select
|

Trustees should choose a managing agent with a ‘big brother’

Another case of trust fund mismanagement by a sectional title managing agent has underlined yet again the advantages for trustees in appointing an agent who has the backing of a reputable national real estate group.

So says Jan Davel, MD of the RealNet franchise group, in response to the recent report of the Estate Agency Affairs Board (EAAB) concerning its investigation into Cripton Property Services and its principal, Catherine van Zyl.

The investigation followed a complaint laid with the EAAB by the body corporate of a Pretoria sectional title complex, and revealed that payments which Cripton alleged it had made on behalf of the body corporate to the City of Tshwane had in fact not been made; that records suggesting that Cripton had made certain payments to the City of Tshwane appeared to have been falsified and that there had been irregularities involving Cripton’s trust account.

The EAAB then secured a High Court order withdrawing the Fidelity Fund certificates of both Cripton and Van Zyl and preventing them from rendering any further services as estate agents or dealing in any manner with their trust accounts. A curator was also immediately appointed to take control of the trust accounts.

“Coming on top of the Constantia case, in which more than R18m worth of sectional title levies are believed to have been misappropriated, this is a most unhappy situation for the real estate industry,” says Davel.

“However, the swift action taken by the EAAB is encouraging, as it indicates that the actions taken by Human Settlements Minister Tokyo Sexwale to ensure the proper functioning of the board are having the desired effect.”

It is also fortunate, he says, that the agency in question was registered and in possession of a Fidelity Fund Certificate, which means the body corporate should in due course be compensated for any financial loss arising from its actions or those of Van Zyl.

“But prevention is always better than cure, and while I’m sure there are many superbly run independent agencies, a great number also appear to be completely oblivious as to what is required of them in many respects, especially with regard to the Consumer Protection Act, the National Credit Act, the FICA legislation and so on.

“In addition, the global recession of the past five years has had a significant impact on the SA property market and on estate agents’ cash flows. And while no policy or procedure can absolutely protect one from an estate agent who is determined to be fraudulent, the property management information systems, financial management and disciplines of a reputable franchisor can go a long way towards prevention.”

Davel says that RealNet conducts regular internal audits, and ensures that all its franchisees are fully compliant with all applicable legislation, regulations and the new industry training requirements.

“We do this partly to protect our trademarks and corporate reputation, of course, but primarily to provide clients like the trustees of sectional title schemes with more peace of mind because they know that there is a ‘big brother’ supporting and monitoring their managing agent.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK