Message From The CEO
The EAAB and the estate agency profession are unavoidably influenced and affected in various ways by the vicissitudes of often uncontrollable external factors which impact on their respective socio-political and economic environments. The prevailing economic climate clearly exerts a significant and wide-ranging effect, both direct and indirect, on the property sector in general and, also, on the fortunes of the estate agency profession in particular.
Estate agents will, no doubt, be aware that the last three quarters were characterised by a major restructuring of international financial markets due to the sudden and unanticipated global economic meltdown and the accompanying economic and financial slump. The result was that governments worldwide were obliged to intervene in the economic sphere on an unprecedented scale. South Africa is, indeed, fortunate that the local banking sector seems largely to have escaped the most serious effects of the international financial turmoil which have seen unprecedented state recapitalisation of financial institutions aimed at encouraging continued bank-to-bank lending which had all but ceased. This is in large a measurement taken due to conservative management and lending practices as well as the requirements of the National Credit Act of 2005, which, amongst other measures, prohibit unaffordable and reckless lending by financial institutions.
It cannot be denied that the international economic contagion has, nevertheless, exerted a negative, even if more subtle and indirect, impact on the South African property market. Financial institutions, in the implementation of further pre-emptive damage control measures as envisaged by the provisions of the National Credit Act, have had to continually review their risk profiles. They, consequently, have become particularly vigilant where the granting of credit in general and mortgage finance in particular is concerned. This is, without doubt, a significant factor that has already depressed, and will continue in the short- to medium term negatively to impact on, the fortunes of the real estate profession. The unfavourable economic climate has already resulted in a reduction in the number of registered estate agents which, it is anticipated, will coincide with an increased proliferation of non-registered estate agents. It is, indeed, expected that this factor, allied with the rising levels of white collar economic crime that are endemic during depressed economic periods, will not only have a deleterious affect on the EAAB’s risk profile but, also, impact negatively on the Fidelity Fund. The EAAB, as a result, has instituted appropriate measures continuously to review and strengthen its risk management processes with a view to effectively and efficiently managing all of these identified risks. The immediate result of these proactive interventions is that the EAAB remains confident that it has the necessary resources and capacity to continue to execute its statutory mandate, and to deliver its services to all stakeholders, in a professional and competent manner in accordance with international best practices.
Following from the above, I would like to take this opportunity to remind estate agents that the staggered fidelity fund certificate renewal deadlines for 2010 are rapidly approaching. The EAAB, of course, relies on the full cooperation, support and assistance of estate agents in this respect in ensuring that all fidelity fund certificate renewals for 2010 are issued timeously and without any unreasonable delay. It must be emphasised, however, that while the EAAB is dedicated to meeting the expectations of prompt service delivery it nevertheless remains obliged to monitor and ensure full compliance with all relevant regulatory and registration obligations. The EAAB is keenly aware that undue delays can be extremely frustrating to applicants but this will, unfortunately, be the inevitable result in cases where renewal applications, and new applications, either have missing or incomplete information. Shortcomings of this nature will inevitably hinder the ability of the EAAB to process the relevant transactions in a timely manner. Stakeholders can, however, be rest assured that once all of the EAAB’s registration requirements have been complied with every effort will be made to process applications, and to issue fidelity fund certificates to qualified applicants, speedily.
Estate agency enterprises are also reminded that the stipulated fifty per cent share of interest earned on trust moneys, for which no specific written mandate was received, must be paid over regularly and by no later than the end of May in each year. I would, therefore, urge all estate agency enterprises, if they have not done so already, to immediately ensure that the share of interest referred to that is due to the Fidelity Fund is remitted to the EAAB as soon as possible.
N T MAPETLA
Chief Executive Officer
