EAAB report tarnishes real estate industry, say associations
Pretoria - The two associations representing the real estate industry in South Africa have welcomed the inspections of estate agencies by the Estate Agency Affairs Board (EAAB), but slammed the board for tarnishing the image of all the firms it inspected.

The EAAB reported last week that inspections of 11 of the biggest estate agency firms in Johannesburg, Cape Town and Pretoria, conducted by the board in conjunction with the Financial Intelligence Centre (FIC), found that none of them was fully compliant with the Estate Agency Affairs Act.

It said two agencies were served notices to close down their businesses. The mismanagement of trust accounts was a common trend.

The inspections identified "many suspicious transactions" that would be subjected to further investigation by the FIC.

Eskel Jawitz, the chairman of the National Association of Real Estate Agencies (Narea), said yesterday that it welcomed the fact that the EAAB was monitoring the industry. He stressed the importance of the industry operating at the highest professional level.

"The basic cornerstone of the industry is that trust accounts are sacrosanct and must be operated according to the highest business standards," Jawitz said.

But he added that Narea was "more than a bit surprised" at the way the board had publicly released the information about the inspections, which took place in November and December.

Jawitz Properties was told it would be given a report on the audit. But now, six months later, the agency had not heard anything from the board, while the names of the estate agencies were "almost specified". The inference was that "we are guilty until proven innocent".

"Given the ongoing problems with the board, I don't think they must make blanket statements that promote rumours that are mostly unsubstantiated," he said.

"Most of us believe our trust accounts are in order.

"There might be technical issues that we were not aware of, but if there are, we should have been told about them properly instead of reading about it in the press. We're all tarnished and yet we don't know where we are non-compliant," Jawitz said.

Willie Marais, the national president of the Institute of Estate Agents of SA (Ieasa), said the group was quite excited that the board was conducting inspections again after they were stopped in the 1980s.

It was "wonderful" that the EAAB had caught two companies involved in gross mismanagement of trust accounts.

But he expressed surprise that the board had not released more information about these two companies. The message from the board was that nobody was "squeaky clean", but Ieasa got the impression that the non-compliance was not related to "substantial stuff".

It seemed the board wanted to "tar the whole industry".

"That is not fair of a regulatory body," Marais said. "If that is the case, the board must tell us what is wrong.

"Estate agents were regarded just better than second-hand car salesmen and now we're worse than that. A couple of reports like this damages ... the industry. It will take years to repair the integrity and good name of the estate agent industry."

Article by: By Roy Cokayne - www.busrep.co.za