Beware of unregistered estate agents and unexpected outcomes | Legal Articles

 

Legal Articles

Beware of unregistered estate agents and unexpected outcomes

With all the potential risk that a property buyer could face, it is no wonder why people are strongly warned against dealing with an estate agent who isn’t EAAB registered.

Unregistered Estate Agents

The discovery of several unregistered agents operating around South Africa has made it even more important to ensure that your property purchase runs smoothly.

Unregistered agents advertise in local print media and any potential buyers who are interested in these advertisements run huge risks in the event of anything going wrong.

This is because these agents will not be held liable by the EAAB who regulate and hold accountable all registered agents in terms of a code of conduct.

UnQualified Estate Agents

These agents are not properly qualified to provide the best possible service to you as a buyer or seller. In addition these estate agents may have previously been disqualified from operating as estate agents.

Generally, buyers are advised by their agent who is also able to assist them to negotiate the best price with the seller.

If you are dealing with an unregistered agent you run the risk of being ill advised and not having the chance to negotiate the best price because they lack the necessary skills.

Property Sales Deposits

Another factor that is involved in the process is the handling of money such as a deposit.

The buyer is protected in this situation because by law these funds are held in a trust account and are secured by the fidelity fund.

However, if these funds are not protected by this provision, they could be stolen by the unregistered estate agent who could then disappear.

Contractual obligations

When making a contractual agreement, all parties involved become subject to terms which, if not abided by, will make them legally accountable for any fault on their part.

The rights of each party member are clearly stipulated which leaves space for recourse.

Voetstoots Clause and Defects

In the event of the buyer finding a defect after the purchase of the property which was not disclosed by the seller, the buyer could then argue that the seller acted fraudulently by concealing the truth about said defect.

The seller will not be able to rely on the 'Voetstoots' clause in the agreement which says that the buyer purchases the property as is.

This is because the buyer was not made aware of everything that was wrong in the first place and so could not make an informed decision.

It is thus essential for the seller to make the agent aware of all defects before the purchase agreement is made, failing to do so makes the seller liable.

However, if the seller does this, but the estate agent does not inform the buyer of the defects, then the estate agent could be held liable.  An unregistered estate agent could simply walk away.

Estate Agent Code of Conduct

The EAAB regulates estate agents, and it can charge the agent for going against the code of conduct of estate agents.

But if the agent is not EAAB registered they can escape punishment by simply disappearing.

That is why it is so important for a buyer to ensure that the estate agent they go through is EAAB registered and that they comply with any rules and regulations associated with such a contract.

Fidelity Fund Certificate

The seller and buyer will also need to verify that said agent holds a valid fidelity fund certificate for that current year otherwise they run the risk of losing their deposit due to fraudulent activity if the agent is unregistered.

In order to verify that an estate agent is registered, buyers should request a copy of the agents fidelity fund certificate or otherwise contact the EAAB call centre on 087-285-3222.

Another alternative would be to visit the EAAB website in order to see if the agent is currently registered for that year or not. If you are in doubt about the validity of your agent it is always best to double check.

This could save you a lot of heartache caused from losing your money or not having the ability to take legal action in the event of an issue arising.

Van Deventer & Van Deventer incorporated - Attorneys Sandton

Van Deventer & Van Deventer incorporated deal only with registered estate agents. Contact us for assistance if you have been the victim in a property transaction.

 

Comments are closed for this post, but if you have spotted an error or have additional info that you think should be in this post, feel free to contact us.


Subscription

Get the latest updates in your email box automatically.

Search

Archive