By Property Writer
Cape Town – The embattled and long-troubled Estate Agency Affairs Board (EAAB) is facing the wrath of the law and government in what can only be described as a bad start to the month for the regulatory body.
Not only is it facing a forensic audit but also a legal battle to try and force it to issue outstanding Fidelity Fund Certificates to qualified agents.
Earlier this week, Minister for Human Settlements, Water and Sanitation Lindiwe Sisulu, in a “powerful demonstration of support for the property industry”, ordered a forensic audit of the EAAB.
The audit, says Tony Clarke, chairman of the Real Estate Business Owners of South Africa (Rebosa), could “become the catalyst needed to transform the EAAB into the positive force it was supposed to be”.
And, today, Rebosa had its day in the High Court in its attempt to legally force the EAAB to, amongst other things, issue all outstanding FFCs to qualified agents.
Clarke said having “exhausted all other options to rectify ongoing service delivery issues” from the EAAB, Rebosa had to "officially engage in this legal action against the regulator, signalling much needed hope for hundreds of estate agents around the country still struggling to get their FFC’s for 2021”.
The judge in the matter did not give a date for the outcome of her deliberations, but it is hoped that it could be as soon as next week.
The outcome is urgent with the Property Practitioners Bill coming into effect next month and it being stipulated attorneys will be prohibited to pay an agent without first checking that the agent has a valid FFC.
“Presently without current FFCs,” says Clarke, “qualified property practitioners choose between committing a criminal offence by working as usual, or not earning a single cent in income until the EAAB gets its act together. It’s an untenable situation. Resolving it must be our primary focus for now. After that, we can, among other things, alleged non-performance.”
The regulatory body has also been accused of failing to deliver on its mandate of regulating, maintaining and promoting the standard of conduct of estate agents.
Meanwhile, Clarke has welcomed the minister's forensic audit into "the regulators consistent inability to fulfil their mandate” and “we are grateful to have this support as we continue to fight for the rights of real estate professionals”.
The scope of the forensic order will look at the past two years and will include :
- An Audit of the Estate Agents Fidelity Fund, including all transactions and investments done and processes followed;
- Appointment of the EAAB staff and processes followed;
- Tenders awarded by the EAAB and procurement procedures followed; and
- All legal matters attended by the EAAB and how they were paid.
Rebosa is hopeful the forensic audit will “finally reveal the root of the regulatory body’s service delivery issues which have persisted despite costs of over R1.5 million which Rebosa incurred for salaries of people placed at the EAAB to assist with Rebosa member queries.
“We hope that the minister will allow transparency in its audit findings and make such available to Rebosa.”
Clarke added Rebosa “wholeheartedly supports the intended role of the EAAB in implementing the Estate Agency Affairs Act and promoting better transparency, disclosure, accountability and governance in our industry’’.
“In its current form, however, the regulator is effectively achieving the exact opposite.”
The EAAB has been approached for comment, which was not available at the time of this story going live.
* This is a developing story and will be updated should comment be received.