The Estate Agency Affairs Board (EAAB) is being accused of failing to deliver on its mandate of regulating, maintaining and promoting the standard of conduct of estate agents, specifically in the issuing of Fidelity Fund Certificates for 2021.
The Real Estate Business Owners of South Africa (REBOSA) has turned to court action against the regulator, claiming it is in breach of its statutory duties according to Estate Agencies Affairs Act 112 of 1976, and is asking the court to order the EAAB to urgently issue the necessary certificates.
REBOSA, acting on behalf of hundreds of its members, claims the EAAB has "become an active hindrance to their ability to conduct business in accordance with the law".
“Having a current Fidelity Fund Certificate is an essential requirement for a real estate agent,” says Chairperson of REBOSA and MD of the Rawson Property Group, Tony Clarke. “To practice without one is to commit a criminal offence and forfeit any right to remuneration for your work. By failing to meet its legal obligation to issue FFCs to qualified agents, the EAAB is forcing property practitioners to either refrain from operating, indefinitely, or break the law in order to feed their families. This is unacceptable.”
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Rebosa says Failure to issue FFCs timeously has been a longstanding problem for the EAAB, with extensive backlogs plaguing their operations every year.
"Numerous appeals to the Minister and Director General of the Department of Human Settlements have been fruitless, and 2020’s lockdowns only exacerbated the situation. REBOSA’s attempts to assist the EAAB in addressing its service delivery failures over the last seven years include investing over R1.5 million of its funds into additional staff to assist the regulatory body. Inadequate service delivery is exacerbated by a prevailing lack of suitable technology systems within the EAAB.
“The processes involved in renewing FFCs are now archaic,” says Clarke.
“Things like manual allocation of payments lead to huge delays and countless errors. The extent of the problem has seen the number of queries lodged with the Board peak at 80 000 in an industry with only 46 000 agents.”
"The EAAB committed to upgrading its technology and systems in 2017. Action is only now being taken on this front.
“This systemic inertia has put the lives and livelihoods of thousands of real estate agents at risk over the years,” says Clarke. “We no longer believe the issue can be resolved without court action. The current implementation – or lack thereof – of the Estate Agency Affairs Act by the EAAB constitutes an infringement of the constitutional rights of real estate agents to choose and practice their profession freely. REBOSA will not hesitate at leveraging the full power of the law to see these rights restored to our members and all real estate professionals.”
“We would like to address the wider service delivery issues at hand, including challenges around CPD training, but our members can’t afford to wait for the deeper bureaucratic issues of the EAAB to be resolved before resuming operations,” says Clarke. “As such, our immediate goal is to enable these agents to keep working. From there, we can look to the broader problem at hand.”
While Clarke strongly condemns the EAAB’s inability to fulfil its mandate under the Estate Agency Affairs Act, he also confirms REBOSA’s continued endorsement of the legislation itself.
“REBOSA fully supports the role of the Estate Agency Affairs Act in promoting better transparency, disclosure, accountability and governance in our industry,” he says. “We simply need the legislation implemented effectively in order for it to have the desired effect.”
Property24 has reached out to the EAAB for comment and has yet to receive a response.
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