Gauteng High Court refuses to bless estate accreditation fees for property agents
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The Gauteng High Court has dismissed an application by the Residential Communities Council for an order declaring estate accreditation fees lawful, leaving the practice to be judged on the facts of each case.
The Gauteng High Court, Johannesburg, has dismissed an application by the Residential Communities Council for a declaratory order on whether private homeowners' associations, governing bodies and body corporates may charge property practitioners a fee before they are allowed to market or sell homes inside residential estates.
The council had asked the court to declare that charging the fees does not constitute an undesirable business practice as provided for in regulation 35 read with section 63 of the Property Practitioners Act. The court dismissed the application, meaning the practice will have to be assessed case by case.
Samuel Seeff, chairman of Seeff Property Group, welcomed the decision and said the group views accreditation fees as an anti-competitive practice that restricts fair business conduct under the Consumer Protection Act. "Limiting this places the seller or landlord at a disadvantage as they are unable to exercise their property, and consumer rights by appointing a property practitioner of their choice to sell or rent their property," he said.
Human Settlements Minister Thembi Simelane said she noted and welcomed the judgment. She said the court recognised that the lawfulness of the contested conduct depends on the specific circumstances of each case, including the nature of the organisation concerned, the functions it performs, the nature of the fees charged and the circumstances under which they are imposed.
Simelane said the court further acknowledged that such practices may, depending on the facts, disadvantage property practitioners, restrict consumer choice and create barriers to entry into the property sector. She said the dismissal of the declaratory order enables the department, through the Property Practitioners Regulatory Authority, to continue advancing a fair, transparent and inclusive property sector.
Herschel Jawitz, chief executive of Jawitz Properties, said that for homeowners in estates the judgment is about choice, and that charging agents a fee to access an estate limits that choice and makes it harder for new agents to enter the market. "The court has made it clear that estates can't assume these fees are acceptable across the board, but it isn't the final word, as each case will depend on its own facts," he said, adding that estates also have legitimate security concerns and that the industry should work with them and the regulator on practical solutions.