Estate Agency Affairs Board bans 'dubious' Home Owners Association practice

The Estate Agency Affairs Board has outlawed a practice by many homeowners associations (HOAs) in residential security estates whereby they ask estate agents to pay “accreditation fees” in return for exclusive rights to market properties in the estate. This ends a dispute between estate agents and the Institute of Estate Agents of SA, and HOAs, dating back to 2009. In terms of a recent practice note it published, the board also outlawed the HOAs' practice of:

 ⊗ Restricting homeowners to using “accredited” estate agents and imposing penalty levies on those who did not
 ⊗ Claiming a percentage of the “accredited” estate agents’ commission

Bryan Chaplog, chief executive of the Estate Agency Affairs Board, said in the practice note that these actions by HOAs contravened the Estate Agency Affairs Act. He said that estate agents who pay “accreditation” fees to HOAs or perform any act impairing the integrity of the profession may be subjected to disciplinary action which may result in them being liable for a fine of up to R25 000 or an appropriate sanction prescribed by the Estate Agency Affairs Act.

Business Report, IOL Property News - 28 May 2014