF4 fees, PDE and keeping themselves going is indeed a huge challenge. Most persons seeking employment in the industry are down and out elderly persons with a small income, looking to boost their monetary situation. Where are newcomers going to get the money to enter the industry, sustain themselves, pay for expenses for private über, or running a motor vehicle, paying for basic expenses, business cards, registration fees, cell phones etc?
The majority of estate agencies are family-based small operators, perhaps just a husband and wife, or medium sized companies and cannot carry others in their businesses or assist financially. They can only help a select few that show some potential and stability.
If you take into account the countrywide statistics of real estate sales and compare it with the number of agents whether registered and compliant or non-compliant and illegal you will discover that the average agent is on a starvation diet.
If we are going to transform this industry, we want no barriers of entry, just a small registration fee to ascertain who is registered as an estate agent and what the count of our registered members are. We will double the influx of estate agents to our businesses in a matter of months
‘Intern’ agents will be allowed to operate totally on their own after a year or 18 months. They can earn more money on commission splits after writing a practical exam set by the board and passing same. If an individual wants to establish their own business, they can, say after a minimum of three years of uninterrupted practical experience in the industry, take a further exam. The board sets the study material and the final examination.
The EAAB can also consider creating a practical and educational real estate school for interested newcomers to the industry and all graduates from that facility will be employable immediately. It is impossible for a principal today to tutor, fund and taxi interns and still have time to do everything else that is required to run a successful business.
Why must the EAAB place themselves between the existing laws of the country and the real estate industry? There are existing laws for misrepresentation, latent and patent defects, theft, fraud, FICA, unfair competition and anti-competitiveness etc.
In any industry, the business owners or directors are always responsible for the actions and omissions of their employees and staff. In the same way, real estate principals and directors are responsible for the actions of their employees and staff.
We have to create an easier way to recruit. We need an environment where the real estate business can flourish and gain new members who will remain loyal and become successful employees as well as new members who will learn the business and start their own. This is what has always happened in the past.
About a decade ago there were over 80,000 registered estate agents in this country. Those figures has dropped dramatically since, keeping in mind that a percentage of the reduced membership are strictly speaking non-compliant not to mention the percentage that is unlicensed. One phenomenon that all stakeholders must accept is that the real estate industry since its’ inception has always had a large turnover of staff. Like the saying goes a third are coming, a third are leaving and a third are staying. This is the greatest challenge for any type of business or industry, especially real estate.
The composition of the EAAB Board should also be structured totally different from what it is at the moment. There are many astute persons serving on the Board, but I am amazed that only a few of those serving on the board have come through the ranks of the real estate industry. How can they make rules and regulations when they have no practical experience of the vast complexity of the real estate industry – the challenges, the hardships, the competitiveness, the frustrations, the financial demands, recruitment difficulties, exploitation by some of the property portals, print media expenses, the marketing costs associated with our industry? Surely the existing successful practitioners and leaders in the industry can give some guidance on what the practical challenges of the real estate industry are and offer some possible solutions. That said, cognisance must also be taken that some of the franchisors/franchisees have different agendas to further their own goals and aspirations to the detriment of other competitors, newcomers, rules and regulations and independent owners. The ideal “Board” should therefore consist of estate agents (60%) of which 30% maximum represent franchisors/franchisees and 30% represent real estate independents. The other 40% on the board should be public representatives such as attorneys and people representing other fields of expertise.
An Imbizo should be held by the EAAB with all the major role players. It must be also noted and understood and brought to the attention of all, especially the EAAB, that the perceived BIG players do not necessary do most of the real estate business in any given town. If you do a survey you will find that the independent estate agents combined might be doing more business than the bigger brands. A lot can be learned from the “smaller operators” which is where all today’s big business brands started. The Board should be more attentive to the huge challenges that both parties are experiencing at the moment and I am surprised and perplexed that we cannot solve these problems and yet we all have the same goals to grow the industry.
These ideas have been restated on numerous occasions. The time to engage with the EAAB is sooner rather than later if we are going to achieve what both parties are envisaging.
P.S. Remember that acts, rules and regulations can be amended and changed if you dedicate yourself to the process.
The ‘One Learner’ estate agent training programme is a great concept as long the promises made about stipends and proper follow-up are kept. A few principals shared their experiences with the first roll-out of the programme in response to the article ‘EAAB recruiting for ‘new’ One Learner programme.
I love the idea, but here is my experience:
About 7 years back I employed an intern, enrolled him on the program - neither he nor the company ever received a cent. He dropped out.
About 5 years ago I employed another intern and tried to enroll him. One morning at 8.30 am he received a text saying we had to be in Observatory for orientation. I cancelled all my appointments, signed wads of documents and never heard another word. Neither the intern nor the company received any money. After 4 months I reduced his salary with the hope that by that time he would be earning commission and he left.
In 2018 I enrolled an intern who had already started with a real estate training school, the promise was a stipend and free tuition. We filled in every form, got a time table and eventually received a curt email saying she did not qualify because she was enrolled at another school. Clearly the real estate training school was getting the money and in control.
In 2019 I employed a young chap with a property qualification on a stipend. I promised to pay him more if there were any incentives from the EAAB or SSETA.
Three weeks in, he was contacted by the EAAB as they were offering jobs, he took the day off to meet with them. He returned with an email address for an EAAB employee, and the belief that he would be on the program with our company as the employer. I emailed the EAAB employee twice, no response whatsoever. The intern emailed and got a response. I was given another name and I emailed that person, no response. Towards the end of March or April IEASA advertised on a Friday morning on Facebook that the EAAB is looking for host employers by 5pm that evening, for induction the following Tuesday. I saw the Facebook ad at 7pm and responded. No response to date.
This intern previously enrolled on a program and has now been fined R1500 by the EAAB for not paying R350 for his FFC last year when he was unemployed. One would think that this would be waved for a black intern.
How can the program be successful when estate agencies are not asked to participate?
I have so much knowledge to give but paying an inexperienced person a salary indefinitely is a cost to the company. The EAAB should be paying me to train interns, they would learn so much.
Some companies get 10 interns on stipends, but legitimate companies like mine do not even have emails returned.
I really question the process for the selection of the estate agency employer. Why is every application my company makes unsuccessful? It simply does not add up, the EAAB and Services SETA need to explain why:
Every principal wasn’t informed by personal email of the program. To find out about a program, advertised by a voluntary association on Facebook on the day the offer closes, is beyond ridiculous.
If an intern is signed up, the payment is never received?
Why only some schools qualify for the program?
Why it is always done in such haste and such a disorganised way?
Why EAAB employees ignore emails?
Why such a few estate agents are given the opportunity.
The concept is great, but the implementation is not.
When the One Learner program was set up some years ago, I embraced the process and interviewed a number of suitable candidates and took on a learner that had a 2 or 3 year entrepreneurial diploma. As a result, I was immediately able to place her as an intern. The EAAB provided the stipend for 12 months while I and other senior staff in the office mentored her.
The fact that today she is now a qualified agent has nothing to do with the EAAB. She received no educational help from the EAAB. At the end of 12 months her stipend fell away although I pleaded with the EAAB to continue the stipend until she qualified. I made the decision to appoint her and provided the resources to ensure that she received the educational training. At the time the EAAB wanted 20 000 learners on the program. My gut tells me that less than 20 learners on the program qualified as agents. If you work out the cost per qualified learner, it paints a very scary picture.
Many estate agents says they were inspired by Willard Nyamagodo’s success in property sales without a car of his own and wanted to know how did he do it? Here’s his answer and some of the comments on the article.
The answer to that is as an estate agent you must manage your time and make sure you are on time for your viewings. I did that using Uber nothing more.
Congratulations Willard for all the hard work and the motivation you have contributed to the likes of me. When I think of the fact that presently I have no car, I get a bit demotivated and a bit anxious but with your input here, I am going to push forward just like you and hope for the best.
Well done!!! I am sure you will prove to be an excellent agent who will achieve great heights of success. It just shows you with determination you can achieve your goals and you were relentless in all the obstacles that you were given. There are many agents who sit back and moan about what is not happening in the real estate industry and having all the tools to work for them. You have now proven what can be done and with hardly any resources. I say again, well done to you.
Well done Willard, I know that you are aiming higher and you have shown that it’s possible by being resourceful in your own way and its paid off ... congrats go get that 30 million … I am also motivated.
Mike Spencer, principal of Platinum Global in Bloemfontein writes that government should look at using underutilized industrial sites to solve the housing crisis.
We are all aware that there is a shortage of zoned low-cost residential sites and we are plagued with informal housing projects. These unsightly and illegal developments are a blot on the landscape and are often developed in quite the wrong spot for entirely the wrong reason. Their presence often causes a host of problems from unsightliness to security and health issues. The government is struggling to control this illegal development which is encouraging widespread disregard for proper town planning across the population.
It would seem that the government has not made provision for housing sites for the lowest income population and has been overwhelmed by the shift from rural to urban living. In many cases this is exaggerated by populations moving from one province to another as is evidenced by the shift of population from the rural Eastern Cape to the Western Cape.
At the same time, in many parts of the country formal development of industrial areas has taken place, often in excess of the requirement for industrial property. Many of these sites are now unused or underused with many standing idle and in older industrial areas with little hope of ever being used for industrial purposes. Even parastatals have excess property that could be given up and used for other purposes. Transnet has a network of unused stations and workshop areas that could be made available, much of which is situated in the centre of towns and cities or close by.
Much of this underutilized industrial property was designed with heavy production in mind and are supplied with high levels of water and electricity connections which is more than sufficient to cater for the population of a new residential development. These sites are already situated within zoned areas and could be used (often without rezoning) for residential purposes. They usually have some public transport associated with the area and are served by existing road infrastructure.
Could these sites not be purchased or reallocated for use for low cost and indigent housing? Instead of informal settlements, without any facilities and subject to the risk of fires and rioting, formal low-cost housing could be created on formal sites that are already supplied with the necessary infrastructure. These sites are also well situated near to potential sources of employment and at worst are on formal transport routes for commuting to where work is available in other parts of the city.
Use of these sites would be cost effective. The necessary changes could be implemented with the minimum of fuss and time delay and would allow for a far higher level of affordable housing at minimal cost.
Perhaps it is worth thinking about and investigating further.
Keri Ferreira, principal of Home&Equity Property Services asked why sectional title property managers don’t have to register with the Estate Agency Affairs Board (EAAB)? The principals are registered but the individual portfolio managers working in the sectional title property companies are not. This is unfair practise and something the EAAB is turning a blind eye too?
The definition of ‘estate agent’, as contained in section 1 of the Estate Agency Affairs Act, was expanded by a Specification of Services notice published under Government Notice R1485 of 17 July 1981.
Regulation 2(a) of that notice extends the definition of estate agent to include any person who collects or receives money payable by any person to or on behalf of a developer or a body corporate in terms of the Sectional Titles Act in respect of a unit or proposed unit. The regulation deals, in essence, with the payment of monthly levies or other moneys due by the owner or purchaser of a sectional title unit to the body corporate. The EAAB, thus, exercises jurisdiction over sectional title managing agents who collect or receive money payable by any person to a body corporate in respect of a sectional title unit. The EAAB, in addition, has jurisdiction over managing agents who institute legal proceedings to recover payments owed to a body corporate.
The principals, and various other persons in the service of the sectional title management enterprise, are required to register with the EAAB, and to be issued with a valid fidelity fund certificate, to enable them legally to perform their sectional title management services. It may sometimes happen, however, that specific portfolio managers are not actually involved with the payment of monthly levies or other moneys due by the owner or purchaser of a sectional title unit to the body corporate.
The ‘Has SA become too unsafe for open show houses‘ article had numerous readers commenting on this topical matter on the Property Professional website link. Here are some of the comments received:
I live in East London and when we put our house on the market and it was a show house, our problems started. In a short period of time we had 6 break-ins and that was with 4 big dogs in the yard. After I put beams on the outside it stopped. So crime is really on the increase, also in complexes which we now live in. Show houses also bring criminal elements.
Show houses are unsafe both to agent and seller. It is time to do a virtual tour of properties at the office, or a restaurant, after a formal qualification of what the purchaser can afford. Principals need to modernize their marketing methods. Real modern buyers prefer this time-saving method. Once this pre-approval of both buyer and property took place, a formal viewing can be arranged.
I have felt strongly about this subject for years!!
I believe a set appointment with viewers during the week gives the buyers every opportunity to view the property in a shorter space of time. In fact, this creates exactly the auction type excitement show days are supposed to do. I used this method effectively in Gauteng and Durban. Genuine buyers will attend.
It’s way past the due date to hold Sunday show days. In SA it’s not sensible anymore. What is everyone waiting for? A tragedy? This has already happened to agents in SA and to have two agents going to meet a client is not going to stop a robbery, it just means two agents are going to be vulnerable.
Show days can also be held at an open office and agents can go from the office to the property (on a Sunday if this remains popular) with the clients. With other agents/buyers around it’s less likely people, like the sellers, the agents or even buyers will be vulnerable and lessen the chances for opportunists. It’s time to change current methods and consider everyone in the equation: sellers, buyers and the agents who are so vulnerable. It’s about caring for everyone concerned.
The event in Rustenburg proves that even working in a team doesn’t make a difference (the agent took a colleague with her) – all that does is increase the number of victims. Any time of appointment – whether it is an open show house or viewing by appointment – is a risky business. Agents have to come out of the bubble of “it won’t happen to me”, become more vigilant, put systems in place (like a panic button and a tracking app on their cell phone, e.g. Life360) to let somebody know when they are in trouble, and proper self-defence training (e.g. Krav Maga) is extremely important. At the end of the day, there is nothing like a physical viewing of a property by a potential buyer, which ‘feeling’ I don’t think any virtual tour will ever be able to achieve.
Being an agent who has been involved in selling land, I do not have this problem. I once had a seller of land in an estate who refused to let me go on show. I notified certain select clients (about six of them) that I would be on show at a certain time, no ‘On Show’ boards etc. I had an excellent turn out and sold one property … it really works! These days to have six genuine buyers at a show is a fair response! The buyers also arrive with a feeling of importance knowing they have been ‘selected’.
Even worse, the same agents who complain about crime and lawlessness are the same people who illegally place advertising boards on the median and in fact just anywhere they want in contravention of the bylaws. I fully agree with this well-written article and know that the change begins with me.
Numerous agents commented on our Property Professional website and on our Facebook page in reaction to ‘Agent robbed at gun point by ‘home buyers’. Shockingly quite a few indicated that they had also been victims of crime during home viewings.
We at Urban Spaces Realty in Sunninghill don’t have open show days. Our show days are organised for a certain time during the week, whereby we become familiar with the potential buyers and have all their details before the viewing.
I was a real estate agent for over 20 years and ran my own company for 14 years. I received a call from a so-called “seller” who asked me to come and valuate his property in Quellerina (Jhb). I made an appointment for the next morning and when I arrived, he was nowhere to be seen. I walked through the garden gate and saw this man bending over the flower bed who said that he was looking for his remote. I said I would help him and turned the other way. When I turned around again, he was spraying pepper spray in my face and came behind me and that is all I remember. I was unconscious for 2 hours and when I came too, I found my 2 carat diamond ring and hand bag was stolen. I was kicked all over my body and he obviously tried to strangle me and thought I was dead. After many months of therapy, I decided to close my business.
I was held up at gun point – gun against my head in a show house. Let me tell all of you it is a fear that will never leave you. Since then I will not to show houses even being 2 in a show house. If 3 guys walk in with guns, what can you do? Nothing. We don’t sit at our own homes with our doors open allowing stranger to walk in.
I honestly believe that when the agent arranges for the potential buyers to meet at the agency’s offices, a photo of the buyers should be taken to add to all the other documentation such as ID, vehicle registration number and proof of residence.
No open show houses – only controlled viewing.
Pre-approval of a potential buyer can sort this out. If it is a serious buyer, they will certainly have no problem with giving their info. Without that, rather lose a sale than your life.
Perhaps view by appointments should be considered for the near future. We all know as agents that show days are the best way to obtain exposure and names of prospective buyers, however in the present economic climate in SA reality indicates that crime is paramount.
Learn self-defence, including awareness training and last resort, emergency options as part of your skills set.
Show houses, by law, should be done away with. A genuine buyer obtains ample info on the website maps and can then schedule an appointment during working hours to view the property.
In response to ‘Looking at ibuyer: Proptech won’t replace agents say expert’ Adrian Grové, Entegral CEO wrote to share his thoughts about proptech and the new ibuyer model.
There is clearly a misunderstanding of the whole iBuyer model in this article. My thoughts:
1. iBuyer is not a ‘technology’, it describes a completely new disruptive real estate model and a different way of selling a home by not going the traditional route. Technology is only a part of it (predicting the house value), but the whole process including home revamp and customer experience is part of this model. It is also not house flipping, this is a model that is designed to run at scale with very thin margins.
2. Online agencies didn’t start the ibuyer model, new tech companies did (Opendoor who invented it, followed by Knock, OfferPad, Redfin and Zillow while some franchises like KW are also dipping their toes into this. None are true online agencies).
3. “…aimed at buyers who need to sell in a hurry, usually due to an urgent need to relocate or some sort of personal/ financial distress…”.This is probably the biggest misconception. The attraction with the ibuyer model is a quicker and simplified sale… plus who wouldn’t want a guaranteed cash offer? A 6% ibuyer market share in Phoenix achieved in a very short timeframe is testimony to this. As the public warms up to the idea of an instant sale and iBuyer offers move closer to market value, we will see market share increase exponentially.
4. “…in return for a fairly large discount on the price…”. Data from researches show that margins are actually very small 1-2%, and with increased competition and advancements in data modeling techniques will become even thinner.
The real money for someone like Zillow is possibly in the add on services, e.g. they own a mortgage company. Plus, it is a brilliant way of generating new sellers leads. Even if people don’t opt to sell instantly, the lead can be passed on to agents (at a price).
5. “Online agencies” like Redfin are not dressed-up versions of low-commission agencies we’ve seen for decades. These are technology companies built to scale. Redfin has a highly successful portal that for instance draw more traffic than Remax, and a unique business model that makes their agents super efficient even on a fixed salary model. Redfin agents close 4.5 times more transactions than the average agent.
Proptech won’t replace agents, but it will marginalize any inefficient models. This is where a real estate franchise perhaps have the biggest challenge, as large overheads including royalty fees and office costs will put businesses under pressure. In an already competitive market where commissions are squeezed, we are seeing an increase in the number of enquiries with Entegral from franchises looking to convert to independent status.
iBuyer is here to stay, Wall Street is pouring billions into this new end-to-end customer experience. The initial target markets (cookie cutter neighbourhoods where prices can be predicted more accurately) will be expanded as models are refined. With machine learning technology, this process will be accelerated faster than most are able to perceive. The key here is to keep supplementing the machine learning models with additional data and even visual feed analysis like photo tours to make price predictions (and instant price offers) more accurate. If we can build self-driving cars via machine learning, why can’t we predict house values?
At the current rate, some predict that we might see about 50% of home sales in the US done through the iBuyer model in five years. That’s Uber growth like and a real possibility of happening.
For the iBuyer model to work you need three things: seller leads, capital and data.
Zillow and Redfin have the advantage here as they are both well-funded and their portals draw the most traffic with 37 and 15 million unique visitors a month respectively. They have all the data too.
In a South African context who is best positioned that has access to loads of capital, seller leads and data? Makes you think, doesn’t it.
In response to ‘Security: landlord or tenant’s responsibility?’ Christine Ireland asked: “If a tenant decides to terminate a lease early because of a break-in, is it fair to impose the early termination penalty? Rental expert Shaun du Bois of Just Property gives advice.
Shaun du Bois says: Crime is an unfortunate reality in South Africa but neither the Rental Housing Act of 1999 nor the CPA make any provision for a victim of crime to be given any additional relaxation in terms of early cancellation or associated penalties.
Section 5 of the CPA regulations provides some guidance but as they cover almost every industry they are fairly vaque.
Section 5 seeks to provide guidelines on the following:
(a) The amount which the consumer is still liable for to the supplier up to the date of cancellation;
(b) The value of the transaction up to cancellation;
(c) The value of the goods which will remain in the possession of the consumer after cancellation
(d) The value of the goods that are returned to the supplier;
(e) The duration of the consumer agreement as initially agreed;
(f) Losses suffered or benefits accrued by the consumer as a result of the consumer entering into the consumer agreement;
(g) The nature of the goods or services that were reserved or booked;
(h) The length of notice of cancellation provided by the consumer;
(i) The reasonable potential for the service provider, acting diligently, to find an alternative consumer between the time of receiving the cancellation notice and the time of the cancelled reservation; and
(j) The general practice of the relevant industry.
The penalty imposed would need to consider the above factors and the tenant could motivate that he/she has needed to leave due to no fault of theirs and ask for a reduction in penalties, but the landlord would be under no obligation to accept this. It is important to understand that the penalties are not set in stone and the parties are able to negotiate what a fair penalty would be. The tenant should seek to find a suitable replacement tenant which would mitigate the landlord’s potential loss and reduce any penalties charged.
Geoffrey Manning comments on ‘Why people sold property in 2019’s first quarter’: Believe it or not, there is a price war out in the market place. The smaller agencies who operate from a home office that is tech savvy has a competitive advantage, as they do not have the ridiculous overheads of the “Big Five.”
The whole industry uses the same advertising portals and methods of marketing. Hence the individual agent can give a better personal service and achieve the same results at a lower commission.
The pricing of the property is simple and transparent using the valuation portals.
Gone are the days of overvaluing a property to obtain a sole mandate.
Being that we are in a difficult market, if the seller does not have to sell now, he will see an upturn sometime in the future.
Deon Swanepoel comments on ‘Looking at ibuyer’: The ibuy program will eat into the volume of residential homes that normally finds its way to an auction.
Walker comments on ‘Demystifying the proposed Rental Amendment Act’: The law still favours a tenant that refuse to pay his rent and squat for months before moving – which leaves the poor investor/landlord broke. We know of cases where the poor landlord paid an attorney and opened a case file. This file got lost in court and two years later there is still no court case and the tenant is long gone. Surely they should investigate this further and come up with a better solution.
The article ‘No FFC no commission to be resolved by Supreme Court’ was shared widely and attracted some comment on the Property Professional social media platforms. Here are some of them.
I hope for everybody’s sake that sanity will prevail and that the court will resolve the matter to everybody’s satisfaction. By far the most real estate agents work hard and add value to their client’s affairs. They deserve to be respected by the community and earn their income when due.
The judgement implies there is an effective system to obtain the license. Unfortunately, the administration of the EAAB is so bad at present that it’s taking many months for the board to issue and renew FFCs. Furthermore agents are spending hours and hours on the phone as you are required to log a query to remind them and then call them so that the operator can send an email to the back office notifying them there is a logged query to open etc … and this must be repeated weekly to get a result otherwise the query disappears. Their fees run into the millions every year because of the the cost of the compulsory CPD training at R2000 per agent (and there is 40 000 plus agents) and this is besides registration fees. The organisation needs an overhaul.
The EAAB better do their work correctly. So many agents paid for FFC and months later no FFC received. If you have proof of receipt that you paid the EAAB, how can you be held responsible if the EAAB don’t supply your FFC?
Dean Ash wrote: The EAAB will block an agent’s profile and withhold the issuance of the agents FFC if the agents CPD (Continuing Professional Development) programme or payment thereof is not up to date.
In the past an agent’s FFC or licence was issued annually to the agent, providing the agent had made payment timeously. So, an FFC was similar to renewing your motor car licence each year. So, like the licensed motor vehicle driver, the licensed agent would renew their FFC (licence) each year.
But then the EAAB decided that a licensed agent should only be considered licensed or legal if they undertook ongoing training and paid for such ongoing training annually in advance. I feel that this is unconstitutional.
Once an estate agent or motor vehicle driver is licensed, the licensing authority cannot after the fact, re-define or re-evaluate the authenticity of the individual’s licence. Either they were deemed licensed or they were not.
I feel that the EAAB can amend criteria for new agents entering the industry, but they cannot rewrite history and deem the already licensed agent unlicensed should they not undertake new training to make them more licensed or more qualified. I feel that the entire real estate industry in South Africa was hoodwinked here.
I feel that where it comes to the EAAB and regulation of the real estate industry in South Africa, that estate agents and real estate agencies do not stick together. There is always strength in numbers.
I think too often a dispute between an individual estate agent or estate agency and the EAAB is like a muffled voice in the wilderness.
These are my personal views.
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