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Property Law feature 3

The court a quo (the court of first instance) gave judgment in favour of the Estate Agency.

The Trust mainly argued that the Estate Agency Close Corporation did not have a Fidelity Fund Certificate as contemplated in Section 26 of the Estate Agency Affairs Act (Act).

The Estate Agency argued that the Fidelity Fund Certificate does meet the requirements of proving that the sole member of the Estate Agency and the Estate Agency (a close corporation) were duly issued with a valid Fidelity Fund Certificate.  The certificate clearly shows ex facie (on the face of it) that:

It is issued to ‘VAN DEN BLINK VERNA LOUISE’;

  1. In her ‘capacity’ as ‘Principal (Sole Proprietor at Firm); and
  2. Of the ‘Close Corporation’ called ‘VERNA VAN DEN BLINK PROPERTIES trading as Sotheby’s Lew Geffen International Realty Bloemfontein’.

The court a quo was satisfied that the Certificate leaves no doubt about the fact that it has been issued to Ms. van den Blink, in her capacity as the principal of the Plaintiff specifically mentioned by name in the said certificate.

On appeal Judge A. Kruger stated that in this case the Respondent relies on a Fidelity Fund Certificate issued to “Van den Blink Verna Louise”.  Her capacity is stated as being “Principal (Sole Proprietor at Firm)”.  The words “Close Corporation” or “CC” do not appear on the certificate.  At the bottom of the form the name “Van den Blink” appears together with her ID Number.  The certificate was issued to her, not to the CC.”

Regulation 9 of the Act states the following:

9 (1)   Any Company or Close Corporation operating as an estate agent is hereby exempted from the payment of the levy and the contribution referred to in regulation 2, provided a Fidelity Fund Certificate has been issued to each of its directors, or members contemplated in paragraph (b) of the definition of estate agent in Section 1 of this Act;

(2)     Notwithstanding the provisions of subregulation (1), such Company or Close Corporation shall in its own name apply in terms of these regulations for the issue to it of a Fidelity Fund Certificate; and

(3)     A Fidelity Fund Certificate referred to in subregulation (2) shall be issued free of charge and shall to the satisfaction of the board be displayed in a prominent position on the premises of the Company or Close Corporation concerned.

Thus the regulations make it clear that a separate Fidelity Fund Certificate must be issued to the Close Corporation.

The appeal succeeded and the Plaintiff’s claim was dismissed with costs.