How to Start Your Own Estate Agency
Wanting to open your own estate agency firm?
Follow these steps to ensure that you are compliant with regulations:
Principal Property Practitioner
Every estate agency firm must have a principal. A principal property practitioner is an estate agent who has completed his 12-month internship, his NQF4, his PDE4, his NQF5. He then has 2 years to complete his PDE5 exam whilst trading as a principal estate agent. His fidelity fund certificate (FFC) clearly states “Principal Estate Agent”.
If you are a newcomer to the industry and believe that you will be found exempt from your NQF4 and NQF5 qualifications, you will still be obliged to complete your 12-month internship and write both your PDE4 and PDE5 exams.
If you need to know more about the Estate Agents Affairs Board (EAAB) education regulations, please read our free easy-to-follow download.
The principal property practitioner is solely liable for any misrepresentation or non-compliance of the firm and of all agents employed by the firm.
Estate Agency Entity
You will need a vehicle within which to run your business and this can be done in the form of a Sole Proprietorship or a Pty Ltd company. If you have a shelf Close Corporate (cc) you could use that but cc’s are no longer allowed to be formed in South Africa.
We suggest that you discuss the requirements of your entity with your accountant to find the best option for your application. If you are including business partners as shareholders, it would be best to open a company to house this.
You must let your accountant know that the name of the business must be approved by the EAAB prior to reserving it with CIPC. To reserve your name with the Board click “reserve a new agency name” on their website.
Bank Accounts
The EAAB regulates that you must open a Trust Account which must be correctly designated in accordance with The Estate Agents Affairs Act. This means that the name of the bank account must reflect: “Name of Business t/a Trading Name Trust Account in accordance with The Estate Agents Affairs Act 117 of 1976”. If this is not reflected, you will incur a penalty and be sanctioned. As we all know, Trust Accounts must balance to the cent daily, and are used to house the public’s money which consists of deposits on sales/rentals and any other money the estate agency may want to hold pending a lease or sale being concluded. Most estate agency firms include a clause in their contracts stating that the monies will be held in the attorney’s trust account.
When a client pays monies into the estate agency current account, the monies being held on behalf of the client must be immediately transferred to a trust account, failing which the estate agency will be sanctioned.
You must also open a current account and may also want to hold a credit card.
EAAB Registration Compliance
All property practitioners employed by your firm, all directors, principal agent and the firm itself must register with the Board, obtain FFC’s and comply. Trading may not occur without FFC’s being issued and displayed in the registered office of the business. Any person in the agency who is liaising with buyers/sellers/tenants/landlords and discussing property/finance matters must hold a valid current FFC.
If the firm is not compliant in any manner, then all the agents are not compliant and all FFC’s will be disqualified. If an agent in the firm is not compliant then the firm is not compliant.
To register the following applies:
- Firm: Application form, proof of payment of registration fee, CIPC documents, directors information, letter from bank stating that the Trust Account is open and correctly designated
- Estate Agents: Must all be registered and comply. Required application form, proof of payment of registration fee, ID, letter of employment at firm signed by Principal.
- Directors: Must all be registered as estate agents and comply with the Boards requirements;
- Shareholders: Do not have to register as an estate agent.
- Non-Executive Directors: Must register as estate agents but do not have to comply with the Boards education requirements. These directors are not involved with the firms Trust Account, Estate Agents or the Public. They could be investors in the business or involved in aspects of the business other than property, ie HR.
Registration requirements may change, and it is best to find these requirements on the Boards website.
Audits
The EAAB inspector randomly audits estate agencies to check their compliance in the following:
Financial: Audit of trust account to be submitted 4 months from date of year end
Interest on deposits: in Trust account to be allocated according to regulation
Contracts of sale and lease: to be contained on file with all FICA requirements and FICA reporting system
Agents: Education compliance
The following must be displayed in your registered office: EAAB Code of Conduct, Property Practitioners Act, Fica Reporting Officer, FFC’s of all agents and directors and firm
PropAcademy sell an easy to follow course, Pre Audit Evaluations which detailing all EAAB compliance requirements.
Policies and Procedures
It is advised that all estate agencies hold a Company Policy Document covering all aspects of their agency.
Contracts
It is advisable that you obtain the contracts that you need to run your business from a property attorney.
I want to know how to be come a real estate agent
Hi Ntsikelelo, thank you for writing in. The steps are clearly indicated on our BLOG page in our article “How to Qualify as a Full Status or Principal Real Estate Agent”. Please also click on the contact us tab and send us your contact number and we can call you to discuss.
I want to become a Principal real estate agent.
Hello,
Quick question. If the Agency will be operating online only where do we keep the following documents: EAAB Code of Conduct, Property Practitioners Act, Fica Reporting Officer, FFCs of all agents and directors and firm?
Thanks.
If you are on online firm, you still must have a registered office in terms of your EAAB registration application, in terms of your CIPC documents – that is where they must be displayed. Because you are online, you would also have to display these documents on your online platform where your agents/staff access information. Does that help?
That was my initial assumption, thank you that helps yes.
Hi,
Can a non-executive director serve on the board of an estate agency if he has his NQF 5 and has been registered as an intern, but have not completed a 1 year period of internship and have not done a logbook/written PDE exams?
Hi Jeanine
Only non executive directors do not need a FFC and therefore does not need to comply with education requirements. A non executive director is a director that does not deal with the trust account of the entity and does not deal with the staff/estate agents or the public.
Hi, I am an eager agent who wants to open my own agency. Do you have any courses on the process of opening an agency?
Regards
Hi Gary, unfortunately, we don’t have a course on opening your own agency. We have courses on how to open and run your own company, these courses are not specific to agencies. If you need advice, Sarie runs a company that handles EAAB services and you can contact her on 067 748 8266.
I want to become a real estate agent but I don’t have any form of qualification neither the experience. Please help me.
Thank you
I would suggest starting with the Logbook Knowledge course, this will act as a stepping stone in your journey. Let’s discuss this in more depth, you can send us your details by clicking on the contact us tab and we will call you.
Hi really like to open my own agency where can I obtain these certificates
Hi Mpho
Please call the office or Judy directly 0861112281 or 0768703069
Hi. I’m experienced free lance estate agent and i only attended basic training in 2008 but now i want to start my own agency and obtain more.
I’m an intern estate agent at the moment but i want to continue but can i register my agency while working?
What are the terms and conditions of decision i want to take.
Hi Palesa
Please can you contact us directly so that we can assist you with your query – [email protected] 0861112281
Thank you
Hi. I would like to start my own Real Estate Agency, I’ve got 6 years experience as an agent. I haven’t been operating since 2018 and since then I haven’t been paying my FFC cause I have started an Upholstery business.
What are the terms and conditions…
Hi Harry
I have to refer you to the EAAB, please phone them and discuss your profile with them as they have access to information that will determine your next steps when opening an agency.
Once they advise you, we are here to assist with courses, please send us your info via the contact us tab above.
Hello Pisto. I have a Landlord Management firm and would like to chat with you.
Regards
Nkululeko Mpambo
Hi Nkululeko Mpambo – we have your private detail and will give them to Pisto should he respond. Have a super day.
We had a family business with all registrations with the EAAB done. my wife was the principal and she passed away on the 29th JUNE 2021. We have trust account i have changed the CIPC documents on to my name and carrying on with wthe business. i have 8 years intern experience and have now registered to do my RPL. and on my way to do RPL and PDE 4?5 to become a principal. We do rentals. i cannot afford to close this business, what is my way forward. i am desperate.
is there any PRINCIPAL that is willing to come on board. i am in LADYSMITH, KWA ZULU NATAL. RUNNING BUSINESS. PRINCIPAL PASSED AWAY ON 29TH june 2021 CONTACT ME 0828281430
Hi Ravpith
I will pop you a whatsapp. Kind regards, Janet 0824146686
Hello im an attorney, do i have to go through all requirements because i have trust account
Hi whats is the ruling if u had done your MONTHS Intern ship and done your log book
is there a opportunity for ruining your own business as a principal or can you operate while doing the NQF4 AND PDE 4 AND PDE 5 EXAMS I Am in the process of doing my RPL With Pro academy Question still remains can i operate my business while doing all of the Above O do i need to have A principal or principal status
Hi
I really want to know how i should start my own estates agency,wat are some of the qualifications ,am knew to this but i feel like starting up