Estate Agency Board members dissolved - real estate audit requirements remain in force

Whilst Human Settlements Minister Tokyo Sexwale recently placed the Estate Agency Affairs Board (EAAB) under administration, the three months audit extension granted by the EAAB until 30 September 2012 remains in force.

Yusuf Dukander, Project Director: Financial Services at the South African Institute of Chartered Accountants (SAICA) says the audit requirements provide the EAAB with much comfort on the fair presentation of estate agencies financial statements. He believes that it would also highlight reportable irregularities and non-compliance.

"Failure to lodge the 2012 audited business and trust account financial statements will result in the EAAB not renewing estate agencies and principals Fidelity Fund Certificates for 2013, which are essential to conduct business", warns Dukander.

Dukander draws attention to the fact that where Housing still remains a major priority for the Department of Human Settlements (DHS), estate agencies can play a crucial role and act as a stimulus in an emerging economy. "But we need to pride ourselves in that proper governance and management of the real estate sector will drive growth and create jobs", he added.

Recently, the EAAB's administration, powers and functions entrusted by the Estate Agency Affairs Act of 1976 were placed under the executive authority of the DHS. Dukander explains that consequently, SAICA has initiated high level contact with the Department to participate in the legislative review, highlighted by the Minister, so as to bring the institution in line with the Human Settlements imperative.

Dukander states that the legislative review should adopt a holistic approach as there are mismatches with other pieces of corporate law legislation. "This is an opportune time to rewrite the rules and ensure that the real estate sector is properly regulated and in so doing, meet the department's imperatives", he says.

"SAICA can then only engage more fully with its members and the public to capture their views on policy and the resultant legislation. This exercise will support a structured process of engagement between Government and business on the legislation and regulations therein", Dukander concludes.

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