Meeting with Estate Agency Affairs Board on dispute with CEO and challenges

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Meeting Summary

The aim of the meeting was for the Select Committee on Trade and International Affairs to receive a briefing from the Estate Agency Affairs Board on its transformation and turn-around strategy as well as the role of the Chief Executive Officer.

However, the meeting did not focus much on the details behind the proposed transformation and turn-around strategy. This can be attributed to the fact that the Board did not, physically, have the necessary information and statistics to present.

The Board’s presentation, in brief, dealt with the following issues: the Estate Agency Affairs Board Regulatory Pillars; Key Challenges facing the EAAB; Education and Training; Consumer Protection and Stakeholder Communication and Awareness.

A number of questions were directed at the Board, particularly around the issues of: transformation, the envisaged amnesty period – for the non registered agents (compliance), IT upgrade, and the envisaged plan to capacitate inspectorate services - of the Board.

Meeting report

Opening Remarks
The Chairperson indicated that a significant number of Members were unable to attend the meeting due to other pre-scheduled obligations. He also noted and accepted the Minister’s apology for being absent. According to the Chairperson, this meeting was about information sharing.

Department of Trade and Industry (the dti)
Mr Lionel October, Acting Director-General , the dti, stated that the South African estate agency industry was well regulated. He further mentioned that by-and-large, the industry had experienced a significant boom, and that it was when the markets began to slump that certain estate agents began engaging in malpractices.

Mr October re-iterated that the Estate Agency Affairs Board (EAAB) enjoyed “operational independence” and that the dti would not be investigating the dismissal dispute brought by the CEO against the Board. However, he pointed out that the Minister was legally obliged to determine whether the Board acted within reason in dealing with the CEO.

Mr October informed Members that the Minister had constituted a team, from the dti, whose mandate it was to ascertain from both parties, namely the CEO and the Board what each perceived the issue to be. This team had completed its task and had recommended, to the Minister, that the legal process should take its course.

Estate Agency Affairs Board (EAAB) Presentation
Mr Thami Bolani, Chairman, EAAB, delivered the presentation. The briefing highlighted the Board’s regulatory pillars and plans to develop a
transparent policy on inspections and investigations.

In addition, the presentation identified key challenges facing the EAAB:
•Lack of transformation within the industry
•Lack of clear policy guidelines and strategies around compliance
•Increase in number of persons operating without valid Fidelity Fund Certificates (FFCs)
•Problem of illegal traders
•Increase in number of fraudulent claims
•Poor IT infrastructure
•Low profile of the EAAB / consumer awareness
•Poor customer service
•Poor working conditions

Mr Bolani reported that
5000–10000 traders were believed to be operating illegally. The EAAB was working on developing an amnesty policy to significantly reduce the numbers of unlicensed traders. The amnesty initiative would be supported by an aggressive consumer education campaign

The Chairperson noted that the aim of the meeting was for the Committee to be briefed on the Board’s transformation and turn-around strategy as well as the role of the Chief Executive Officer. However, these matters were not covered in the presentation.

Mr Bolani replied that he did not have all the information and statistics available at this moment.

Mr A Nyambi (ANC, Mpumalanga) addressed two issues. Firstly, he asked what was the number of fraudulent claims (expressed in percentage) received by the Board? Secondly, he what the duration of the envisaged amnesty period would be?

Mr B Mnguni (ANC, Free State) asked what the barriers of entry were to new comers – when it came to the estate agency industry. He also wanted to know, what steps were being taken to de-racialise the industry. Lastly, he asked whether traders needed a minimum qualification to operate legally?

Mr F Adams (ANC, Western Cape) welcomed the presentation made by the EAAB. He did not understand the Board’s rationale behind the envisaged amnesty period. He was also at pains to understand the rationale behind the media statement issued by the dti on 08 March 2011 concerning the question of the CEO.

Some Members enquired about the ongoing case involving the CEO.

The Chairperson instructed Members to desist from that line of questioning since the matter was before the courts.

Mr Bolani indicated that he would not speak to all the questions at this stage as the Board was working tirelessly at developing a strategy to address the challenges that it faced. He was hopeful that a working plan would be ready by April 2011 and that the Board’s transformation plane would be finalised by June 2011.

The Chairperson thanked all those present and indicated that an invitation would be extended to the EAAB within two weeks to again appear before the Committee.

The meeting was adjourned.


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