IEASA National - News

Urgent Need for Consumer Education in Township Property Market - Institute   Article Date :4 Aug 2006 There's an urgent need for consumer education in the township property market, says Thabo Manganyi, transformation director of the Institute of Estate Agents (IEA) in the Western Cape. He says that many buyers, sellers, and estate agents simply have no idea of the basics of property laws and practice. As a result, many people aren't the legal owners of the houses which they have paid for, and many estate agents break the law daily by operating without being licensed - and are paid for it. "Buying and selling property isn't child's play," says Manganyi. "To protect property owners' interests, and to ensure that taxes are paid, there are minimum legal requirements that must be met. The seller and buyer must sign a contract. A conveyancing attorney must register the sale in the Deeds Office and see to it that there's a valid electrical compliance certificate and that the seller pays the current year's rates on the property, that the buyer pays the transfer duty and the legal costs and, of course, that he pays the seller." Yet, says Manganyi, many people buy and sell property simply by agreeing on the terms, recording them in writing in the form of sworn statements, and handing over the property in exchange for payment. The change of ownership isn't recorded in the Deeds Office, which means that the buyer isn't the legal owner of the property. "I have often been given a mandate to sell a house, only to find, when I check the Deeds Office records, that the registered owner is actually someone else who moved on years ago. As a professional estate agent, I know that even though I can easily find a buyer, to sell the house legally that registered owner will have to be found, to sign the necessary papers. And the house might have been bought and sold several times since that registered owner sold it, and the registered owner may be untraceable, or even dead." Manganyi says that many property owners don't understand the importance of the title deed, as proof of ownership. "It's often said that a house is the most valuable asset that one can own, and a title deed is proof of ownership, and it's backed by the government." Property owners also need to be better educated about the estate agency industry, and to make sure that they deal only with properly licensed estate agents. Manganyi says that it's been the law for the past thirty years that every estate agency firm, and every individual estate agent, must be registered with the Estate Agency Affairs Board, and that an unregistered estate agent is not entitled to paid for any services which he or she provides. "Unfortunately, many estate agents in the townships are unregistered, and some have been operating illegally for twenty years or longer. In my view the Board, as the regulating authority, has failed the consumer by allowing this situation to continue for so long." Manganyi says that consumers should know that there are no exceptions to this law, and that anyone who wants to sell a property through an estate agent should make sure that the estate agent is legally licensed. "It's very simple," he says. "Just ask the estate agent to show you his or her fidelity fund certificate for the current year. It's an official document, which comes in two forms: an A4-size certificate with the Board's seal on it, or a small credit-card-sized certificate. Make sure it shows the agent's name, and that it's for the current year. If the agent can't show you a valid certificate, then go to another agent." Whose responsibility is it to educate consumers? Manganyi suggests that consumer protection and information bodies in both the public and private sectors have a role to play, and that estate agents, attorneys, and financial institutions operating in the township markets can contribute by informing the consumers with whom they deal. CLICK HERE TO RETURN TO THE MAIN NEWS PAGE