Doors slam shut on cheats

2010-10-16 13:04

Buyers of homes will soon have better protection from unscrupulous ­estate agents who sell them houses without disclosing their defects.

The proposed bill – currently being drafted by the department of trade and industry (DTI) – will deal harshly with estate agents found guilty of misconduct.

The department intends tabling the draft bill before Cabinet within the next two months.

Andisa Potwana, DTI’s director of consumer and competition law and policy, said the department was reviewing the current legislative framework.

The purpose of the new law would, according to Potwana, ­improve the efficiency of the ­regulatory institution and the ­redress mechanism available for consumers.

“The proposed act would ­provide for an efficient and effective handling of complaints and prohibit unethical conduct on the part of estate agents. Estate agents would now be required to give upfront disclosure of any ­defects in the property whereas the current legislation does not,” said Potwana. The provisions of the new law are in line with the new Consumer Protection Act and other industry codes, he added.

Portia Mofikoe, head of marketing and communications at Estate Agency Affairs Board (EAAB), said the reform was long overdue as the Estate Agency Act was old and outdated.

“This legislation was promulgated in 1976 and no longer ­caters for the changing needs of the regulator, the industry and consumers. Though there have been minor amendments over the years these changes were not sufficient to ­ensure an effective regulatory ­regime,” she said.

She said the penalties imposed by the institution’s disciplinary committee no longer served as a deterrent for misconduct.

Estate agents who were guilty of misconduct could be fined a maximum of R25 000.

Potwana said the new law would establish a strong enforcement mechanism.

He said the department was looking at establishing an independent body to investigate cases of misconduct which would have the power to mete out harsher penalties. An appeals body would also be established to review decisions taken by the ­independent body.

“We are in talks with the ­National Consumer Tribunal to see what role it could play, but no finality has been reached,” said Potwana.

He said this would also address problems associated with the ­impartiality of the EAAB in ­adjudicating complaints.

The Institute of Estate Agents of South Africa (IEASA) welcomed the move to reform the sector.

Pam Snyman, chief operating officer at IEASA, said the review of the current regulations would cover all roleplayers in the property industry?– not only estate agents but also developers and property ­managers. She said that consumers would certainly ­benefit from the protection.

“This new act is bound to ­provide better consumer protection as it is being drafted in ­conjunction with the Consumer Protection Act.”

Estate agents were required to comply with the ­IEASA and EAAB codes of conduct, which prohibited members from concealing or misrepresenting when selling property. However, people who sold properties they had bought on auctions or private sales were not regulated by the current law.

» Consumers can contact the EAAB at 011 731 5600 to lay complaints against ­estate agents

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