How to protect yourself against rental scams

The Sunday Times recently reported that yet another unsuspecting couple were swindled in an online property scam. A Gordon’s Bay businessman was alerted by a real estate friend that his house was being advertised for rent on Gumtree, at a very low price. Von Gossler reported the fraudulent advert to the police, but unfortunately the damage was done and a family arrived at his front door to move in, after having paid a R20 000 deposit.

"The Fidelity Fund has been in place since 1976 and estate agents are required by law to have their certificates on display and to have them available to show them to consumers on request,” says Swain.

“It is so important for consumers to determine if an estate agent is duly registered with the Estate Agents Affairs Board (EAAB), before paying any deposits on any contracts, be it letting or sales contracts,” says Jan le Roux, CEO of Real Estate Business Owners of South Africa (REBOSA). Should a consumer’s deposit be stolen from the trust account of an estate agent, the Fidelity Fund will in due course make good the loss.

Bruce Swain, CEO of Leapfrog Property Group, shares that there are many ways of checking whether an estate agent is legitimate:

1. The estate agent can be asked to supply proof of registration of the EAAB, and even proof of the account in question being a trust account - this is actually very important because the Fidelity Fund will not cover theft of fees that have not been deposited into a trust account.

2. Should the agent’s full name be available, registration can be checked on the EAAB website. This, however, is problematic because the search facility will only operate if the exact full names are available, which is seldom the case.

Should the agent, however, have forwarded a Fidelity Fund Certificate those names will be shown. Even if this is the case, potential buyers and tenants should still confirm that the agent’s registration is still valid as the certificate in itself is not proof of such.

“It is unfortunate that consumers have not taken cognisance of this fact. The Fidelity Fund has been in place since 1976, and estate agents are required, by law, to have their certificates on display and to have them available to show them to consumers on request,” says Swain.

“This, however, is very rarely done, and it’s regrettable that consumers are afforded this protection and not using it.”