dwp eNewsletter

Vol 3 : Ed 5 - October 2009

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| in short |

| estate agents collecting debt, beware |

The Council for Debt Collectors has recently found that estate agents and managing agents for sectional title schemes need to register as debt collectors in terms of the Debt Collectors Act, 1998 (‘the Act’) if they collect arrear rental or levies for fees or remuneration.

In the case at hand it appears the Agents charged fees for telephone calls, letters of demand and letters in respect of the rules of the sectional title scheme in a case where they collected arrear levies (and while they were at it they charged it at exorbitant rates).

In terms of the Act and the Magistrates Court Rules, only attorneys and registered debt collectors may charge certain fees or be remunerated for the debt collection.

The Council clearly distinguished between receiving rentals and levies on a monthly basis from tenants as stipulated in a lease agreement and the collection of arrear rentals and levies. An agent that merely receives rentals payable on or before the date when it is due and payable will not fall foul of the Act, while the Council found that agents that need to collect arrear rentals or levies had three options:

1. Refer the debts to an attorney for collection in terms of formal legal process;

2. Contract a registered legal debt collector; or

3. Register themselves in terms of the Act.

The finding of the council can be viewed here:

http://www.ita.co.za/documents/BrunelloPropertyManagementCC.pdf