Illegal estate agents due to a lack of proper industry regulation

The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally. 

Jan le Roux, Chief Executive of Rebosa (the Real Estate Business Owners of South Africa) questioned these figures and wants to know what the EAAB is doing about the issue.

Le Roux says, “This is obviously not a justifiable deduction; ten years ago – in 2007 – was before the credit crunch and the real estate industry in South Africa and worldwide was thriving. It is likely that there could be as many as 40,000 operators today, leaving a possible 10,000 illegal operators – still an astounding and unacceptable number.”

The board’s spokeswoman, Margie Campbell promoted the PrivySeal concept in terms of which all agents must incorporate a link to PrivySeal in their communication which enables consumers to instantly check the agents legal standing. “Rebosa is in support of this concept and has been cooperating with Mr Stephen Logan of PrivySeal from the outset,” says le Roux.

“Good as this concept is, it is however a First World solution to a Third World problem. It is very likely that thousands of the illegal operators don’t use email and therefore cannot and won’t display PrivySeal. Consumers therefore will not be able to verify via PrivySeal. They could do so on, but only if they have the full names of the agent in question. This is hardly ever available, rendering the EAAB option useless. It is unfortunate that Mrs Campbell put this forward as a solution to a massive problem without addressing the real issues,” says le Roux.

Campbell remains quiet about what the EAAB is doing about the thousands of illegal operators despite many of them being reported to the EAAB on a regular basis. Le Roux believes that; “Through PrivySeal the onus is placed on the consumer to be aware – which is good – but the EAAB cannot escape its responsibility as the regulator to take steps against illegal operators and prosecute same. That is what regulators are for.”

Lawyers operating as estate agents are becoming a new phenomenon. Lawyers are, in terms of the Estate Agency Affairs Act, exempt from having to qualify as estate agents and can operate in the same way provided they do so under the legal firm’s name, from their premises and in the normal course of business. It however appears that many of them have started real estate concerns under different names and employ unqualified individuals to work for them.

“This has also been reported to the EAAB on many occasions without tangible results,” says le Roux, “We do hope some action will be taken as a matter of urgency. One of the main obligations of the EAAB is to protect the public and one can only hope that the regulator will act more forcibly against illegal operators in all spheres.”

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