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Another high profile Cape estate agency chief executive, Anton du Plessis of Vineyard Estates, has commented on the practice adopted by some estate agencies of insisting that deposits be paid into their own trust accounts, instead of to the conveyancer’s trusts.  These comments follow on the accusations now being levelled against certain high profile estate agencies regarding the misuse of funds.

Du Plessis said that, although the law stipulates that each estate agency must have a trust fund which has to be audited annually, in his company’s he almost always asks for deposits to be paid to conveyancer’s trusts. 

“One of the benefits of the agency holding a deposit is that in the event of there being a commission dispute, the agent is in a stronger bargaining position.  However, an agent cannot simply disburse money to himself from a trust account in the event of a dispute, and there are onerous regulations governing the conduct on trust accounts if a dispute does occur.

“Many reputable estate agencies, including some with nationwide franchises,” said du Plessis, “find it best to insist that all deposits or other money should be lodged with the conveyancer’s trust.  In this way they keep their hands clean and minimise the risk of fraud, misappropriation or theft.”

That arrangement, added du Plessis, is not only preferred by the vast majority of clients but also has the advantage that, in the event of a disagreement, e.g. on the commission payable, the funds are in a ‘neutral corner’, the managers of which should, as professional attorneys, be able to remain detached and objective.

Many of the general public, said du Plessis, are now wary of handing over a large deposit for fear that they will lose it in the event of a forfeiture being legally decreed or taking place without their permission.  They are, however, protected from loss by the Fidelity Fund which pays out funds to members of the public who lose money as a result of dealing with any attorney or agent registered with the fund. 

“We need to remind such people,” said du Plessis, “that the Fair Penalties Act, although slow moving, will almost always result in justice being achieved and in no innocent person being victimised or paying a disproportionate penalty.”