Reference to IEA Tariffs no longer permitted in any documentation



There are evidently still estate agencies in the Western Cape that need to bring their printed mandate and contract documents up to date, says Vivien Marks, regional manager of the Institute of Estate Agents Western Cape (IEA). She says even though the IEA abolished its recommended tariff of fees and commissions a year ago, there are still agencies that are presenting clients with documents that state commission will be charged according to the tariff. The IEA has repeatedly urged firms to remove such references from their documents, and is willing to provide model alternative clauses on request. Marks says one agency's failure to update its deed of sale document has created a situation which looks as though it is going to go to court. "The implications of not removing references to the IEA tariff from a contract can be serious," says Marks. "Only a few weeks ago a local estate agency drew up a deed of sale using a document that states the seller will pay commission according to the IEA tariff. A dispute has since arisen which may go to court, and the seller's attorneys have asked for a copy of the institute's tariff, which we cannot provide because it no longer exists. What this will do to the seller's case remains to be seen. If it goes to court, the estate agency may well be publicly embarrassed for not having its contract document up to date." As a result of pressure from the Competition Commission the IEA abolished its recommended tariff in March last year. This, and the fact that the commission subsequently imposed a heavy fine on the IEA for having recommended tariffs in the past, was widely publicised in the media, and in addition the institute informed every single one of its member agents in writing, says Marks. "On instruction from the Competition Commission, the institute even destroyed all its remaining unsold stocks of tariff books. The IEA has also advised agents to remove from their documents any clauses which state that they charge commission according to the IEA tariff, because there is no longer any such tariff. Estate agency fees are, and always have been, negotiable, and it is up to each individual firm to set its own rates. Even if they happen to be the same as our old tariff, we cannot and will not endorse them in any way." Marks says the IEA has rewritten its own contract documents to remove references to the tariff, and is willing to provide examples of the rewritten clauses to any estate agency - free of charge, whether an IEA member or not. Examples of model clauses for contracts can be obtained from the IEA's website at www.ieasa.org.za