Constania Sectional Title Management (CSTM) must stop operating as an estate agent after a High Court order was granted against it by Acting Judge Gerald Farber.
The agency’s Fidelity Fund Certificate was withdrawn and in terms of the Estate Agency Affairs Act a valid certificate is required.
The order was granted after the Estate Agency Affairs Board (EAAB) sought an urgent interdict against CSTM, which administers about 450 body corporates in the Roodepoort area.
Inspectors appointed by the EAAB had apparently found “serious irregularities” in the CSTM’s management of its trust monies.
The order was not opposed by CSTM or by its former director and owner, Quentin Brown.
According to EAAB’s lawyer, Andrew Scarrot there was an estimated shortfall of about R18-million in the agency’s trust fund.
Lawrence Moepi, a chartered accountant at PricewaterhouseCoopers has been appointed as the curator and will have to establish exactly how much money, if any, is missing.
The EAAB’s investigators Pasco Risk Management has been investigating the company over the past month and since the investigation started it has apparently unearthed further evidence of mismanagement.
The EAAB has laid criminal charges against CSTM.
Last month the inspectors discovered that more than 80 accounts in the name of CSTM and Strata Property Consultants had been opened with FNB and it also found that a significant amount of money held in CSTM’s trust accounts had been transferred into these FNB accounts.
The money was received from a number of body corporates that used CSTM’s services.
CSTM and Brown were ordered to pay the costs of yesterday’s court action. They are due to reappear in court on August 2 when the company and Brown can provide arguments for why they believe the Fidelity Fund certificate should be reinstated and why they should be allowed to operate the trust accounts.
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