New provisions boost scope for estate agents


15-July-2004

Presenting the Estate Agents (Amendment) Bill 2004 to the National Assembly on Tuesday, Minister Joel Morgan of Land Use and Habitat said the government had deemed it necessary to amend the Act, first enacted in 1969, to render it more modern by updating its regulations to suit new development.

The Act was last amended in 1976.
 
The amendments made are mainly to do with the security given by an estate agent prior to registration, the medium advertising the sales of properties, the role of the Estate Agents Board, the publication of names of applicants for registration as estate agents and the qualifications needed for registration, the signing of a written contract between client and estate agent, the proper management of clients' money and the penalties for breach of regulations.

The Bill makes provision for an increase in the security provided by an estate agent prior to registration from R30,000 to R250,000. The payment can be made either through a professional indemnity insurance policy, a bond from a bank, a first line mortgage on immovable property or a cash deposit in the Treasury.

For a person to qualify for registration as an agent, he must have a certificate of practice in estate agency or a minimum five years' experience in such a field. 

In the case where a body corporate applies for registration, the director of that body should possess certain qualities such as good character, integrity and competence, that are also required of an individual applicant.
 
According to the amendments, the Estate Agents Board would have to give public notice of the entries and of the removals of names in the Estate Agents Register.

The Bill also states that every applicant who wants to register as an estate agent will have to give notice in the Official Gazette and in two issues of a local daily newspaper. 
 
The Bill further stipulates that it is mandatory for an estate agent and the client to sign a written agreement or contract prior to the employment of the agent. Provisions are also made to ensure the proper handling of client's money and for the opening and keeping of client's accounts and money. The Bill also prescribes the cases in which an estate agent should account for interest.

An estate agent, according to the Bill, can use any medium to advertise the sale of properties, including via the Internet.

Breaches of regulations are punishable by a fine of R20,000 and two years' imprisonment and a person practising without a valid registration is liable to the same punishment.

The members who intervened, including Honourable Rukaiya Jumaye, Annette Georges and Waven William, all spoke in favour of the Bill. They highlighted the fact that it was a positive step forward towards improving the professional and legal status of estate agents, by giving the profession more credibility and to protect public interest through greater transparency.

In his summing up address Minister Morgan clarified issues brought out by the members.

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