Illegal estate agents - a property industry curse

The digital certificate reduces the lead time it takes to reach the qualification holder because it can be shared in real-time and can be verified in real-time.

Stephen Logan

3 minute read

Illegal estate agents - a property industry curse

This post appeared on the website

The Estate Agency Affairs Board (EAAB) is in the process of launching an initiative aimed at countering the prevalence of so-called estate agents operating throughout SA without being in possession of a valid, current Fidelity Fund Certificate (FFC). It is illegal to do so.

Part of the initiative involves the introduction of PrivySeal, a real-time authentication tool.

The process includes the incorporation of a PrivySeal graphic into the email signature of all agents which when clicked, will display the relevant agent information from the EAAB database, thus confirming said agent’s authenticity. Websites and social media must also display the signature.

Another part of the initiative is aimed at increasing consumer awareness towards encouraging consumers to only deal with registered agents. There are no details available yet as to what this will entail.

This initiative is to be welcomed. Its success will be measured in simple terms: by getting more and more sellers and buyers to ask the question, ‘Are you a registered agent’, and demand to see the proof. One could argue that this is already possible without PrivySeal as every FFC issued has a small tear-off strip designed to be carried in a wallet or purse and, in theory it is possible to also check online at

That said, the initiative, while welcome is not enough on its own and perhaps of lesser importance than other options. If the EAAB is really serious about eradicating this blight on our industry, it is important to look wider and tackle other practices that allow these “illegal” to exist and prosper.

Amongst such practices are:

  1. Culpable, unscrupulous principals: Many, probably most of these illegals, are currently operating with the full knowledge and support of principals with branded offices and advertising.

    While the introduction of PrivySeal will make life more difficult for them, some will find ways around it. For example, it is quite feasible that some principals will advertise in their own name and then farm the leads out to these illegals to deal with the consumer, many of whom (as is the case now) will remain unaware of FFCs and PrivySeal.

    These principals are the real culprits.

  2. Unfettered ability to advertise: At the moment one does not need an FFC to advertise property for sale or rent. All you need is sufficient funds. While unscrupulous principals and others might find a way around as outlined above, it would again make life difficult for illegals if all property advertising companies, newspapers, portals, magazines and whatever, would simply insist that all listings require the PrivySeal signature as is stated on the EAAB website.

    Can the EAAB broker such a deal? Time will tell. If they can’t, it places significant pressure on the awareness campaign to achieve an extremely high success rate.

  3. Illegal commission payments: The Estate Agency Affairs Act (Act) confines the payment of any portion of commission earned on a property transaction to those in possession of an FFC. So the question must be asked: how are these illegals getting paid?

    While there might be a number of ingenious options, in simple terms the funds are most likely flowing from an attorney to an illegal, or from an attorney to a principal (or other FFC compliant agent) and then to the illegal.

    The legal brains I’m sure, will be looking into solutions here.