Estate agent body ‘chaos’ sees authority imploding

With less than four months left for the Property Practitioners Regulatory Authority (PPRA) to have all processes in place to effectively operate under a new law, the regulator is instead seemingly in chaos.

The Property Practitioners Act (PPA) came into effect in February, with the regulator given six months to ensure all its legislative requirements were met. But the property sector watchdog has recently been gripped by instability.

Its chief executive Mamodupi Mohlala-Mulaudzi was suspended more than a month ago due to allegations of irregularities related to pension fund contributions and the appointment of six employees.

Concerned employees claimed the PPRA was in a state of chaos, characterised by financial irregularities, suspension of fidelity fund certificates and canning of transformation programmes, as well as unfair dismissals.

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New service providers were allegedly appointed and paid immediately, while existing ones had not being paid since March, with no explanation.

In just one week, more than R4 million was allegedly paid to four service providers, with an insurance company allegedly procured at a cost of more than R452,000 to offer professional insurance indemnity. The regulator had maintained there were no funds to take out such insurance.

“On 12 April, the company secretary e-mailed supply chain management (SCM) a list of preferred lawyers to deal with a court matter involving the now suspended CEO,” said an employee who cannot be named.

“This goes against SCM rules. The lawyers were signed on at a cost of more than R1 million.”

The employee said a day later, the secretary allegedly provided SCM with a list of 14 firms to conduct a forensic investigation and a service provider was appointed at a cost of R2 million.

Fidelity fund certificates

Another employee said the self-funded regulator had also exempted all estate agents from paying for their fidelity fund certificates and stood to lose more than R30 million in revenue from issuing Fidelity Fund Certificates (FFCs).

ALSO READ: Suspended property watchdog boss Mohlala-Mulaudzi’s history of wars with ministers

On 4 April, the board allegedly issued a directive that all estate agents were exempt from paying for their FFC, even though this certificate was required for an estate agent to legally sell a property and earn a commission.

“Without an FFC, an estate agent cannot operate legally.

“The result of this decision is that there will not be any revenue collection and it poses a serious financial concern.

“The PPA guidelines state that as of 1 April, the PPRA should start collecting from all existing and new property practitioners,” the employee said.

Transformation programmes – training and youth empowerment programmes – had also come to a standstill, with no single small business licenses issued.

There had also been claims of an environment of fear, with staff under constant threat of being suspended, and at least three employees had taken the PPRA to the Commission for Conciliation, Mediation and Arbitration (CCMA) for unfair dismissal.

PPRA spokesperson Lindani Tshabalala had yet to respond to request for comment.

– siphom@citizen.co.za