Almost 10 000 estate agents in South Africa are operating without the mandatory Fidelity Fund Certificates (FFC) according to the Estate Agency Affairs Board (EAAB), which has granted a 3-month amnesty period to agents who are operating illegally.

According to EAAB chairman Thami Bolani, the industry needs to clean itself up amid allegations of widespread mismanagement and non-compliance among the 27 000 practicing estate agents in the country.

The EAAB statistics show that there are a string of non-compliance cases that have been brought to its attention including:

- 12 cases where trust account details are inconsistent, a further 10 where trust accounts are not designated and one case of an estate agent not operating a trust account at all.

- Six agencies have not performed or completed a financial audit within the prescribed time when two agents have invalid FFCs, 21 have invalid non-principal FFCs and two principals have invalid FFCs.

- In total there are 93 cases being investigated by the EAAB relating to non-compliance of the Estate Agency Affairs Act by individual agents or estate agencies.

Furthermore two additional cases of misconduct have been levelled against Constantia Sectional Title Management (CSTM) in Johannesburg and Dusty Moon Investments trading as Seeff Klerksdorp. The EAAB says that it is following up on allegations of substantial shortfalls in the trust account of Dusty Moon Investments.

Meanwhile Seeff Properties says that it withdrew its franchise when it became apparent that Dusty Moon was not managing the franchised estate agency properly.

The EAAB says that the alarming nature of the allegations against Dusty Moon necessitated its immediate intervention and the outcome of the investigations is being awaited.

In the case of CSTM, the EAAB says that it launched a comprehensive investigation into this company following allegations of improprieties in the firm’s conduct. No further details on this matter were provided in the EAAB statement.

The EAAB has completed 34 inspections of estate agencies so far this year with 14 in Gauteng and 10 each in KwaZulu-Natal and the Western Cape. According to the report it compiled so far, it found that trust account details were inconsistent and that agents were operating without the necessary FFCs.

The EAAB points out that it is a statutory offence for agents to practice without a Fidelity Fund Certificate and that if they do, they are not entitled to any remuneration for any estate agency services rendered.

The granting of amnesty to agents by the EAAB has been made provisional and is based on agents or estate agencies making a full and frank disclosure, in the form of an an affidavit, by those applying for amnesty.

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