A reader who used an agent to handle a property he rents out wants to know how he can recover the deposit after the agent “disappeared”.
The landlord believes the agent did not do a satisfactory job and was in breach of contract because it seems he failed to conduct inspections, deal with complaints from the tenants and implement annual rental increases.
See the reader’s question here.
He eventually issued a final written warning to the agent, monitored the situation and terminated the contract when things did not improve.
Following the cancellation of the contract, the reader asked the agent to return the deposit to the tenant or pay it into the account of the new agent.
His request seemingly fell on deaf ears and he has been unable to get hold of the agent since then.
He has reported the agent to the Estate Agency Affairs Board (EAAB) but says nothing appears to have happened.
Now the tenants have given notice and they want their deposit from him, the landlord.
The Estate Agency Affairs Act provides the definition of an estate agent.
This is someone who, for his own profit or in a partnership, advertises that he, on behalf of any other person, lets immovable property.
He collects or receives any money payable on account of a lease of immovable property or any business undertaking.
The act makes provision for a fund to be established from which all claims allowed or established against the fund may be paid.
In accordance with the provisions of section 16 of the act, every estate agent is required to apply for a fidelity fund certificate, which allows a person to act as an estate agent.
Section 26 confirms that no person shall perform any act as an estate agent unless a valid fidelity fund certificate has been issued to him or her.
The act also states that every estate agent shall open and keep one or more separate trust accounts.
These accounts shall contain a reference to this section with a bank and the estate agent must deposit all trust money received into the accounts.
The name of the bank and the number of each trust account shall be notified to the board.
Although the reader has approached the EAAB, it is not clear what complaints were made.
For instance, our reader may have merely lodged a complaint with regard to the conduct of the agent or he may have lodged one in respect of the money ostensibly misappropriated by the missing agent.
The act does provide that the fund established shall be used to reimburse persons who suffer pecuniary loss by reason of theft of trust money by an estate agent.
It is clear that an estate agent carries a fair amount of responsibility in dealing with the money of a third party.
It is not clear whether or not the agent concerned held a fidelity fund certificate or whether the reader made enquiries in this regard.
But, as in many instances, it is possible that the reader merely took the agent at his word.
The reader is entitled to lodge a claim for consideration under the act and should do so as soon as possible.
Additionally, as the act also criminalises behaviour and non-compliance, the reader could approach the South African Police Services to lay a charge.
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