It’s not that difficult to find an estate agent. Although large numbers have either gone out of business or moved on to a more lucrative field due to the recession, there are still plenty around. So although it may not be a problem seeking out the services of a person who specialises in selling property, it may be slightly more difficult to find one that is working within the bounds of the law. The Estate Agency Affairs Board (EAAB) recently announced an amnesty period for agents who were practising illegally, noting that approximately 10 000 agents were currently operating unlawfully.
While this may seem of little consequence to the unsuspecting South African public, the dangers of dealing with an agent who is not registered with the EAAB are enormous. Estate agents, by the sheer nature of what they do, deal with vast sums of money – for this reason they all have to operate a trust account which must be audited on an annual basis to ensure that the books balance. An unregistered agent who is operating outside of the law may assure the buyer that he has a trust account, but the fact that no one is checking to ensure that the monies paid into the account are all accounted for, should set alarm bells ringing.
It is an easy exercise to check whether an agent is registered or not - simply asked to see a current copy of the agent’s Fidelity Fund Certificate. If the person with whom you are considering working with does not have this, move on and find someone who has the right credentials. There can be a number of reasons that an agent has not got a valid Fidelity Fund Certificate. The most common excuse is that the EAAB are slow in issuing this vital document. While this has been a problem in the past, the board does appear to have got its act together and is issuing the certificates timeously. While most South Africans have at some point experienced problems and have become frustrated with red tape, this is no reason to assume that what the agent is saying is true; if you have doubts, it may be a good idea to contact the board personally and check.
In order to practice as an estate agent, the person must be found to be fitting and proper to do so. There may well be a serious reason why the person that you have chosen to sell your property or with whom you are dealing when buying property is not legally able to do so. Interestingly enough, the authorities are so determined to stamp out illegal agents that it has been decreed that if a seller discovers that an agent is not legally registered with the board, then they are not liable for any commission owing on the sale.
Of course, not every agent who practises without the necessary documentation is a con artist who is going to run off with all your money. However, why take the risk? Trying to sort out a financial mess, once a property has been sold can be devastating for both the buyer and the seller. Our courts are backlogged with cases and trying to get your money back via the legal route could take years and cost a small fortune. Do the right thing and deal with the right person and the sales process should run smoothly; do the wrong thing and deal with the wrong person and you could end up losing a lot more than just your temper.