make sure you aren't losing out
Are you an estate agent or receiving part commission for assisting an agent? If so, do you have a valid fidelity fund certificate (FFC)? In 2010, IEASA released an article informing all agents of the need to have and FFC and we recently received this update from one of our legal advisors.
This judgment deals with a claim for commission by an estate agent who was not in possession of a valid fidelity fund certificate at any time, although employed by an estate agency. The Court a quo (the court from which an appeal has been taken) held that the prohibition against claiming commission in such circumstances was not relevant in the relationship between the agent and the agency, only where such agent sought to claim commission from a member of the public. The present Court disagreed.
Are you an estate agent or receiving part commission for assisting an agent? If so, do you have a valid fidelity fund certificate (FFC)? In 2010, IEASA released an article informing all agents of the need to have and FFC and we recently received this update from one of our legal advisors.
SUMMARY INTRODUCTION
Venter was employed by Warren Jack Property Brokers (“the estate agency”) and performed work as an estate agent, although he never was in possession of a valid Fidelity Fund Certificate. His contract of employment provided that he would be entitled to 50% of all commission received by the estate agency in respect of transactions he successfully facilitated on behalf of the agency.
Whilst in this position, he entered into an arrangement with another estate agent (Barry Wood) of the same estate agency, the latter at all times in possession of a valid FFC. In terms of the arrangement, Wood and Venter would share all commission payable to either of them by the estate agency in respect of property transactions successfully facilitated by either of them. The estate agency was aware of this arrangement and gave effect thereto. Initially, they travelled together attending their various appointments with clients, listing new properties and generally pursuing their business as estate agents. Later on, in order to maximise their efforts, they resolved to work separately during the day, still within the arrangement, each working on different deals, thus earning more money.
The relationship soured and Venter and Wood decided to terminate their arrangement. They agreed that despite the termination of their arrangement they would continue to share commission in respect of certain transactions not yet concluded, but which they had worked on during the subsistence of the arrangement.
Subsequently, Venter instituted proceedings against the estate agency and Wood for payment of his share of commission in respect of three transactions, in which two were ruled in Venter’s favour.
Both parties appealed against their respective losses...
The estate agency and Wood defended the matter and argued that Venter was precluded from enforcing any of his claims, whether resulting from the arrangement with Wood or otherwise, by virtue of the provisions of section 34A of the Estate Agency Affairs Act 112 of 1976, which determines that an estate agent may not claim any remuneration in respect of his/her performance as an estate agent unless he/she was in possession of a valid FFC at the time.
The Court a quo reasoned that section 34A regulated the relations between the public and estate agents and therefore did not prevent Venter’s claim in the present instance where he was claiming commission from the estate agency.
Subsequent court proceedings and judgments left Venter barred from receiving any of the commissions being contended. Read the full summary of this case to find out why and see how it affects the general public in such cases.
