The importance of the choice of a certified estate agent when buying or selling a property is evident in the experience of our reader who recently sold her house.
After a poorly handled transaction, which left all parties aggrieved by the estate agents’ unprofessional conduct, she found out that not only were the agents candidate agents who operated without the supervision of a qualified agent or principal, but they also did not have Fidelity Fund Certificates.
The reader was told that copies of the two agents’ certificates would be faxed to her. This never materialised.
She then contacted the Estate Agency Affairs Board (EAAB), which, upon investigation, established that the two agents in question were not certificate holders.
According to the reader, the Estate Agency Act clearly states that in such a situation no commission is payable to the agents or agency.
The reader’s problem is that her attorney is of the opinion that she (the attorney) is bound to her undertaking to pay the estate agents’ commission upon completion of the transaction. The attorney has now agreed to keep the money in trust until the matter is resolved.
The EAAB’s legal department subsequently contacted the attorney to point out that completing property transactions without a valid Fidelity Fund Certificate is in fact a criminal act punishable by law.
The reader was advised, by a third party, to lodge a complaint with the Cape Law Society against her attorney, as well as sue her for her money (the would-be commission), since she would probably not pay out the money unless a judge ordered her to do so.
According to Property Poser’s legal experts, the Estate Agency Act clearly states that no person may practice as an estate agent unless he is in possession of a valid certificate. The power to issue and withdraw certificates vests in the EAAB.
In terms of section 26 of the act, no person may perform any act as an estate agent unless a valid Fidelity Fund Certificate has been issued to him and to every person employed by him as an estate agent. A contravention of this provision is an offence.
Under the act, no estate agent may receive commission on a transaction concluded by him during a period in which he had failed to comply with the provisions of the act.
The aim is to bar an estate agent from claiming commission on a transaction during a period in which, for example, one of the estate agents in his/her firm was not in possession of a certificate.
The law further states that any person acting as an estate agent without the required certificate can be prevented from doing so by means of an interdict issued by a court.
There is no prescribed form in which a claim against the board in respect of the Fidelity Fund must be lodged.
In practice, the board requires that the claim must be accompanied by an affidavit, which sets out the circumstances giving rise to the claim. Supporting documents such as proof of payment and a copy of the contract of sale must also be furnished.
Provided the claimant gives the board written notice of his claim within three months after he became aware of the circumstances giving rise to his claim; and he furnishes the board with the required proof within six months after being asked to do so by the board, the board must receive the claim.
At this stage the board will consider the merits of the claim and will decide whether or not the claimant must exhaust all available legal remedies against the agent/s involved and against all other persons liable for the loss.
Should the board decide that the claimant need not take such steps, the board must settle the claim if it is clear that the fund is liable to pay compensation.