South African Property News

Should the EAAB go?

An article on the Property24 website has reported statements made by a leading South African real estate group that call for the Estate Agency Affairs Board (EAAB) to be scrapped and to be allowed to revert back to “self-regulation”.

The call from RE/MAX Southern Africa comes after much public criticism of the EAAB by other real estate industry members, particularly the Institute of Estate Agents of South Africa (IEASA). The allegations all focus on the EAAB as incompetent; never responding to phone calls and failing to issue fidelity fund certificates timeously, if at all.

By law, estate agents are required to be in possession of a valid fidelity fund certificate before they can claim commission. These certificates are issued on an annual basis. The CEO of the EAAB, Nomande Mapetla vehemently denies any allegation of incompetence, stating that agents are being unscrupulous and the Board’s efforts to “clean up the industry” are being resisted by estate agents.

Marketing and finance director of RE/MAX Southern Africa, Jeanne van Jaarsveldt has accused the EAAB of failing in its mandate as a public protector and also in its attempts at “gearing up the industry’s professionalism”. Mapetla’s claim that fidelity fund certificates are issued in time is also refuted, with van Jaarsveldt pointing out the fact that in June 2006, Mapetla publicly admitted that criticism of the Board’s under-performance was to some extent justified, particularly in terms of servicing the industry and dealing with customer inquiries. “Sadly, the situation since then has barely improved and I have serious reservations that under its present stewardship it will get better” (Van Jaarsveldt). Mapetla refutes this, saying “I find her remarks offensive to our professional integrity and unbecoming of a person in her leadership position,” calling upon her to substantiate her claims.

Van Jaarsveldt has recently returned from a RE/MAX International gathering in the United States and believes that the local real estate industry has indeed reached a high level of professionalism when compared to other countries, but that this is “through no fault, or encouragement or even support of the EAAB”. She believes that the industry would be better served if the Board was deregulated and disbanded.

A factor enabling self-regulation is the newly emerging Institute of Estate Agents (IEA), which has lately absorbed the National Association of Realtors (NAREA). This has resulted in a powerful industry presence, which given the strength of this revitalization will now be able to “promote and guide a deregulated industry”. Although some 80 000 estate agents were registered with the Board in 2007, the “cleansing process” and “soft market conditions” are expected to reduce the number of active agents to just 35 000. This would make the local industry one of the fittest and most professional South Africa has seen, which is “good news for both the consumer and industry”.

The information in this article is courtesy of District Mail (Property24) (“Board must go,” says RE/MAX, News24, 4 April 2008).

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