Business Drivers
Organisational Business Drivers - Environmental Assessment Providing The Context In Which The
EAAB Operates
Introduction
The Estate Agency Affairs Board is a Schedule 3A entity and its primary reason for existence is found within the Estate Agency Affairs Act which is to regulate and control certain activities of estate agents.An additional responsibility of the EAAB is to be a supervisory body in terms of the Finance Intelligence Act.The Department of Trade and Industry (the dti) is the Executive Authority and Shareholder to which the EAAB account to for its activities. As such the planning processes of the EAAB are also influenced by the priorities of the dti.
The EAAB is influenced and affected by various factors within its external environment. These are mainly the demands of the industry it was created to serve, that of the real estate industry.
National Priorities
The national priorities as defined in the State of the Nation Address and which may be applicable to the EAAB are as follows:
- the further acceleration of our economic growth and development
- speeding up the process of building the infrastructure we need to achieve
our economic and social goals
- improving the effectiveness of our interventions directed at the Second
Economy, and poverty eradication
- enhancing the impact of our programmes targeting the critically important area of
education and training
- further strengthening the machinery of government to ensure that it has the
capacity to respond to our development imperatives and,
- enhancing our focus on key areas in terms of our system of international relations,
with particular focus on some African issues and South-South relations.
In developing our strategic initiatives and priorities government’s national priorities
as listed above were taken into consideration.
The Department of Trade and Industry (the dti) Priorities
The priorities of the dti which is defined in its medium strategic framework for 2008-2011 and which is applicable to the EAAB include the following:
(a) Promoting investment and growth
(b) Promoting participation, equity and redress
(c) Contributing to Africa’s Development and Regional Integration.
Priority as Supervisory Body in Terms of FICA
The Finance Intelligence Centre Act (FICA) was promulgated by the South African government as a response in the fight against money laundering. As a supervisory body in terms of FICA, the EAAB is empowered to act in the enforcement of the provisions of the act. This will be achieved by carrying out regular physical inspections of the records of registered estate agents.
Economic factors
The last six months of 2008 saw a major restructuring of international financial markets characterised by government intervention in the economic sphere on an international scale. The local banking industry has largely escaped the international turmoil which saw massive recapitalization of financial institutions to encourage continued bank to bank lending. The impact of these changes is likely to have a significant impact on the South African property market resulting in a negative impact on the number of registered estate agents. With the introduction of the National Credit Act in June 2007, financial institutions have reviewed their risk profiles and granting of credit has become more vigilant which has had a significant impact on the real estate industry. With the economic slowdown it is expected that the number of registered estate agents will decline. This increases the risk of activities by non-registered estate agents influencing the fraud profile and negatively impacting on claims against the Fidelity Fund.The EAAB would thus have to continuously review and strengthened its risk management processto manage the risk of increased number of unregistered estate agents and the impact on the Fidelity Fund.
Sociological factors
The level of knowledge of new buyers is relatively low which exposes this market to the activities of unregistered estate agents which is likely to negatively impact on claims against the Fidelity Fund.In line with the growth objectives of national government, more black estate agents are encouraged to enter the profession. The reduced affordability for housing, competition and new education standards in the profession may however significantly impact the sustainability of newly established estate agency firms. The impact of the EAAB would be on the number of registered estate agents and the activities of unregistered estate agents. This would include the illegal use of trust accounts maintained by estate agent firms on behalf of their clients.
Compliance to legislation - Legal factors
There are several legislative enactments that the organisation operates under which include among others the following:
- The Estate Agency Affairs Board Act, Act # 112, 1976,
- The Public Finance Management Act, Act # 1, 1999,
- The Preferential Procurement Framework Act, Act # , 2000,
- The Financial Intelligence Centre Act
- Labour Relations Act
Financial Management
The Estate Agency Affairs Board (EAAB) is a Public Entity listed in Schedule 3A of the Public Finance Management Act (PFMA), Act 1 of 1999. This legislation places responsibility on the Board of the organisation, as the accounting authority, to manage the resources in a manner that encourages efficiencies and accountability for the use of public funds.
