Settlements minister cracks the whip

Minister of Human Settlements Tokyo Sexwale has never been afraid of taking decisive action and this has been most clearly evident in his reaction to the recent crisis at the Estate Agency Affairs Board.

It has been a rocky road for the minister and the board since he proclaimed in his budget speech in May that it would henceforth fall under his jurisdiction, moving from the Department of Trade and Industry's portfolio. Shortly after, the board was rocked by internal strife when chairperson Ina Wilken resigned, chief executive Nomonde Mapetla left under a cloud and the company secretary was suspended.

The minister placed the dysfunctional board under administration at the end of July, convened a discussion with the industry that same day and vowed to host a summit at which all role players could discuss solutions. This summit was held on October 4 and 5 at Gallagher Estate and was attended by about 500 delegates representing various interests and industry disciplines.

"A promise is a promise and we are about to keep our word," Sexwale said in his opening address. "As minister, it is my responsibility to regulate and I am your key person in Cabinet as long as I remain in that Cabinet. So you have a direct player who will have influence there."

The caveat to this access is the restructuring of the industry and Sexwale urged participants to produce recommendations that could add value to the legislative reform process he had initiated. This process calls for the wholesale reconstitution of the Estate Agency Affairs Act into new property legislation that is more closely aligned with the mandate of the Department of Human Settlements.

"We will need a new approach to arrive at the kind of legislative environment that will make your work easier," Sexwale said.

"This would also require a shift in mind-set in the industry, which he said was too "lofty" and had thumbed its nose at being placed under the authority of the "minister of shacks. The vast differences that existed in this country between Soweto and Sandhurst is one difference too big. That was apartheid and let's not blame it; let's just talk about it. It's my job to sort out the mess; that's why I'm here," said Sexwale.

He said the distortion in the property market and land ownership was still painfully prevalent despite 18 years of democracy and it was his responsibility to bring about a non-racialised residential space.

"People were dehumanised and I need your help and I'm going to help you, too," he said. "You are going to help me … by deracialising the residential space in this country. There is no apartheid without that space between Johannesburg and Soweto. My job is to close that space." "This process of closing the gaps is where the industry stands to benefit as more people are relocated from informal settlements to free housing, but not like in the past. "We do not build RDP [houses] anymore," Sexwale said.

"We cannot dehumanise people by naming a house and giving it to them … that was the reconstruction and development project. It was a policy. You cannot name houses after a policy because people who live in such houses will see themselves differently."

He cited significant new affordable, high-density housing developments such as the 30 000-unit Joe Slovo City in Lephalale, Limpopo, the 50 000-unit Conurbia project south of Durban, KwaZulu-Natal, and other similar projects in and around Johannesburg, Gauteng, that all represented a real opportunity for the industry to benefit.

Sexwale reiterated his view that the industry needed a complete overhaul to reflect the reality of the property market and address the historical skewing of ownership and location, but he told participants the choices lay largely in their hands.

"Make sure that your inputs are quality inputs — that the recommendations are reasonable, concrete and implementable. "Make sure that your proposals are in sync with the new changes the country is going through … and think outside the box, because this summit is a great opportunity for you to make recommendations that could lead to changes that are crucial for you in the legislation."

He encouraged the industry to take up his Vision 2030 challenge that anyone born in 2010 would be able to live in a decent house by the year 2030.

"Prepare yourselves, because the government is going to invest in huge infrastructural plans and a greater part of that will go to where people live. There is going to be a lot of capital injection into this industry, so the watchword is think creatively at this summit … and make the necessary changes that will outlive this summit," said Sexwale.

Legal overhaul

It is anything but business as usual for the real estate industry following the relocation of the Estate Agency Affairs Board to the Department of Human Settlements in May. Apart from stepping in to place the malfunctioning board under administration, Minister Tokyo Sexwale has also instituted a review of the Estate Agency Affairs Act of 1976.

Last week's two-day industry summit at Gallagher Estate in Midrand, Gauteng, was used to gain stakeholders' trust in the realignment with the department's mandate, as well as to get their input about what this legislative review should entail. The task of managing this process has fallen to advocate Werner Krull, an independent legal adviser to the department.

Krull said in an interview the reforms would support the department's transformation agenda, because the existing Act did not sufficiently address the market's needs and contained certain barriers to entry that could be eliminated.

"Legislation is often very prescriptive and what I want to debate is the approach of rather making it more enabling. This is a very dynamic industry and it changes fairly quickly, so one should use different mechanisms to achieve the desired outcomes and not rely only on the strict rules of the legislation itself," he said.

The ambit of the proposed new law would include all industry practitioners, consumers and even those who render services to the industry.

Krull said this would require the definition of property practitioners to be expanded to include auctioneers, property developers and property management companies.

By clearly delineating roles and responsibilities, the new legislation could be aligned with the industry. This could, for example, result in changes to onerous structures such as trust accounts, which are regarded as a significant hurdle. The need for protection would extend to industry players and consumers alike.

He said the loopholes exploited by non-registered agents flouting the law and claiming indemnity from prosecution by the board on grounds of jurisdiction would be closed.

"Too many people get away by saying they are not estate agents and therefore cannot be investigated, so the consumer has to fall back on criminal complaints or litigation, which is often very costly and difficult. So we are looking to give sufficient powers to look into all those issues, whether agents are registered or not," he said.

No timelines have been set for the drafting of the legislation.

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