NO FFC – NO COMMISSION

NOT ALWAYS THE CASE?

 

Estate agents are not entitled to earn commission on property transaction they negotiated successfully, if they were not, at the time of conclusion of the agreement, in possession of a valid Fidelity Fund Certificate.  This requirement is a Consumer Protection measure, as Estate Agents make mandatory contributions to a Fidelity Fund and the certificate is validation that their levy liability to the Fund, is up to date.  In this way, members of the public are guaranteed reimbursement, in the event of misappropriation of their monies, by an estate agent.

In an important judgement handed down by the Supreme Court of Appeal last week, it was held that  Agents are now entitled to commission if they are forced to trade without a valid FFC , due to the negligence or reluctance to comply on the side of the Estate Agency Affairs Board (EAAB). 

The matter related to an instance where the Estate Agency had timeously submitted all documents to the EAAB, the latter however accidently issued an incorrect certificate in the name of a non-existing entity.  This error was subsequently corrected, with retrospective effect.  The Court held that their claim for commission in this instance could not be thwarted by the argument that they were not in possession of a valid FFC at the time.

It is  imperative for Sellers,  to request a copy of the Estate Agent’s valid FFC,  at the time signing the mandate to market the property.

Visit our website:     www.nsvattorneys.co.za