Why a Fidelity Fund Certificate is important for you and your estate agent
“I’ve finally received my qualification to practise as an estate agent, but am still waiting for my Fidelity Fund Certificate. Some people say I can start practising as an estate agent as long as I’ve applied for my Fidelity Fund Certificate. Is this correct, and can I already practise as an estate agent?”
In terms of the Estate Agency Affairs Act (“Act”) an estate agent must have a valid Fidelity Fund Certificate (FFC) in order to receive any payment or commission arising from his or her duties as an estate agent.
In clarifying this provision it has been held by our courts that even if a FFC has been applied for, if a valid FFC was not held by the estate agent at the time of the transaction in terms of which he or she is claiming a commission or payment, the estate agent is not entitled to any commission or payment for such transaction.
The purpose of the requirement for an estate agent to have a FFC is to ensure that the public is not misled and as such the FFC is an important control measure to help reduce the risk to the public against corrupt agents.
Accordingly, a FFC will not be issued to any estate agent that, among other things:
(1) has been dismissed from a position of trust due to improper conduct;
(2) has at any time been convicted of an offence involving dishonesty;
(3) is an unrehabilitated insolvent;
(4) is of unsound mind;
(5) does not comply with the prescribed standard of training; or
(6) does not have the prescribed practical experience.
When the new Property Practitioners Bill is enacted, conveyancers may also not pay out commission, unless the estate agent has provided the conveyancer with a certified copy of his/her valid FFC. It would therefore be wise/prudent for buyers and sellers to request proof of a valid FFC before associating themselves with an estate agent or agency.
See original article.