The Debt Collectors Act

There has recently been much polemic as to whether or not those estate agents engaged in the management and administration of rental property and/or sectional title schemes are obliged to register with the Council for Debt Collectors. The Council was established pursuant to the Debt Collectors Act, 114 of 1998, and exercises control over the occupation of debt collectors.

All debt collectors falling within the ambit of the Act were obliged to have registered with the Council by 11 August 2003. Pursuant to the Act the term ‘debt collector’ is, inter alia, defined as: “A person, other than an attorney or his or her employee or a party to a factoring arrangement, who for reward collects debts owed to another on the latter’s behalf …”.

The question that, thus, arises is whether or not the collection of rentals or levies and/or arrears of rentals or levies by an estate agent who has been mandated to do so effectively brings that estate agent within the ambit of this definition. If the answer is in the affirmative the affected estate agent will be obliged to register with the Council for Debt Collectors while, if it is in the negative, the estate agent will not be required to do so.

The Board believes, at the outset, that a distinction must be drawn between a ‘rent (or levy) collector’ and a debt collector. It is of the view that the former act cannot be said to constitute that of a debt collector. The issues at stake, however, are rather more complex and are not easily resolved. The Board is, therefore, currently in the process of obtaining an authoritative legal opinion on the matter. This opinion will, accordingly, be disseminated to estate agents and published on our web site immediately it has been received. Interested parties are, in the meantime, referred to the web site of the Council for Debt Collectors, which can be accessed at www.debtcol-council.co.za.



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