IEASA National - News

What R100 per member bought us…   Article Date :30 Jul 2005 The reason why IEASA consented to the CC fine. A message from the President of IEASA. I would like to take this opportunity to share with you our reasoning for consenting to an administrative penalty following the Competition’s Commission’s investigation into the tariff of recommended fees published by the Institute of Estate Agents. As you know, last year the Competition Commission concluded that the Institute had contravened the Competition Act of 1998 by publishing tariffs. This conclusion, it bears mentioning, had also been reached in a number of highly reliable independent legal advisory opinions, which we as the Institute had obtained as part of the process of addressing the best way forward. Following this finding, we resolved, with the full support and co-operation of all the Regional Institute Boards, and after extensive consideration of all the avenues available to us - not to mention considerable, sometimes heated negotiation with the Commission itself - to consent to an administrative penalty, which would amount to R100 per member. This was a result, which, when weighed against alternative outcomes, we are confident was in the best interests of industry, as I will explain more fully. R100 per member bought us and our members immense savings in legal costs. The Commission is empowered by statute to investigate, suspend and fine each and every member as much as 10% of their earnings (which would have been calculated for the financial year 2003-2004). Each member would feasibly have had to enlist legal counsel to defend themselves, with no guarantee of success. Government has ample funding and resources to employ attorneys to see that kind of a legal battle through to its completion, however lengthy or costly it may be. Remember, it was sitting on a winning ticket. R100 per member also bought us, both as members and directors, considerable savings in time, energy and opportunity costs associated with fighting a complex and potentially protracted legal battle. It bears mentioning that the Commission has the power, should it so require, to summons before a tribunal each and every individual member. R100 per member further bought us the continued confidentiality of our members’ financial affairs and earnings. The Commission has sufficient power to requisition from our members and scrutinize whatever documents it would require to ascertain their income. The breach of confidentiality involved would have been immense as each agent’s earnings would become public information. Finally, R100 per member bought us, as industry, the continued reputability and integrity of our profession. The negative publicity associated with a lengthy industry-wide battle with a Government body set up to protect the consumer from anti-competitive practices would have been extremely damaging, if not crippling to our trade. I would like to take this opportunity to thank my colleagues and directors from all the regions of the Institute for informing and supporting our decision to pay an administrative fee. As directors of your Institute, these individuals spend a great deal of time trying to improve industry through their voluntary and unpaid work. We often do not publicize all the results of our work, as we are sensitive to running the risk of prejudicing certain people, organisations or Government departments. The result is that we do not always receive public recognition and credit for what we achieve on behalf of industry. However, our directors forego the opportunity of earning an income to invest of themselves in the protection, upliftment, and transformation of the industry, benefiting members and non-members alike. I would like to urge industry as a whole to keep an eye on the various issues that are likely to affect our industry. If I may sound a note of warning, all is not well in our industry, and I would like to encourage all our members and non-members to team up with us and take pride and interest in the industry on which we all rely. I cannot stress enough the importance of working together for the benefit of industry. I realise that many of you have businesses to run, as do many of our regional and national office-bearers, but it is in fact the continued viability of our businesses for which the involvement and co-operation of all of us is imperative. We would be biting the hand that feeds us if we continued to focus on the workings of our own businesses, to the exclusion of the workings of the industry as a whole. We have experienced a monumental upsurge in consumerism, consumer awareness, brand awareness and brand loyalty in recent years. It goes without saying that many of us have invested tremendous time, energy and financial resources in building up valuable businesses. It would therefore be extremely irresponsible and ill-advised from an economic point of view if we neglected to invest a little time and energy to ensure that the environment in which we trade remains stable. I put it to you that the decision to keep abreast of and involved in industry matters is not only a public-interest decision, but an economic one. What would happen to each of our businesses if, for example, our regulatory body which acts in the sole interests of the consumer, decided to regulate our commission earnings by promulgating a 1% tariff? A disjointed and fragmented industry would have much difficulty in fighting this kind of threat. While I do not wish to unduly raise your concerns, the lack of interest and participation from Institute members in some quarters amidst the Competition Commission investigation, underscored the need for us to stand together in a more concerted way in protecting the interests of industry. The Institute of Estate Agents is the only body we have to look after our interests as industry, in a profession that attracts ongoing scrutiny and debate. Let this be an encouragement to us all to communicate with each other, support one another, and protect each other, for the benefit of industry. I would like to thank all our members for their support. Our membership, which now exceeds 6100, continues to grow rapidly and we invite those of you who are not yet members to join us and help contribute to your industry. CLICK HERE TO RETURN TO THE MAIN NEWS PAGE