Watchdogs who vowed last year to stamp out back-hander deals, in which lawyers buy lucrative conveyancing work, have begun to bare their teeth.
In the last two months, four Gauteng and two Durban attorneys have been fined for obtaining work from banks, bond originators or estate agents in return for cash.
An Alberton attorney was fined R30 000 and sentenced to 120 hours of community service last week for buying work through a relative who was employed by a bank to allocate bonds.
The latest crackdown follows a commitment made late last year by legal experts and property regulators to root out kickbacks paid in exchange for work. This is a practice, critics claim, that robs the consumer.
Conveyancing fees, which cover the transfer of the registration of ownership of a property and bond registration, would amount to about R4500 on a R250 000 house and R12 000 on a property worth R1-million.
Unethical collaboration between attorneys and property agents cheats consumers because:
Home buyers lose the freedom to choose their own attorney;
Attorneys linked to agents forfeit their independence and compromise their duty to advise their clients impartially;
Companies that pay backhanders cant afford to offer discounts to their clients;
The huge volumes of work generated for a few law firms by backhanders compromise their work and service standards; and
The few law firms that can afford to pay backhanders can corner the conveyancing market.
The Estate Agency Affairs Board is investigating 12 complaints related to kickbacks.
Three disciplinary hearings have already been held and two Gauteng estate agents have been fined R2 000 each.
The boards legal manager, Clive Ashpol, said that it would take disciplinary action against any estate agent found guilty of unethical conduct. The board can impose a fine of up to R25 000 per count of misconduct.
Durban attorney Gavin Gow, spokesman for Conveyancers for the Citizens, an anticorruption pressure group representing 60 law firms across South Africa, said he was pleased with the penalties handed down so far. The group would continue to lobby against offending attorneys, he said.
A landmark judgment related to a leading Cape Town law firm that allegedly solicited business from estate agents is pending in the Cape High Court.
The application by the Cape Law Society for the suspension for three years of Andre Berrange, director of the Wynberg branch of Buchanan Boyes Attorneys, was made last September.
And two weeks ago conveyancing partners Manette Strauss and Eric Meyer of Durban firm Strauss Daly were found guilty by the KwaZulu-Natal Law Society of channelling almost R400 000 to estate agents in the Maxprop Countrywide property group to secure conveyancing work between 2001 and 2002 .
Business Times
Publisher: Business Times
Source: Inet Bridge
