Transformation excites administrator
The Estate Agency Affairs Board (EAAB) was suddenly plunged into uncertainty when Minister of Human Settlements Tokyo Sexwale placed the dysfunctional board under administration in July. Sexwale has acted quickly, however, and convened a two-day summit in Midrand on October 4 and 5 to fast-track reforms and remedial action by calling together all industry players to contribute to the dialogue. He has also appointed advocate Taswell Papier as administrator on a short-term contract to oversee the righting of the ship.
Sexwale's swift action follows a raft of embarrassing governance and leadership issues shortly after responsibility for the property industry was transferred to his department in May.
He has made it clear that he expects speedy resolution to the main stumbling blocks obstructing racial and operational transformation and has committed himself to providing whatever support is necessary.
Papier stated at the start of the summit that the EAAB was committed to becoming a world-class regulator achieving standards of excellence and regulating a fully compliant industry for the benefit of the consumer and in the public interest.
"We are acutely aware of the negative experiences and the complaints and concerns raised in relation the board," he said.
"They have not fallen on deaf ears and we are working tirelessly to attend to those aspects with attention where it is due. We must re-cognise that the profession has been tarnished by recent events, culminating in my appointment. Housing is a fundamental human right and the estate agents' profession is key to giving meaning, form and content to this right."
One of the immediate stumbling blocks is the legal framework that governs estate agents, which is out of date and out of touch with the industry as it relates to the department's mandate and vision for property ownership in South Africa.
Although the legal reform process has already started, industry reform is going to be hamstrung in the short term by Sexwale's need to act within the confines of the existing legislation — the Estate Agents Affairs Act of 1976. Speaking at the conclusion of the summit, Papier said he was extremely encouraged by the interaction among industry players, because a collective view would be needed to forge practical solutions.
"My perspective is that it's about the value and benefit of diversity and bringing our collective minds to bear to make decisions in the interest of the profession. And the urgency is needed to bring about legal certainty for the industry as a whole."
Despite the executive order to resolve the issues swiftly and promulgate more relevant legislation, the process has only just begun and will probably be completed in the medium rather than short term. While it has been under way, Papier has been focused on reconstituting the board with new members. The period for nominations closed recently. He said, apart from selecting the requisite members and skills, he would want to strengthen the governance of the board's functions to avoid it falling into dysfunction again.
Commenting on proposals made at the summit that board appointees relinquish their property business interests if selected, Papier said a workable solution that accommodated valuable industry perspectives needed to be found. This would contribute to greater diversity, not only in terms of race, but also in representation from different sectors that were previously excluded.
"They all have a phenomenal contribution to make and if we can harness that intellectual ability and bring it to bear to the benefit of the profession, I think we are making significant progress," he said.
He added that the value of this contribution depended on board appointees acting in accordance with the legislation and exercising their fiduciary duties, as is expected of representatives of any professional body.
On the issue of making the industry a truly professional one, Papier echoed the many calls during the summit for the training and certification of property practitioners to ensure they possessed the requisite skills with which to advise consumers on buying a property.
"There can be no substitute for continuous learning," he said. "The estate agents' profession operates in a highly regulated environment that is impacted on by a multiplicity of laws. It is the profession that is the custodian of trust for millions of people, from the very poorest to the richest. Agents must be able to respond ethically, professionally, with integrity and honesty with their clients and they need to be on top of their game all the time."
Papier noted the criticism that training and certification requirements were seen as barriers to entry, which excluded agents on the periphery. He said the new board would have to demystify these processes.
Summit's key resolutions
1. That the following key principles must inform strategies, policies, legislation, regulations and procedures on the property practitioners' sector and related matters: a) Empowerment and inclusion of historically disadvantaged classes, individuals and organisations; b) Socioeconomic equality, equity, integration of poor and marginalised communities, individuals and sectors; c) Education, training and sustainability; and d) Alignment with the national strategic development objectives and outcomes of the state and government for human settlements.
2. There is consensus that the mandate and priorities of human settlements development inform the revision, rewriting, enactment and promulgation of the policies, legislation, regulations and related governance and compliance frameworks for the property practitioners sector.
3. The strategies, policies, legislation and regulations must ensure the sector achieves racial, class, cultural, socioeconomic and spatial integration, equity, equality and good governance in the sector.
4. The Estate Agency Affairs Board, the Department and the Ministry of Human Settlements agree and adopt a roadmap to address the shortcomings and deficiencies identified and recommendations and proposals made in the commissions, based on priority in the short, medium and long term.
5. The road map to be adopted should ensure that the required strategic, policy, legislative, financial governance and administrative matters receive attention based on short, medium and long term priority.
6. The Estate Agency Affairs Board and the department will explore measures to improve the funding and financial frameworks and measures to improve the long-term sustainability of the sector, including improved funding for sector and consumer education, training and learnerships.
7. The Estate Agency Affairs Board and the department will allow for adequate and appropriate consultation and communication, and this will include the sector stakeholders, on the road map and related.