Grave concerns expressed by estate agency industry



The Estate Agency Affairs Board (EAAB) has expressed grave concern at the position into which the estate agency industry has been thrust as a result of Saambou Bank's placement in curatorship. Reacting to the development Stanley Moshidi, CEO of the Board said that estate agents now found themselves in a similar position to the attorneys' profession with regards to trust funds held at Saambou. As a consequence the board had received a multitude of queries from affected estate agents. "The problem", he said, "essentially lies in the fact that monies held by estate agents in their trust accounts with Saambou do not belong to the estate agents themselves but are held by them for and on behalf of other persons. The current situation means that sales and other transactions which should have been finalised have now been frozen which has led to intense dissatisfaction and unhappiness by buyers and sellers of properties." The Estate Agency Affairs Board Act 112 of 1976 makes it obligatory for estate agents to open properly designated trust accounts with banking institutions and to use these for all monies held or received by them on behalf of buyers and sellers of properties. Moshidi urged Mr Johan Louw, the appointed curator of Saambou Bank, to resolve the current situation as a matter of urgency and to keep all stakeholders, including the Department of Trade and Industry, informed of developments. Bill Rawson, chairman of the IEASA Western Cape, expects the placement in curatorship of Saambou to send tremors throughout the real estate industry. Apart from transfer dates and financial settlements being delayed as a result of frozen accounts he says transactions dependent on Saambou financing could seriously affect "chain" sales. "All it needs is just the collapse of one Saambou financed sale in the process and it could have a snowball effect on all other sales in the chain." Another serious scenario advanced by Rawson is that of a Saambou bondholder funding the homeloan from a now frozen current account, which would mean the client, defaulting on bond repayments and in potential breech of the mortgage contract. Article: Rodney Hayter - Property Professional Online Email: hayter@icon.co.za