Board ‘needs more regulatory power' over Estate agent

Posted On Monday, 14 March 2011 02:00 Published by eProp Commercial Property News
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The regulatory powers of the Estate Agency Affairs Board needed to be strengthened so it could govern the industry more effectively, Department of Trade and Industry acting director-general Lionel October said on Friday.


Lionel OctoberThe board is responsible for regulating estate agents, ensuring that they register and operate with a valid fidelity fund certificate to ensure the protection of consumers. It also conducts inspections to ensure compliance as it did recently in the case of estate agent Wendy Machanik, who allegedly dipped into her clients’ trust account to keep her business afloat.

“There are many things which we would like to do in the industry which we cannot,” Mr October told the National Council of Provinces select committee on trade and international relations.

The board itself is re-engineering its processes and plans to place the function of inspections, which it outsourced to four independent operators, in-house. The intention was to ensure greater effectiveness.

The board also sought to improve its poor customer service and to make its whistle-blower hotline more effective, board chairman Thami Bolani said.

He expressed concern over the low level of transformation in the property industry, noting that only 6% of the estimated 46000 operating estate agents were black. The board was busy developing a transformation policy, as well as a transparent policy on inspections, investigations and registrations.

Another initiative planned was to give unregistered estate agents — estimated at between 5000 and 10000 — an opportunity to register over a three- to six-month amnesty period starting in April.

The board would also launch an intensive education drive to create awareness of its role.

Mr Bolani said the board was liaising with banks, the South African Revenue Service and the Deeds Office to ensure that it was impossible for unregistered agents to operate. Unscrupulous, unregistered agents were responsible for most of the estimated R5m worth of claims against the board’s fidelity fund by defrauded consumers.

Committee member Freddie Adams questioned the wisdom of an amnesty, saying those who were breaking the law should be dealt with and should not be allowed to operate. However, Mr Bolani said that not all unregistered agents were unscrupulous. Some would be helped to legalise themselves.

Mr Bolani was constrained by the court case under way between the board and former CEO Nomonde Mapetla. She says she was unfairly dismissed, with the board saying it was merely the termination of a fixed-term contract.

The department would abide by the court’s decision, said Mr October. But he said the department had launched an independent audit to ensure the board was performing its duties and not abusing its powers.

Mr October said Trade and Industry Minister Rob Davies wanted to assure himself that Ms Mapetla had not been dismissed for threatening vested interests in the industry that were intent on maintaining the status quo.

Mr Bolani sought to assure that the dismissal had nothing to do with the probes into major estate agencies, which the board itself had initiated. “It is purely a labour issue. It has nothing to do with politics.”

Last modified on Tuesday, 11 March 2014 18:27
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