“All that glisters is not gold” (William Shakespeare in Merchant of Venice)
Buying or selling a home could be one of the most important financial decisions you’ll ever make. It’s an exciting time – but don’t lose sight of the need to tread with care.
A key player in the process is likely to be an estate agent, to whom you will be entrusting one of your most significant assets. It goes without saying that you need to choose someone both competent and trustworthy.
Fool’s gold?
Be particularly careful here, because not everyone who claims to be an estate agent is genuine – and you will be in for a world of pain if you inadvertently trust your property transaction, and your money, to a charlatan. A fake agent may be actively dishonest or merely incompetent, but (in the way of all con artists) is probably first and foremost a persuasive and convincing liar. Lots of “glister”, but absolutely no gold!
Quite apart from the competency angle, just Google a phrase like “fake estate agent sentenced” to get an idea of how much full-on “bogus agent” fraud there is.
Let’s have a look at one recent case.
The Hawks swoop, and a fake agent gets 23 years
A fraudster operating in Bloemfontein and pretending to be an estate agent conned his victim into signing a sale agreement and paying him R100,000 for a house she’d set her heart on. Too late, she discovered that the “agent” was neither registered as such nor entitled to sell the house.
The matter was handed over to the Hawks, and the fake agent is currently serving an effective 23 years’ direct imprisonment. Justice served, and let’s hope the victim, to whom R100,000 is clearly a substantial sum, is also able to recover her hard-earned money from the fraudster.
A timely warning
A timely warning from the PPRA (Property Practitioners Regulatory Authority) in February confirms that, quite apart from the risk of fraud, it’s crucial for your protection to ensure that the agent you decide to work with is properly registered with the PPRA and holds a valid Fidelity Fund Certificate (FFC).
Why is PPRA registration important?
The PPRA is the official body that oversees estate agents and other property practitioners. Registration with the PPRA ensures that:
- The agent operates legally and is subject to the PPRA’s Code of Conduct.
- The agent has met the necessary training and compliance standards.
- You can claim against the Property Practitioners Fidelity Fund for any theft of trust money by an agent with a valid FFC.
Four checks before you engage an agent
Before giving a mandate to an estate agent or agency, it’s important to check that they are legit. You can do this by:
- Confirming their registration and FFC: Ask for proof that the agent and the firm are registered with the PPRA. Request copies of their FFCs and verify their validity for the current year by phoning the PPRA on 087 285 3222.
- Verifying supervision for candidates: If dealing with a candidate property practitioner, confirm that they are working under the supervision of a fully registered agent.
- Checking their trust account: If you pay money to an agent (a deposit perhaps), make sure the firm is registered with the PPRA and has an active trust account held at a registered South African bank. The funds should be deposited into this trust account and not into the agent’s personal or business account.
- Asking us! We can help you with all these checks – and if you aren’t sure who to use, we’ll point you in the right direction.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
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