MAIN IMAGE: Lindiwe Sisulu, Human Settlements Minister
Rebosa welcomes the forensic audit of the Estate Agency Affairs Board (EAAB) as ordered by Human Settlements Minister Lindiwe Sisulu as a step in the right direction.
On 1 March the Minister called for an audit of all transactions, investments done and processes followed with regards to the Fidelity Fund, appointment of staff, tenders awarded and legal matters attended to by the EAAB over the last two years. The cost for the audit will be for the account of the EAAB.
Rebosa chief executive Jan le Roux says he believes the audit came as a result of the legal action taken by Rebosa. “The fact that the Minister called for an audit is a step in the right direction. I believe the alarm bells are ringing and stuff is beginning to happen,” he said.
The call for the audit follows after industry body Rebosa applied for an urgent court order against the regulatory body in an attempt to force them to comply with legal requirements and regulations regarding the timely issue of Fidelity Fund certificates. Rebosa believes several thousand FFC’s must still be issued.
The EAAB and Rebosa appeared in court last Friday 5 March. A ruling is expected by the end of this week. Minister Sisulu is also one of the respondents on the court order but did not oppose it.
The EAAB opposes the court order. EAAB CEO Mamodupi Mohlala has said earlier that only a small group of estate agents (3%) did not receive their FFC’s by 1 January due to technical problems the EAAB has with it’s outdated IT system but that this is being attended too. Mohlala this week told Property Professional the overhauling of the system should be completed by the end of March.
In a statement this week EAAB chairman Nkosinathi Biko said the EAAB will cooperate fully with the audit. He welcomed the call for the audit saying the board is confident that all it’s affairs are in order and added they.
Don’t boycott the EAAB
A tech failure with the EAAB’s Professional Designation Examination (PDE) on 25 February was the final straw. Estate agents paid R2 500 for the mandatory exam that can only be done on the EAAB’s online platform, however, on the day of the exam many struggled for hours to gain access remotely. Desperate exam candidates made frantic calls and sent emails to the EAAB for assistance that went unanswered. This left estate agents so furious that many called on Rebosa to orchestrate a mass class action to boycott the EAAB.
However, one should bear in mind that a boycott of the regulator is not the same as refusing to renew your car licence which at most will result in you having to pay a fine. In terms of the Estate Agency Affairs Act all estate agents must be issued with a Fidelity Fund certificate to be legal and to be legally entitled to claim commission. The new Property Practitioners Act, which is expected to become in force by April, will make it illegal for a conveyancer to pay commission to any property practitioner without an valid FFC. In short, an estate agent must have a valid FFC to be able to legally earn a living.
Consequently, Le Roux says though he thoroughly appreciates that estate agents are frustrated, a class action will not achieve more than what Rebosa is currently asking for with the court order. Rebosa claimed in their court order that the EAAB has failed to deliver on its mandate of regulating, maintaining and promoting the standard of conduct of estate agents and as such has become an active hinderance to the ability of estate agents to conduct business in accordance with the law. “This is exactly the type of action that the estate agents are asking for,” says Le Roux.
Rebosa chairman Tony Clarke says he is hopeful that the audit will finally reveal the root of the regulatory body’s service delivery issues. “Rebosa wholeheartedly supports the intended role of the EAAB in implementing the Estate Agency Affairs Act and promoting better transparency, disclosure, accountability and governance in our industry. In it’s current form, however, the regulator is effectively achieving the exact opposite,” he ends.
