EAAB investigating reputable agencies for taking kickbacks

The Estate Agency Affairs Board (EAAB) is currently investigating complaints against two of the better known and more reputable estate agency firms involving kickbacks from conveyancers for passing on conveyancing work.

Disciplinary proceedings have already been instituted against these enterprises by the EAAB.

Further investigations of the same nature are also in the pipeline, according to EAAB spokesman Clive Ashpol, “and will be proceeded with once the necessary preliminary investigations have been duly finalised.”

Ashpol says the alleged malpractice relates to regulation seven of the Code of Conduct. The regulation states that agents are not permitted, without good and sufficient cause, to solicit, encourage, influence or persuade any party to a pending or completed transaction to utilise or refrain from utilising the services of any particular attorney, conveyancer or firm of attorneys.

The alleged malpractice falls within the purview of the Code of Conduct for Estate Agents in bringing the estate agency industry as a whole into disrepute, particularly where consumers are concerned.

Ashpol says both the EAAB and the Law Society of South Africa, view the practice of estate agents accepting inducements from conveyancers in return for the referral of conveyancing work in a most serious light.

“It is axiomatic that if estate agents were to cease accepting the inducements offered by conveyancers, or immediately report all offers of inducements that may be received to the relevant authorities, the problem would resolve itself. It certainly ‘takes two to tango’.”

He added that while conveyancers could be guilty of offering inducements in the first place estate agents were just as guilty for accepting them and perpetuating the unethical practice.

Although penalties for proven contraventions lie with the discretion of the committee of inquires, Ashpol says sentences can range from a reprimand to a fine of R25 000 per individual count to the withdrawal of the fidelity fund certificate of the party concerned

“Mitigating evidence and the facts underlying each individual case will obviously have to be taken into account as will any aggravating factors that may be found to be relevant.

Ashpol says the various law societies and the Board have agreed to do everything necessary, and to cooperate fully in a concerted endeavour to eliminate the identified scourge and work together in restoring both the image and credibility of the conveyancing and estate agency professions.

“As can be anticipated it has often proven to be difficult to secure the necessary evidence of the offence sufficient to discharge the burden of proof. The two cases referred to are, therefore, being treated as test cases. Should they prove to be successful it can be anticipated that further disciplinary enquiries will follow.”
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