I was requested by a group of estate agents to advise them what impact the Consumer Protection Act (CPA) would have on their activities. Having completed the exercise, there are certain thoughts and observations I would like to share with your readers.
To ascertain who is a "Supplier" you must look at the definitions of "Consumer" and "Supply". You then conclude that a supplier is a person who supplies goods and services in the ordinary course of business. I feel this is an indirect way of defining a "Supplier".
When an owner of property instructs an estate agent to sell his/her property then the appointment of the estate agent will be a "Transaction" with the owner being the consumer and the agent the supplier. The transaction will therefore be subjected to the provisions of the CPA and inter alia;
- The agent must not be guilty of unconscionable conduct;
- The contract terms must be fair and reasonable;
- The owner is entitled to expect the agent to deliver timely and quality service.
Although the appointment of the agent is a "Transaction" the agreement of sale which may be negotiated by the agent may not be a "Transaction", for example, if;
- The owner is not a supplier (does not sell property in the ordinary course of its business);
- The Purchaser is ajuristic person whose assets or turnover exceeds R2 000 000.00 (Two Million Rand)
Where the estate agent approaches an owner of property seeking a mandate to sell the owner's property, then this approach falls into the definition of "direct marketing" and the owner is entitled to a 5 (five) day cooling-off period.
The proviso to the definition of"Intermediary", releases the activities of the estate agent from the provisions of the Act as an estate agent is subject to the provisions of the Estate Agency Affairs Act.
- The mandate given to the estate agent is a "Transaction" subject to the provisions of the Consumer Protection Act (CPA), but the activities as agent are however not.
As I see it, like a fighter pilot, you will be flying in and out of the range of the radar and you must at all times be aware of where you are.