Probe into estate agents board hailed

Real Estate Business Owners of SA has welcomed a forensic probe into the Estate Agency Affairs Board (EAAB). The probe follows criticism of the EAAB’s record in regulating an industry that oversees about 46,000 agents and 5,000 firms nationwide.

A non-profit group that is the largest representative body of estate agents in SA, Real Estate Business Owners of SA (Rebosa), has welcomed a forensic probe into the Estate Agency Affairs Board (EAAB).

Jan le Roux, CEO of Rebosa, which is taking legal action against the EAAB, said the audit called for by human settlements, water & sanitation minister Lindiwe Sisulu was a positive step towards resolving the EAAB’s long-standing problems.

“This is a step in the right direction. We hope that this is a result of our legal action as the minister was sued as part of our court action and she decided not to participate. In other words, she will abide by the decision. So she is fully aware of the court action, and has been since its inception. I believe the alarm bells and stuff is beginning to happen,” Le Roux said.

LEGAL CHALLENGE

The probe follows criticism of the EAAB’s record in regulating an industry that oversees about 46,000 agents and 5,000 firms nationwide, as well as Rebosa’s legal action.

Last month, Rebosa launched a legal challenge against the EAAB because of its failure to issue operating licences timeously.

Rebosa maintains it is acting on behalf of about 46,000 agents who have not been issued their Fidelity Fund Certificates (FFCs) for 2021, claiming that the EAAB has not only failed to deliver on its mandate of regulating, maintaining and promoting the standard of conduct of estate agents, but also that it has become a hindrance to their ability to conduct business in accordance with the law.

SA estate agents need to have valid FFCs to sell properties legally.

Le Roux’s comment comes after EAAB chair Nkosinathi Biko responded to a letter by Sisulu in which she instructed her department to probe the board, after the state-owned entity was taken to court by Rebosa.

Biko had said the EAAB noted the minister’s decision to instruct the department to conduct a forensic audit of the entity.

“The board wants to assure all stakeholders that it welcomes the minister’s decision, will fully co-operate with the forensic audit and has, in fact, reached out to the director-general to move the matter forward,” he said.

EAAB CEO Mamodupi Mohlala-Mulaudzi told Business Day in February that Rebosa wanted to draw attention away from bigger issues such as transformation and that only a handful of agents had not received their FFCs. It was an administrative error, she said.

In the letter, dated March 1, Sisulu said the scope of the forensic audit will cover events that occurred in select areas over the past two years.

First there would be an audit of the Estate Agents Fidelity Fund, including all transactions and investments done and processes followed.

The appointment of EAAB staff as well as tenders awarded and procurement processes followed will be investigated.

All legal matters attended to by the EAAB and how they were paid would also be interrogated.

AUDIT FUNCTION

The minister asked for co-operation for the audit and said its cost will be for the account of the EAAB.

Biko said that in 2018 the board “sought the minister’s concurrence in taking the audit function to the auditor-general, the public auditor of last resort.

“Accordingly, the auditorgeneral has now been our auditor for the past two financial years,” he said.

“This decision by the board was designed to improve the accountability of the institution and to be able to provide improved assurance to the public,” said Biko.

“The board is yet to be furnished with the minister’s reasons for instituting the forensic audit, and therefore cannot comment on the matter at this time. The board will await further instructions from the minister. All further queries in this regard are thus directed to the office of the minister,” said Biko.

Meanwhile, Rebosa said its case against the EAAB was heard on March 5 on an urgent basis and the outcome was expected this week.

WE HOPE THAT THIS IS A RESULT OF OUR LEGAL ACTION AS THE MINISTER WAS SUED AS PART OF OUR COURT ACTION

Jan le Roux CEO of Rebosa