• The writer is a Director of The Waldorf Suites Sandton, whose interest in this matter is to ensure his guests gets what they pay for. He operated for over 16 years from 1983 to 1999 in real estate initially as an agent, then property development. He takes an interest in the running of the company's main asset, customer service & is available to guests for advice & facilitation of business in South Africa.
• The agents represent an unregistered real estate firm named - (unnamed intil matter is concluded).
• The names of the agents are - (unamed until this matter is concluded)
• The agents & real estate company are not registered estate agents in South Africa and are not entitled to sell property, receive trust money, nor receive commission from the sale of a property. They could face prosecution for any of the abovementioned acts.

1. The crux of this story is the estate agents induced our guest (a senior manager at Citibank) to make an offer to purchase a property in Sandton. My guest signed the offer & the agent took it to the seller, who rejected the offer & made what should have been a counter offer by adding a clause that required my guest to pay the difference between Value Added Tax at 14% & transfer duty at 8%. Essentially the seller had asked for an increase in the selling price of 6%. The agents should have informed my guest of the prejudice he was to suffer, but instead chose to write him a letter stating that his offer had been accepted. When he questioned the new clause, they informed him (orally) the added clause was merely a formality with no cost implication to him; two down right lies.
2. In RSA law a property purchase agreement cannot be orally concluded. It requires signature by the buyer & seller. If a buyer makes a written offer and the seller amends it, the seller in fact rejects the offer by amending it, and, the amended offer constitutes a counter offer to the buyer. The agent is lawfully bound to inform the buyer of the ramifications of the amendment and to get the buyer's written acceptance of that amendment. If the agent fails to do so, no agreement exists. These agents attempted to dupe the buyer (my guest) into believing the seller had accepted my guest's offer, and my guest was consequently bound to that agreement. They almost succeeded.
3. The agent attempted to drive the sale through on the pretence (that the seller had accepted my guests offer) by attending to the next steps in the administration process, being having the guest apply for the mortgage and instructed the conveyance attorney to prepare various documentations to effect to transfer of the property into my guest's name. My guest being none the wiser believed the agent's advice was correct and complied with the agents' requests to sign further documents, not knowing that by doing so, he was digging himself deeper into ratifying an agreement which in fact does not exist. In good faith, he paid a sum of ZAR 50,000 into trust with the Agent. Had he proceeded to sign all the documentation that asked by the bank and conveyance attorney, he would irrevocably committed himself to something he had not agreed. In RSA it is usual for the seller to appoint the conveyance attorney. By virtue of that instruction, the conveyance attorney works in the interests of the seller. The conveyance attorney drafts documents to transfer ownership of the property from the seller to the purchaser. Once these documents are signed, they replace the agents agreement. They constitute the instructions of the seller's & buyer's instructions to the Deed Registry Office
4. As a result of my client's complaints regarding the non-performance of the agent, I became aware of the facts and was in a position to inform him of his rights and his potential prejudice. My guest faced grave risk through this process because an unregistered Estate Agent may not hold a trust account and therefore should not have received money from a buyer. While you may prosecute a person acting as an agent without a license, your money is not protected by Estate Agent Board Fidelity Fund. If that agent should abscond with your money, you cannot claim against that fund. Rightly or wrongly, the onus is upon you to ensure that you deal with a registered Estate Agent or for that matter to check your facts before you enter into an agreement.
5. Fortunately, my guest's correspondence resulted in the agents paying his deposit (ZAR 50,000) to the transferring attorney, presumably because they realised that they had illegally received & held trust money. By doing so they have contravened the requirements of the purported sale agreement. The conveyance attorney is not entitled to hold it and so the money should be returned to my guest, because the conveyance attorney has no right to hold it or pay it to the seller. Being in a trust account of an attorney is also reassuring because the Law Society of South Africa also protects those funds through members insurances, and thankfully the South Africa legal system is by most standards ethical. So for now it appears we have averted this potential distaster and it is likely that my guest will get his money back.
6. My guest informs me that he contacted the Estate Agency Affairs Board and they have confirmed that these agents are unlicensed. This is significant because a) a person/company is not entitled to act as an agent if not registered with the Estate Agency Affairs Board b) is not entitled to receive commission and so they cannot claim for commissions even if they wanted to fight for it c) were not entitled to offer the property in the first instance.

MY ADVICE WHEN YOU BUY PROPERTY IN SOUTH AFRICA IS:

• When dealing with an estate agent, ask him to show you a copy of his Estate Agency Affairs Board license certificate before you look at property.
• Check for well known firms through this web address www.gae-travelers.com/estate-agents
• Choose an agent that has practiced for longer than FIVE CONTINUOUS YEARS. Even in established firms fly by night agents exist, especially in residential property. It is a well known scoffing at tea parties that, in good times when the money is easy, every housewife needing a bit of pin money becomes and agent and leaves the business when it tightens up. Support the people that have dedicated their careers to serving you in real estate! There are many experienced operators to choose from.
• Do your own homework! Ask for copies of records of recent transfers through the deeds registry office & other reports showing the size of properties, houses, rooms, facilities & prices paid for them. There are several around. If your agent hesitates to provide them, look for another.
• Recruit your own conveyance attorney in any property transaction to advise you and draft your agreements (like one does in the UK) to ensure you are getting what you intend paying for. You can get that information from www.gae-travelers.com/attorneys In my view, any agent that fears or discourages you from getting outside advice has something to hide; not always, but probable. A good agent will drive you to your attorney, rather than persuade you otherwise.