Pic Credit: Liane Ellis, principal Ellis Real Estate.
The Deeds Office is open, but more than 45 000 estate agents must remain confined to their homes during Alert Level 4 of the continuing nationwide lockdown. In this letter, Liane Ellis, principal of a small estate agency, Ellis Real Estate, implore the President and government to pay urgent attention to the plight of the real estate sector.
Dear Mr President, I wish to bring your attention to the plight of estate agents in South Africa.
Estate agents’ only source of income is dependent on property sales and rentals, with 90 – 95% of agencies depending solely on property sales commission (professional fees).
Earning professional fees on property sales, which is only payable to estate agents upon the successful registration of the property into the name of the new owner/s, is a lengthy process and far from being guaranteed. Many factors may influence both the time it takes to register the transfer and whether or not the transfer is successfully completed. These factors may include the time it takes to obtain mortgage bonds for the purchasers, clearance certificates from town councils, SARS transfer duty receipts, clearance from body corporates and the like, deeds office operations, etc.
During the lockdown period, in which estate agents were unable to generate any income or secure new potential contracts of sale, any existing transactions which had been in the “pipeline” to be registered, were also delayed due to the fact that the relevant parties involved in the registration of properties (bond originators, attorneys, town council, managing agents, SARS, deed office staff) were also in lockdown, thus leaving estate agents without any income whatsoever.
When ± 45,000 (legit) estate agents do not have any income, it has a huge ripple effect on their families, their employees (cleaners, gardeners, admin workers, landlords), their creditors, their health providers, etc, etc. Without estate agents, bond originators, bank loan consultants, conveyancing attorneys, managing agents, etc also have no income. Again, it impacts not only the livelihood of these people, but also that of their families and employees. A huge ripple effect.
Whilst the government’s Covid-19 Relief Fund assistance is commendable, 99.9% of estate agents /agencies did not qualify for the relief assistance, as most of them were not registered with the Unemployment Insurance Fund (persons that earn commission only, do not contribute to the fund).
Those who did qualify and did request assistance at the beginning of April 2020, have not had any outcome or relief from the fund (month-end was yesterday already). Those who tried to claim TERS-benefits for their salaries workers from UIF, sent various e-mails to the COVID-19 department with all their documents included, even registered all on the TERS/UIF webpage, but have had NO feedback to date despite having sent various e-mails to follow up on any progress. Their workers have had NO payments from the COVID-19 TERS Benefit and everyone is in dire straits. Even those who tried getting financial TERS assistance from their banks have not had any funds paid to them as yet.
In short, MANY households dependent on the income of estate agents are in dire straits, not being able to pay their monthly commitments, their staff or even buy enough food for their families. Even if they are lucky enough to get the R350 per month social grant, it is just not enough to feed a family.
Many estate agents have requested that financial aid be granted to the industry’s legitimate agents (those paying their annual Fidelity Fund registrations/renewals, their CPD monies, etc) from the EAAB’s Fidelity Fund, but have been informed that the Estate Agency Affairs Act does not make provision for such disaster management aid / financial assistance to agents.
Mr President, as you are well aware, these are abnormal circumstances and desperate times. Surely, if government is able to convene and work out the details of a national state of disaster, which brought forth the relief funding for the nation, it is able to, with your wisdom and insight, your business sense, to amend the law to assist real estate agents / agencies during this difficult time. I am sure you can see and understand the need for such amendment.
We as real estate agents commend the NPPC’s (National Property Practitioners’ Council) proposal, asking you to allow all property practitioners to start working during Alert Level 4 of the lockdown, but we now have a financial deficit. Please urgently look into all possibilities to assist us financially asap.
We really need to get the economy going very urgently. Statistics indicate that world- wide deaths from other diseases by far exceed that of COVID-19 deaths. Please refer to what the economist Mike Schussler wrote about the situation. Maybe we need a shift in our priorities to save our economy and our people from dying of hunger.
I honestly pray that God will give you wisdom in this matter and that you will be able to assist our industry very urgently.
Lastly, Mr President, please know that I do not wish to criticize you and your advisors, but how will you be able to ensure that the millions allocated to local governments will not once again be misused by corrupt officials?
May God bless you, Mr President, South Africa and in specific all the property practitioners in South Africa. End.
(Liane Ellis sent the original letter on 1 May 2020 as a follow-up to a previous email she sent in April 2020 to the President’s office as well as several ministers. She hasn’t had any response to date on either. Editor)
About the author: Liane Ellis is the principal agent of Ellis Real Estate and has been in real estate since 2012. She also acts as the treasurer of the Multi Listing Services Gauteng North (MLS).