MAIN IMAGE: Jan le Roux – CE of Rebosa, Clarence Catin – executive manager of Investigation and Enforcement at the PPRA
Editor
We’ve published several articles about the undesirable business practice of agents illegally paying HOA fees (listed as marketing or accreditation fees). The recent CSOS directive has again put the spotlight on what seems to be an ongoing practice.
The CSOS Practice Directive 1 of 2025, as it refers to property practitioners, clearly states that:
“(That) only a particular property practitioner may let or sell a unit, this is discriminatory, unreasonable and prejudicial to unit owners. Therefore, it is an undesirable rule only to allow certain property practitioners to let or sell a unit within the Community Scheme.
This rule imposes an unreasonable limitation on the rights of an owner in the Community Scheme to market, sell and let their unit through a property practitioner of their choice, and the CSOS will not register a rule of this nature”.
“While we are very appreciative of the support of CSOS when it comes to ending this practice of restricting agent access to community schemes, this unfortunately does not solve the problem”, believes Jan le Roux, chief executive of Rebosa.
The background
The Property Practitioners Act and Regulations became effective on the 1st of February 2022, with one of the primary focus points being transformation in the real estate industry.
The Minister exercised that authority, and concerning Regulation 35, determined that the payment of accreditation fees and the limitation of the number of agents being allowed to operate in security estates (through which specific agents gained an advantage to the detriment of others) was to be considered an undesirable practice.
This implies that any agent participating in such a scheme would be acting in contravention of the regulations, with the result that the PPRA would sanction such agents.
In 2023, the PPRA started acting against agents participating in these schemes by issuing compliance notices and fining agents R5,000. This action had serious consequences in the industry because operating in security estates is lucrative.
This impact was exacerbated by the fact that many agents ignored the notices, or never received any and continue trading in this manner. Conversely, those who tried to act in terms of the law did so to their detriment and loss of income in the process.
The current state of affairs – it’s better to ask for forgiveness than permission
Le Roux believes that this state of affairs is still prevalent, as many agents consider a minor penalty of R5,000 a small price to pay for the right to earn many times more than that in commission. “The PPRA has not published any information in this regard, although the Act empowers them to disclose the names of agents found guilty of contravention of the law. It is therefore not clear how successful the application of the law has been”, he believes.
What is abundantly clear is that the practice is still alive and well, as almost all homeowner associations (HOAs) are continuing to insist on accreditation fees under various guises, and many agents continue to trade in this manner.
“The fact that these practices are not being stopped is seriously detrimental to transformation. One only has to look at the websites of homeowners’ associations to see how limited the number of black estate agencies trading in these estates is. I find it worrisome that the PPRA seems to be acting in a relaxed fashion when it comes to rooting out this practice”, shares le Roux, “I’ve been in regular communication with the head of prosecutions at the PPRA, Mr Clarence Catin, and he has consistently assured me that all possible action is being taken. That is all good and well, but if you’re not making it clear in the marketplace that these illegal actions have consequences (and actually follow through on them by publishing the names of transgressing agents for example), then I cannot fault agents for thinking that the PPRA is ignoring the problem at large and that their chances of being caught are worth the risk”.
Le Roux goes on to muse that Mr Catin, working for an organisation tasked with transformation, and which is enabled to address this problem with agents, would go the extra mile to ensure compliance. “I have reason to believe that the PPRA has had limited success, but I would love to be proven wrong. I wish that the PPRA would act vigorously and eradicate the practice or declare a moratorium until it is willing and able to prosecute effectively”, he concludes.
Mr Catin was unavailable to comment by the time of publication.
