There is far more wrong with the Estate Agency Affairs Board than indicated by the sudden resignations of chairman Linda Nyembe, deputy chairman Valencia Mazibuko and, possibly, three other board members.
They left after receiving a report following a forensic audit by KPMG, ordered by new CEO Nomonde Mapetla.
The report has been kept under wraps since July while trade & industry minister Mandisi Mpahlwa ponders what to do with it.
Insiders tell the FM it discloses abuses ranging from false expense claims to irregular promotions and the sale of paintings by the board at five times their value.
Some of the alleged practices go back to previous boards.
The board has not been able to play its full role in the property charter and an industry in desperate need of change.
This despite legislation giving it the power as long ago as 1998 to transform the estate agency business and enlarge the residential property market.
And it had the money to ensure these modifications took place - about R400m, mostly from compulsory fidelity fees of R150 /year paid by registered estate agents, of which there are 65 000 .
The board has done little more than collect the funds, deal with complaints by consumers about estate agents misappropriating their money, and issue regular statements on estate agent ethics or the lack of them.
When US-trained development economist Mapetla joined the board last year, she found a gravy train going nowhere.
Jan le Roux, chairman of the PA Group, the industry's largest service company, describes the board as "hugely overstaffed for its primary purpose of issuing agents' fidelity fund certificates".
Yet the main complaint against the board is late delivery and nondelivery of fidelity certificates, without which agents can't do business.
And no wonder: many staff members were incompetent. For instance, one filing clerk was unable to read or write. Mapetla disagrees that the board was overstaffed.
"It was wrongly staffed with people not suited to their jobs."
Now, she says: "We are satisfied that action has been taken to rectify the financial irregularities that were found, and further disciplinary action will be implemented in terms of the Public Finance Management Act."
Mapetla has the ideal background for taking the board beyond the fidelity fund and expanding the 1,5m-home residential property market to include 6,5m historically disadvantaged owners.
Section 12b was added to the Estate Agency Affairs Act in 1998, giving it the power to make grants from the fund for research, promotion and the education of millions of inexperienced home owners regarding the buying and selling of property. This huge task has been omitted from the property charter - despite it being the most obvious route to empowerment in the sector.
When the FM interviewed Mapetla earlier this year (People April 29), she appeared reserved until she got onto the topic of development economics.
She was eager to launch the board into this role. And she has made some progress, funding new agency organisations and involving people in the property charter.
The department of trade & industry will be responsible for appointing new board members.
But Mapetla should not be too positive about this solving her difficulties. The department does not have a good history of ensuring proper governance in organisations under its care - witness the constant changes in the leadership of the National Empowerment Fund and ongoing problems at Khula Enterprises. Despite having oversight of the board, it was clearly unaware of anything being amiss until the forensic report was handed to it.
Will Mapetla be able to clean out the board enough to transform the estate agency industry and the property market? Le Roux is confident, but other industry leaders are not, unless a powerful chairman supports Mapetla .
Le Roux says the 15-member board has only five estate agency members.
"This strips it of meaningful representation," he says, "and it has been further limited by not drawing from senior agents of national standing."
Members are appointed for three years, which Le Roux links to "the protracted lack of industry initiatives, particularly in forceful and progressive empowerment policies".
It would be unwise for trade & industry to overload the board with estate agents, who have a history of empire-building. But a decisive board can transform the industry and expand the property market so that it swiftly benefits ordinary South Africans.
