Estate agents institute agrees to pay penalty

Posted On Thursday, 09 December 2004 02:00 Published by eProp Commercial Property News
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Pretoria - The Institute of Estate Agents of SA has agreed to pay an administrative penalty of R522 400 for indirectly fixing the fees of estate agents in terms of a consent order agreement confirmed by the competition tribunal yesterday.

 

Bill RawsonIn addition to paying the fine, the institute has agreed to cease and encourage its members to desist from engaging in anti-competitive conduct involving the direct or indirect fixing of a purchase or selling price; refrain from distribution of the tariff book; and take prompt and effective action in ensuring that its members terminate their role in implementing the anti-competitive conduct.

Mark Worsley, appearing for the competition commission, said the penalty amounted to R100 a member but there were many mitigating features in the matter, including that the institute had ceased the conduct when it became aware it was in contravention of the Competition Act.

Bill Rawson, the Institute of Estate Agents of SA's president, said yesterday that each of the institute's regions would pay a portion of the fine in accordance with the number of members and the commission had allowed it to pay off the fine in six monthly instalments.

The consent order was reached following an investigation of the Institute of Estate Agents of SA, a non-profit organisation representing the interests of about 4 000 affiliated real estate agents, by the competition commission after a complaint was lodged by the competition commissioner, Menzi Simelane. 


The commission's investigation revealed that between 1999 and 2002 the institute recommended professional fees and commissions for estate agents' services by publishing a tariff book that recommended a 7.5 percent commission on residential property sales and this rate therefore served as a benchmark in the estate agency industry for residential property sales.

The institute previously indicated that it did not believe it was guilty of any offence and had entered into the consent agreement under duress.

This was because it claimed it had an agreement dating back to about 1984 with the competition board, the predecessor to the competition commission, which had advised the institute to use recommended rates and tariffs.

The new Competition Act made the institute guilty of an offence but the institute had last published a tariff list in 2002.

It claimed that it had immediately passed a resolution abolishing these tariff guidelines when the prosecution of other professional bodies by the commission was brought to its attention by the press.



Last modified on Monday, 09 June 2014 15:30

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