Holiday rental agents bound by same rules as long term rental agents
With Western Cape holiday letting being extremely popular, so comes the increase in homeowners and agents wanting to get on “the letting bandwagon” to benefit from the influx of visitors to this region, says general manager of the Institute of Estate Agents, Western Cape, Annette Evans.
However, for some time now there has been some confusion as to whether or not a holiday letting business and their agents are required to hold Fidelity Fund Certificates (FFCs), which is what is stipulated by the Estate Agency Affairs Board as a necessity for agents handling property transactions.
A recent case encountered by Institute of Estate Agents Western Cape, is one where the owner let out his home as holiday accommodation and did not know how much his property had been rented out for, nor was he made aware of all the details surrounding the use of his property – the only thing he received from the rental agent were a few ad hoc payments for what was deemed to be the owner’s share.
“I recently interviewed a few reputable holiday letting business owners to get their input on the industry and common practices,” says Evans, “who confirmed that their processes maintain absolute transparency as dictated by the Estate Agency Affairs Board’s (EAAB) Code of Conduct.” (This is downloadable at www.eaab.org.za/disciplinaries/code_of_conduct.)
Reputable holiday letting companies will adhere to the following steps and procedures:
- an initial mandate between the owner and the agency will be signed by both parties – stating the commission payable – and the majority will charge between 15% and 20%;
- each booking is usually approved by the owner beforehand;
- each contract between the owner and the client is signed; and
- commission for each let is invoiced separately and linked to a booking.
Rates charged are not always on their websites as they communicate, negotiate and vet their clients on a case by case basis.
It has to be noted, says Evans, that anyone found guilty of an offence by the Estate Agency Affairs Board, which licenses and regulates agents, risks being disqualified from practicing in real estate altogether.
For those who have been “wronged” by someone acting unscrupulously, there is recourse via the EAAB, with procedures listed on their website as to how to go about reporting and claiming from the Fidelity Fund.
“We suggest strongly that owners considering renting their premises out as holiday accommodation deal with reputable agents, who should offer complete transparency from the beginning to omit misunderstandings. Also ensure that you are dealing with someone who delivers a service as stipulated by the Code of Conduct,” advises Evans.