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Illegal business brokers are not entitled to earn commission
Cape Town – 15 September 2016
The buying and selling of businesses is very intricate and detailed,with a minefield of legislation governing the contractual obligations between the buyer and seller.In many cases the sale will be finalised by a business broker who is regulated in terms of the Estate Agency Affairs Board Act.Such broker is required to be registered with Estate Agency Affairs Board (EAAB) and must hold a valid fidelity fund certificate for the current calendar year.
The EAAB Act defines an estate agent as the following in section 1 of the Act:
a)Means any person who for the acquisition on gain on his own account or in partnership,in any matter holds himself out as a person who,or directly or indirectly advertises that he,on the instructions of or on behalf of any other person --
i)Sells or purchases or publicly exhibits for sale immovable property or any business undertaking or negotiate in connection therewith or canvasses or undertakes or offers to canvass a seller or purchaser therefor,or
ii)Lets or hires publicly exhibits for hire immovable property or any business undertaking or negotiates in connection therewith or canvasses or undertakes or offers to canvass a lessee or lessor therefor ,or
iii)Collects or receives any moneys payable on account of a lease of immovable property or any business undertaking,or
In order to avoid suffering a huge financial loss,when engaging the services of a potential business broker,you should request the following:
A Fidelity Fund Certificate is the only guarantee that business buyers and sellers have against misappropriation of funds by the broker.The EAAB’s Fidelity Fund will only reimburse victims of fraudulent transactions by business brokers where there is a valid fidelity fund certificate.
Like there are thousands of unregistered estate agents selling property,so too are there unregistered business brokers concluding business sales without being registered.The EAAB has sent out numerous communications warning the general public to refrain from engaging the services of such illegal brokers.These illegal business brokers ARE NOT ENTITLED TO COMMISSION.
One such unregistered and illegal business brokerage,operating on the West Rand of Johannesburg,is Business Xpress which is owned and operated by a Mr Adrian Sissing.On the Business Express website,on their Broker Assistance page,reference is made to clients having to deposit the purchase price into the Business Xpress Trust Account.If neither Adrian Sissing nor Business Xpress are registered with the EAAB,it means that any losses sustained from funds being deposited into such an account cannot be recovered from the Fidelity Fund of the EAAB.
By Wesley Fester
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