{"id":7137,"date":"2024-04-22T10:02:29","date_gmt":"2024-04-22T10:02:29","guid":{"rendered":"https:\/\/propertyprofessional.co.za\/?p=7137"},"modified":"2024-04-22T14:24:09","modified_gmt":"2024-04-22T14:24:09","slug":"new-legal-opinion-charging-agents-hoa-fees-is-illegal","status":"publish","type":"post","link":"https:\/\/propertyprofessional.co.za\/2024\/04\/22\/new-legal-opinion-charging-agents-hoa-fees-is-illegal\/","title":{"rendered":"New legal opinion: charging agents HOA fees is illegal"},"content":{"rendered":"\n

MAIN IMAGE: Senior counsel George Kairinos from Advocates Group 21, Jan le Roux \u2013 CE of Rebosa, and Jos\u00e9 De Abreu – founder and managing partner at De Abreu & Cohen Inc<\/strong><\/p>\n\n\n\n

Editor<\/em><\/p>\n\n\n\n

While some HOAs have stopped the practice of charging estate agents accreditation or marketing fees to operate within gated estates, many continue to do so, much to the frustration of agents who are legally not allowed to pay said fees, under fear of losing their FFCs.<\/p>\n\n\n\n

\u201cIt is illegal for agents to engage in it, and to top it all off, it\u2019s purely a money-making mechanism on the part of these HOAs and needs to come to a complete end\u201d, says Jan le Roux, CE of Rebosa<\/a>. <\/p>\n\n\n\n

Several HOAs have recently decided to cease the practice, but it still abounds. Against this backdrop, Rebosa asked Senior Counsel George Kairinos from Advocates Group 21<\/a> for a legal opinion on the matter. This opinion has far-reaching implications.<\/p>\n\n\n\n

What questions were asked?<\/strong><\/p>\n\n\n\n

Advocate Kairinos was tasked with examining five specific issues to provide a comprehensive legal opinion:<\/p>\n\n\n\n

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  1. Are HOAs subject to the provisions of the PPA, and are they required to comply with the provisions of the Act in general terms?<\/li>\n\n\n\n
  2. The application of Regulation 35 (entitled Undesirable Business Practices) in the context of HOAs engaging in these practices.<\/li>\n\n\n\n
  3. If an HOA’s conduct falls within the prohibited business practices laid out in Regulation 35, would it constitute an offence as defined in the PPA?<\/li>\n\n\n\n
  4. If, by requiring an agent to pay fees, the HOA is, in fact, engaging in an unlawful act.<\/li>\n\n\n\n
  5. Whether, to the extent that the conduct of an HOA falls within the prohibited business practices of Section 63 (1) and the foregoing regulations, the PPRA would, in principle, have the authority to take steps against such an HOA.<\/li>\n<\/ol>\n\n\n\n

    What does Section 36(1), Regulation 35 in the PPA refer to, a quick refresher:<\/strong><\/p>\n\n\n\n

    The legalese follows, but Section 63(1) of the PPA states that arrangements in which an HOA, for example, receives money or another form of reward for providing an advantage to one agent over the other or excluding another agent are undesirable business practices.<\/p>\n\n\n\n

    Section 63(1) of the Property Practitioners Act, 22 of 2019, read with Regulation 35.1 provides that the Minister of Human Settlements declared the following business practices undesirable and therefore prohibited:-<\/p>\n\n\n\n