Watchdog moves to crack down on wayward estate agencies

2011-01-13 07:05

In an apparent attempt to crack down on wayward real estate agencies and agents, the Estate Agency Affairs Board (EAAB) said it would conduct “a national investigation into 5 826 estate agencies and 28 000 estate agents”.

This comes after an investigation commissioned by the board revealed the alleged mismanagement of client trust funds by prominent estate agency Wendy Machanik Properties (WMP).

Last week, City Press reported that the investigation found that WMP’s chief financial officer, Bruce Bernstein, allegedly masterminded the scam by creating a fictitious account in the agency’s books called “Cross/Kline”, to which the sum of about R25 million was transferred irregularly.

According to a statement released by the EAAB yesterday, the board has appointed auditing firms SAB&T, Ernst & Young and G&G Chartered Accountants to conduct the nationwide investigation.

The EAAB’s spokesperson, Portia Mofikoe, said: “The auditors will perform random inspections on behalf of the board in all regions for 12 months, starting with transactions from November last year.”

She said the investigations would start with examining the validity of agents’ and agencies’ Fidelity Fund certificates.

Regarding WMP, it has now come to light that the board has made an urgent application to the Johannesburg High Court to prevent WMP from trading, as it alleges that WMP is not in possession of a valid Fidelity Fund certificate for this year.

Estate agencies and agents are, by law, required to hold valid certificates in order to operate.

If successful, the application – which is expected to be heard tomorrow – “could mean that WMP has to immediately close its doors”, the EAAB said.

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