Before property buyers or sellers start dealing with an estate agent, they should check whether he or she has a current Fidelity Fund Certificate (FFC).
If the agent does not have this certificate, he may be operating illegally. It could mean that the agent is not registered with the Estate Agency Affairs Board (EAAB) and is therefore not entitled to practice as an estate agent.
“Without an FFC”, says Bill Rawson, chairman of Rawson Properties, “the estate agent is not entitled to claim commission on a sale – but, although the law is clear on this matter, many people have been getting away with commission earning despite not being EAAB registered. To date policing in this regard has not been rigorously enforced, but it will probably become more strict in the year ahead.
“One reason for certificates not being issued,” added Rawson, “could be that the agency has failed to submit an annual audit of its accounts within four months of its financial year-end. This in turn, may be because the agency has not opened an interest-bearing trust account with a bank into which deposits from clients have to paid. Alternatively, they might have such an account but may be handling it inefficiently or unethically.
“The lesson,” said Rawson, “is therefore clear: if the client discovers that the agent is operating without a FFC he should lodge a complaint with the EAAB. However, before this drastic step is taken, warns Rawson, a further check should be made to find out if the agent has in fact applied for the FFC but has not received it. In certain cases, the EAAB has fallen behind in the delivery of its certificate.
“Any estate agent who does not have an FFC should be viewed with a certain degree of caution, unless they can prove that they have applied for it but not yet received it.”