SA property legislation under review


A long overdue investigation into the laws governing the South African property industry is finally under way, on the instruction of the Department of Trade and Industry.

Various representative bodies have made submissions to the Department and Bill Rawson, Chairman of Rawson Properties, has joined them in sending through his proposals on improving the laws governing property transactions in the country.

Rawson suggests, firstly, that nine sub-categories of individuals dealing in property transactions be recognised. These would include commercial, industrial, agricultural, residential, letting, managing, developing and principal agents as well as business brokers. The advantage of having these property personnel in separate sub-categories, said Rawson recently, is that they would each be governed by a specific, specialised set of regulations.

The remainder of Rawsons proposals relate directly to the Estate Agency Affairs Board (EAAB), which is the consumer body which focusses on the conduct of South African agents.

Rawson suggests that the Estate Agency Affairs Board now work on a decentralised system with a functioning body in each of the provinces to handle the publics complaints and queries. This, he believes, would lift pressure off the main body who are currently 'bombarded' with calls every day and are often therefore inaccessible to estate agents and members of the public.

The national body, Rawson explains, should be made up of the directors of the regional bodies and the bulk of the administration should pass to these regional bodies.

He adds that the EAAB should foster dedicated estate agency professional bodies to help with the training of estate agents and consumer education generally. This, he says, would ensure that the training was of a high standard, based on international norms, and be ongoing.

Tackling the current problem that the Estate Agency Affairs Board is very slow in issuing Fidelity Fund Certificates (FFCs are by law essential for an estate agent), Rawson believes that it should start doing this on the anniversary of the applicants first application instead of trying to get all 70,000 certificates out in December.

In addition, if the fund offered protection only to agents with valid certificates this would place the responsibility on the consumer to check that his agent is in fact certificated. He therefore recommends this move, as the Fidelity Fund currently covers all estate agents, regardless of whether they have a FFC or not.

The EAAB disciplinary hearings, says Rawson, should not be run by other estate agents, but by a fraternity of conveyancing attorneys and the Board should pay the agents legal costs if the cases against them prove to be unsuccessful, as is done in all other South African court proceedings. (Currently agents are responsible for their own costs.)

Rawson also suggests that conveyancing attorneys should be made responsible for the holding of all property funding deposits in trust funds, thereby doing away with the residential agents trust accounts. This, he says, would eliminate expensive trust audit fees that many previously disadvantaged agents simply cannot afford.

'We have now,' says Rawson, 'to get away from a continual barrage of criticism levelled at the Estate Agency Affairs Board and work towards setting up a new system which all operating in the residential property sector will find satisfactory'
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