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The EAAB clamps down on agent “accreditation”

Luxury home marketer Ronald Ennik has welcomed the decision by the Estate Agency Affairs Board (EAAB) to finally outlaw the payment by estate agents of accreditation fees to Home Owners” Associations (HOAs) for permission to market homes on their gated residential estates in South Africa.

“It’s great news for sellers in gated estates. At last they now have access to achieving best-possible sales prices for their homes in a free and open market.

“Agent accreditation has been a dubious practice ever since it was first applied in the 1990s, and I have been calling virtually ever since then for it to be scrapped,” says the founder and CEO of Christie’s International-affiliated Ennik Estates.

“Accreditation obstructs the free flow of market forces, and could thus impact negatively on homeowners’ return on the capital investment in their most precious asset – their homes,” he adds.

“However, outlawing the practice does not detract from the fact that HOAs exist for a purpose: They create and enforce rules, regulations, and codes that preserve and protect their estate neighbourhoods and the property values within them – which estate agents must adhere to and respect,” says Ennik.

EAAB Notice

A recent official EAAB notice declared as unlawful “the practice of requiring estate agents to pay accreditation fees in return for the exclusive marketing of properties situated within HOAs” – stating that it contravenes the Estate Agency Affairs Act, 1976.

The notice cautions that both estate agents and HOAs involved in accreditation will face legal consequences in terms of the Act.

EAAB CEO Bryan Chaplog says the notice was issued “in the interest of ensuring good governance within HOAs, and to ensure that estate agents operating within HOAs apply fair and lawful practices which promote the public interest generally.”

This action by the EAAB, says Ennik was tardy in coming. “But, now that it is here, it deserves warm applause – because it removes one of the most vexing barriers to best-practice and best-price sales in homeowner communities,” he adds.

“In the past, estate agents have been paying HOAs up to R20 000 a year – and often significantly more – for the privilege of marketing homes in their estates. 

“No matter how this cost was packaged – as a straight fee; a sales levy; or enshrined in title deeds – it always had a feel of ‘tenderpreneurship’ about it. 

“Good riddance!” 


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  • Hannes Hendriks - posted 30 Jun 2014 07:22 AM                                    

    I find it vary strange that the EAAB is of the opinion that they regulate the affairs of HOA's.
    HOA's are regulated by the Companies Act, their MOI and Rules and Regulations.
    The EAAB will have to come and explain incourt what "unlawfull" business practices the HOA's have been conducted

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