It is my pleasure to welcome you all to this eighth annual general meeting of the Real Estate Business Owners of South Africa (REBOSA) – thank you for being here, your presence is most valued and appreciated. Moreover, I’m honoured to be delivering my first Chairman’s Report.
The past twelve months have without doubt been the most challenging that the country has had to face in many years. It has also been extremely taxing for the majority of our members in one way or another. The unprecedented impact of the global pandemic has disrupted all aspects of life and while the roll-out of vaccines is a welcome sign of a return to some semblance of normality, our sympathies are with anyone who is suffering and who may have lost family or friends during the crisis. Aside from being in the middle of a brutal third wave and enduring restrictions we have also experienced an incredibly painful and unsettling week of violent looting and riots. Despite these traumatic events we have again witnessed untold bravery and resilience as the taxi associations, community leaders and thousands of South Africans signed up for clean-up and rebuilding campaigns and in this regard I must applaud one of our members REMAX who have been at the forefront of delivering aid to those in need.
At this time, we remain focussed on helping our members and the communities they serve to fully recover from the unfortunate events of the last several days.
The fact that we have managed through such trying times, I believe is down to our community spirit and the hard work and dedication of our collective. We remain committed to strengthening our democracy and delivering value and benefits to our members.
Despite this period of uncertainty, we have astoundingly adapted to the circumstances and the new way of doing things.
The past year has highlighted the urgency with which we must work collectively and cohesively to design and implement solutions that are both effective and sustainable. In light of all these events I’m pleased to report that Rebosa has again achieved significant progress and successes over the past 12 months on a number of fronts which I will cover in this report.
Before I continue, I must thank our steward Jan le Roux who has been at the helm of this organisation since its inception and who over the past year has had to make the difficult decisions to keep us at the forefront of the industry. Jan, thank you for your hard work and the ensuing sacrifices you have had to make to finish the year on a positive note.
While the pandemic continues unabated the property sector has been a bright spot. House prices grew every month in 2020 and in the first four months of 2021, defying the downward spiral seen in most other sectors of the economy.
Average house prices grew by 3% for 2020 as a whole, a year in which many property economists predicted that prices would crash — similar to the devastation seen during the 2008 global financial crisis.
The drivers of house price growth in 2020 have been the increased demand for housing by first-time homebuyers, the Reserve Bank’s decision to cut interest rates by three percentage points (bringing the prime lending rate to a near 50-year low of 7%), and banks that have been willing to approve mortgage applications. Home-buying activity has been mostly seen in the house price category of R700,000 to R1.5-million – a bracket favoured by first-time buyers in 2020.
According to Absa, overall lending increased materially in Q4 2020 much of which was due to consumers taking out mortgages – and this resulted in new lending for mortgages surging to an all-time high.
However, the weak economy, further Covid-19-related lockdown measures and the recent unrest will affect the house price rally in 2021.
Covid-19 back to work
At the beginning of the year under review our industry was not permitted to trade. Lockdown restrictions relegated our industry to a level 2. Many hours and resources were spent lobbying every sphere of government to get the industry back to work. Rebosa were at the forefront of developing industry wide health and safety measures to demonstrate to Government that we were responsible to trade. Weeks of negotiation at the highest levels finally upgraded the industry to level 3 (although not gazetted) when the economy was allowed to open.
While that may seem like a lifetime ago the threat of the pandemic remains and the consequences of our actions as an industry during government-imposed restrictions remain highlighted. We therefore urge the industry to continue implementing the health and safety measures we developed that allowed us to operate in the first instance to prevent any negative reaction going forward.
After having exhausted all other options to rectify ongoing service delivery issues from the EAAB, Rebosa had to officially engage in legal action against the regulator, signalling much needed hope for hundreds of estate agents around the country still struggling to get their 2021 FFC’s.
Gauteng High Court Judge F Kathree-Setiloane ruled in favour of Rebosa (with a cost order against the EAAB) when she ordered the EAAB to issue the outstanding 2021 fidelity fund certificates to Rebosa members in an urgent application brought before the court.
While this was a victory for the industry, as we cannot legitimately trade without an FFC, the battle to hold the regulator to account remains.
Property Practitioners Act
The President has signed the PPA into law, but the date of commencement is still to be determined. The PPA repeals the Estate Agency Affairs Act 112 of 1976 (EAA) in its entirety. Draft regulations were published for public comment in March 2020 and Rebosa provided considerable input. However, as things stand, there is no firm indication as to when the PPA will come into force.
On 1 July 2020, the enactment of the Protection of Personal Information Act (POPI Act) commenced, which came into full effect on 1 July 2021. POPIA sets some conditions for responsible parties to lawfully process the personal information of data subjects (both natural and juristic persons). In response to the POPI Act, Rebosa developed a comprehensive manual and set of guidelines to specifically assist estate agency firms implement the Act.
Rental Housing Act Regulations
The Rental Housing Act, 1999 (Act No. 50 of 1999) as amended seeks to regulate the relationship between tenants and landlords by ensuring that there is an amicable dispute resolution mechanism in the rental housing sector. The Department of Human Settlements has now developed the “Regulations” which give effect to the commencement of the Rental Housing Act, 1999 as amended and Rebosa have provided the requisite commentary.
The Financial Intelligence Centre Act is South Africa’s primary anti-money laundering and counterterrorism financing legislation. While Rebosa members are well versed with requirements of the newly implemented Act we remain a resource and have a close working relationship with the Financial Intelligence Centre.
Constitution 18th amendment bill
Rebosa have submitted comprehensive commentary on the proposal to amend section 25 of the Constitution of the Republic of South Africa, 1996 (the “Constitution”) which will enable the state to expropriate land and the improvements thereon without compensation, with a view to bring about land reform and on the proposed enactment of legislation to operationalise land reform contemplated in the amendment to the Constitution, which is currently in draft form as the Expropriation Bill.
Rebosa agrees with the sentiments echoed by former President Kgalema Motlanthe when he was quoted as saying “there is no need to amend Section 25 of the Constitution to enable expropriation in the public interest because the country’s supreme law already provides for that. Section 25 protects property and recognises the need for the restoration of rights to those who have been dispossessed.
If property is not protected you destroy value, and if there’s no value then you won’t have an economy driving forward”.
A sizeable percentage of Rebosa’s 2020/21 budget was spent on legal fees resulting in a deficit for the financial year. This is the first time the organisation has not been in a positive standing since its inception.
Notwithstanding our enormous legal fees, Rebosa’s administrative costs remain low and contained. This being said, sound financial planning, prudent spending and careful budgeting has resulted in membership fees remaining unchanged for the past eight years with no foreseeable increases. We are sure this will be welcomed given the current economic uncertainty and the financial pressure our members are facing. Members were also assisted with a huge fee discount during the lock-down phase.
While the financial statements of the year under review are disappointing, our aim has always been to manage the organisation with low operating costs so that funds can be allocated to our core mandate of protecting real estate business owners’ interests. This is evident in the cost borne to ensure FFCs were issued to members through a legal process of which costs were awarded to us and which we will recoup.
Collectively our members employ 15,775 estate agents. This is a slight increase on last year. The industry currently faces massive challenges one of which is the Regulators’ incapacity to issue FFCs timeously. This will only be exacerbated when the PPA comes into effect. We have demonstrated through winning our court case that collaboration and a collective voice is the only effective force to compel the issue of FFCs amongst other issues. No single organisation, however innovative or powerful can accomplish this alone. Collective impact and unison around a common agenda is necessary to effect real change.
Every year we appeal to our members to promote Rebosa’s work and encourage the smaller independent agencies to join. Rebosa is a not-for-profit organisation and our membership fees are used to represent your interests in every sphere. This is apparent in our annual financial statements. This year it is more important than ever to increase our membership numbers so that we not only have the funds required for the minefield of legislation we have to interrogate but also to enable us to speak as the largest representation of the residential real estate industry. It is only through numbers that we will be heard and can effect real change.
The industry as a whole is largely benefitting from the work we do without being members and therefore, without contributing to the associated costs as you do. So, we reiterate our appeal that “each one recruit one”. There is so much more we can do if we have necessary resources.
As we have mentioned before, there are very few instances, if any, where the interests of principals and agents are not aligned. It can therefore be undeniably argued that Rebosa also effectively represents the estate agents employed by its members. This unequivocally makes Rebosa the most representative body in the real estate sector in South Africa today.
During the past 12 months Rebosa has intensified collaborations with stakeholders to better serve Members.
Due to the pandemic the EAAB was closed for most of the year under review. Aside from compelling the issuing of FFCs, Rebosa has been responsible for solving many of the issues associated with CPD, PDE exams and audit report submissions.
Following extensive lobbying to accommodate the industry during the pandemic, in her budget vote address on 21 July 2020, Minister Sisulu announced Covid-19 impact relief measures for property practitioners that included no penalties for late submission of audit reports until 31 October 2020 and the waiving of CPD fees the 2020 financial year.
The EAAB held its first online PDE exams on 19 November 2020 with great contestation due to system failures and results not being released in time for the future exam period. The following exams were held on 20 May 2021 with no further improvements. Many agents have been left in limbo by the shortcomings of the system and Rebosa remain in discussions with the EAAB to rectify these matters.
EAAB forensic audit
Rebosa has welcomed the minister’s forensic audit into “the regulators’ consistent inability to fulfil their mandate” and we are grateful to have this support as we continue to fight for the rights of real estate professionals.
We remain hopeful that the minister will allow transparency in its audit findings and make such available to Rebosa and its members.
Historic penalties imposed by the EAAB
It was brought to Rebosa’s attention that many agents wishing to return to the industry are now faced with heavy penalties (R240 per month) which need to be paid before they can re-register and obtain a valid FFC. This is because they did not deregister from the EAAB when they left the industry.
Rebosa obtained a legal opinion to the effect that no provision in the Act or any of the regulations empowers the EAAB to impose such penalty on any person for failing to notify the EAAB that they have stopped acting as an estate agent i.e. where an estate agent failed to apply for a renewal of an FFC in circumstances where they elected to stop being an estate agent – they simply allowed the yearly deadline of 31 October to expire without notifying the EAAB. The legal opinion asserts that any such penalty imposed by the EAAB is simply unlawful.
This opinion was communicated to the EAAB on 2 July 2020. Rebosa intends to take the matter further and is consulting with its legal team.
During the period under review Rebosa received 3 109 queries from members relating to issuing of FFCs, CPD, Education and Section 27 compliance issues. 2 881 Queries were successfully resolved. Of these 228 remain outstanding and are currently being dealt with.
I would like to thank our EAAB liaison, Fiona Chaitowitz, for her diligence and perseverance under exceedingly difficult circumstances. She provides a massively valuable service to Rebosa members and her tenacity should be applauded by all of us.
Agents trading illegally continue to undermine the industry’s credibility and place consumers at enormous risk.
Rebosa is working closely with the EAAB’s Legal and Compliance team to investigate complaints of agents and agencies suspected of trading illegally. In the period March to February Rebosa received 47 complaints that were investigated and deemed in contravention of the Estate Agency Affairs Act.
We appeal to our members to provide us with detailed information and supporting documentation/pictures etc. when reporting agents suspected of trading illegally on our website without which cases are prematurely closed without thorough investigation.
Finance linked individual subsidy programme (FLISP)
FLISP supports bank finance to first time buyers. This provides further opportunities for property practitioners operating in the affordable housing market. During the year under review Rebosa assisted many of our previously disadvantaged property practitioner members to obtain housing subsidies for first-time home buyers. We are extremely gratified that our ongoing relationship with the National Housing Finance Corporation has enabled sustainable and affordable first-time homeownership opportunities to many first-time home buyers who without this subsidy would not own a home of their own. Home ownership is possibly one of the greatest methods to bring redress to South African’s who were prohibited from owning property during the reign of the apartheid regime.
National Property Practitioners Council (NPPC)
Rebosa is one of the founding members of the NPPC which was established to unite all property practitioners under one umbrella body. This includes estate agents, business brokers, bond consultants, developers, managing agents and all individuals falling within the ambit of the Property Practitioners Act No. 22 of 2019, which provides for the regulation of property practitioners. The NPPC continues to lobby all spheres of government and is our main conduit to safeguard the industry.
In the twelve months since its inception the NPPC has successfully lobbied DHS, EAAB and stakeholders for concessions for the industry and most notably, the industry’s return to work during lockdown levels that were initially not in our favour.
Property Transformation Forum (PTF)
The Property Transformation Forum (PTF) is a joint initiative of The South African Institute of Black Property Practitioners (SAIBPP) and Rebosa which seeks to bring real estate practitioners together to devise practical and sustainable solutions for fast-tracking transformation and making the real estate sector more representative and competitive.
The PTF includes real estate practitioners, principles and stakeholders who are committed to advancing the pace of transformation in the real estate industry.
While the pandemic and current economic conditions have hampered some Rebosa programmes, we remain inspired by the open dialogue and exchange of ideas between participants. We anticipate that this forum will become an effective vehicle for driving transformation and entrepreneurship in the future and more specifically to meet the mandate of the PPA transformation agenda.
Property Sector Charter Council (PSCC)
The PSCC formed a technical committee to provide input and align with new changes to the scorecard introduced by the DTI. Unfortunately, the progress of the revised Property Sector Scorecard has been hampered by the pandemic but Rebosa remains committed to its conclusion.
Rebosa is represented on the PSCC technical committee by Mr Bryan Biehler. On behalf of the Board, I wish to express our sincere gratitude to Bryan. We are grateful for his commitment and willingness to contribute to the PSCC which goes way beyond his duty to the Board.
Rebosa was represented in the Real Estate Chamber and Provincial Committees during the year under review. We also formed part of the QCTO process for occupational qualifications development and were part of the Working Community to review the final documents for Real Estate qualifications.
We are pleased to announce that Ronel Bornman, National HRD Manager at Seeff, has again been elected to serve on the Chamber Committee and on behalf of Rebosa and we would like to thank her for her tireless campaigning on behalf of all property practitioners.
The National Association of Realtors (NAR)
Rebosa’s bi-lateral partnership with the NAR has strengthened over the years and we continue to benefit through knowledge sharing, best practice and global industry research.
Rebosa is encouraged by the steps taken by many of its members in promoting transformation but by and large we should all be concerned by the slow pace of transformation in the national real estate industry and this necessitates some serious introspection by all industry practitioners, including our members and a clear strategy to promote transformation, inclusive growth, and competitiveness.
As property professionals, we should all be excited about the possibilities and the massive scope to change the lives of South Africans through our sector. Rebosa is squarely behind the transformation of our industry. The pandemic has hampered some of our initiatives, but we are currently developing projects and are actively seeking funding and partnerships to underpin these initiatives.
Rebosa has come a long way since it was formed in 2012 and I am pleased by the progress that has been made thus far. We still however need to cultivate practical ways of mobilising our resources to effectively transform the sector.
One of the most important activities of this past year was the application we brought against the EAAB to ensure that our members have an enabling environment in which to operate. The core function of the EAAB is to enforce industry compliance through effective regulation, key to which is issuing FFCs on time. The judgment handed down on 15th March 2021 has benefitted all stakeholders, and more particularly consumers and is testimony to what we can achieve collectively.
None of this would have been possible without the support of our paying members. We owe you an enormous debt of gratitude for your unwavering support of our organisation.
Over the past year our members have had to demonstrate remarkable resilience and resourcefulness as they embrace new ways of working. We hope that during this time you have been reassured that Rebosa remains here for you and that we will emerge strongly from these strange and trying times.
Looking ahead, we have some good bedrock on which to progress our mandate for the coming year. To this end, the Rebosa management has engaged in an active recruitment campaign to increase our membership which will result in furthering our agenda.
Finally, I would like to put on record my thanks to all the Rebosa directors for their hard work this past year in very difficult circumstances. They have been very generous with their time, knowledge and experience. It is an excellent Board and I am delighted for the opportunity to work with them on Rebosa’s all important work to protect and serve the industry.
I thank you