For us to be able to get an insight on the above subject, it will be necessary to define the meaning of a quack. A quack is generally defined in the dictionary as a person who is dishonest and claims to have knowledge and skills of a particular discipline.

Consequently, the quack that we are considering in this particular regard is a person who generally claims to have knowledge in real estate while he does not. He has not undergone any training and naturally will not work in the capacity of a manager. He is a person who has no knowledge of the job, and probably has been employed by another quack and will therefore only provide inadequate advice. He may not even be aware of the laws that affect property, i.e.

• Cap 301- The Landlord and Tenant (Shop, Hotels & Catering Establishment) Act.
• Cap 296- The Rent Restriction Act.
• Distress for Rent Act and Auctioneering Act
• The Rating Act and The Valuation for Rating Act.

He is not affiliated to any association that would offer guidance and control in his operation of professional services. He is also therefore not committed to any law and will charge fees on an ad-hoc basis, but certainly not to the interest of his clients.

Having briefly described the nature of a quack, this will be an opportune moment to examine the dangers that are inherent in dealing with one. We can only do this by examining the services that are normally provided by an estate manager or property consultant. The services of an estate agent/property consultant could be categorized in three:

(a) Letting and Sale Services
(b) Management Services
(c) Valuation Services

Letting and Sale Services

• Letting Services
  Most quacks in letting do not have fixed places of work or offices and would normally be considered as briefcase agents, booth agents or mobile agents. They would advertise in the newspapers using a telephone booth or mobile number and request to meet the prospective clients in hotels or petrol stations to arrange for viewing of the properties.

  On meeting they would take the client to empty/vacant premises, where they would have invariably made arrangements beforehand for viewing the property, by bribing either the workers painting the house, or the watchmen guarding the house.

  On finding that the client is interested in the property, they would negotiate on the rent for the property to such an extent that the client would not refuse due to the rate being very low. They would then propose that the client visits their lawyer, who would obviously be another quack, in a dingy office somewhere in the back streets of the town. These offices would be in most cases temporary rented for the purpose, and when the client pays the required rent and deposits, the office would be closed. The next day they would organize another scam using different telephone numbers and lawyer's offices. This would continue and unfortunate and unsuspecting clients would continue to be cheated.

  A different quack would operate more honorably by at least having a registered office. However, his services would involve charging clients for viewing fees, and also charging both the landlord and tenant some letting fees, which are obviously exorbitant. He would not vet the tenants, as his main purpose would be to make a kill at the earliest moment. This would lead to the landlord losing money, as the tenants would unlikely stay in the premises, as they are not suitable or cannot afford the rent for too long a period. The landlord would then have to look for another tenant even before a year has ended.

  The above pitfalls are unlikely to happen if one was to use a professional agent as this agent has a reputation and goodwill to uphold. He is also governed by the Institute of Surveyors of Kenya and would in all cases be qualified for the job.

• Sale Services
  On sales, quacks would normally not have proper instructions other than the knowledge that the owners are in the market looking for buyers. Indeed in most cases, there would be other properly appointed agents and the quacks would therefore masquerade as joint agents.

  In identifying prospective buyers, they would defraud them on charging of viewing fees and deposits which, when received the quacks would disappear. The more "honorable" quacks would in some cases approach the owners to introduce the prospective buyers and if they are successful they would earn a double commission from both the seller and buyer which is illegal.

  Professional property consultants would not follow this path and are generally properly appointed and instructed to sell before embarking on marketing of the property. They also charge fees in accordance with Estate Agents Act and would thus not exploit the buyer and/or seller.

Management Services

A professional manager is required to provide certain services, which I will define and also indicate the inherent dangers while using a quack.

• Rent Collection
  A professional manager collects on behalf of the landlord, security deposits, rent, service charge, utility deposits and generally other payments that relate to property. He is required to receive this on behalf of the landlord, and account the same at an agreed period of time.

  This is generally adhered to by property managers, but when dealing with a quack all manners of issues will arise to ensure that he has an opportunity to invest the money a longer while for his own benefit, especially from the interest. In most cases, he will not open a client's account, which can easily be audited, but will even ensure that his personal money and that of his client are banked in one account so that these funds can be at his disposal; at the peril of his clients.

  There is a big possibility that a quack will collaborate with the tenants by allowing them to disappear before settling all dues. He could also liaise with the auctioneers and debt collectors with a similar purpose of defrauding the landlords.

  On registered leases, it would be suicidal to collect and receive rent on leases that have been determined. Most quacks will not know about this, and invariably put clients/landlords at the risk of having protected tenancies.

  Service Charge which we have mentioned above, is an complicated element of what tenants pay, and unless one were to understand it, there is a possibility that the landlord would have to fund all the operations of the building because of the inadequacy of same. Most quacks will not know when and how to review the service charge and also how to administer it.

• Payment of Operational Expenditure
  Land Rents/Rates - These are statutory payments, which are payable to statutory bodies and absence of payments would lead to punitive interest penalties. The quack would not know the import of this and would reason that they could pay at any time, while of necessity these are supposed to be paid before expiry of certain periods.

  Situations arise when the above have to be reviewed by the Statutory Bodies demanding them and a professional manager has the necessary knowledge to object on the review of these payments. A quack would definitely not be in a position to do so, essentially meaning that the landlord would be put in a position of not knowing whether he is paying a fair figure or not.

  Insurance - there is a reason for insurance, which protects the landlord in cases of a calamity.

  The professional manager would provide appropriate advice to the landlord on the necessary policies. The quack would assume this is just a normal item and would pay it at any time, and would not have the faintest idea on what policies to recommend. He would also not know how to go about registering a claim with the insurance companies and dealing with the same. This obviously means that the landlord would be at a great risk of losing his property in case of calamities.

  Utilities (Water, Electricity and Telephone) - It is quite simple to say that payment of utilities is an easy job. However there is more involved to it than just receipt of the bills from the utility companies and payments. A professional manager would be in a position to be able to analyze the total bill and determine its correctness or fairness, as he has adequate data to be able to analyze the bill.

  A quack would not know anything about it and would generally pay as he receives the bill, and in case of a big adjustment, may not necessarily know how to handle it with the utility companies.

  Maintenance Contracts in Property Management - For an efficient management, several contracts are required to be entered into, i.e. security, cleaning, maintenance of lifts, pumps, generator, fire equipment, electric fencing etc. A property manager is well versed with tendering or securing quotations on maintenance contracts. He has adequate knowledge to analyze quotations or tenders received and will recommend to the landlord for his benefit.

  While a quack may make attempts at analyzing the tenders/quotations, the inherent dangers are that he can use this as a tool to defraud the clients, for his own benefit. I am not saying that a professional manager cannot do the same. He can easily do it, but there are professional body/bodies that would look at the way he has dealt with the situation, and if necessary discipline the manager without the client necessarily going to court; which is a lengthy and expensive process.

Valuation

Strangely enough there are very few quacks providing valuation services. However, as every market has a mad man, there are a few people who present themselves as valuers while they are not. In most cases, these have no fixed aboard and should therefore be considered as fly by night valuers. They may offer to provide valuation services at cheaper rates than the professional firms. However, this is at the risk of getting a valuation report, which in most cases will not be accepted by reputable financial institutions, as the opinion given by these quacks cannot possibly be relied on. These quacks like all other quacks will not have an insurance cover and the opinions they give to the clients is therefore bound to unreliable should a problem arise with the valuation.

They will not be there in the future and their continuity of the services cannot be guaranteed, and if it was necessary to verify the opinion given, then they will not be available for the same. They are also not governed by any Institution or Regulatory Body and therefore it will be hard to control them.

General

Fees - An Estate Agent or Property Consultant is guided on his fees by the relevant Acts. However, quacks would normally charge fees derived from nowhere and based on their particular interest at a particular time. These fees may be over- charged or too little which means they would be over-exploiting the clients, or if the fees were too little, they would not be able to offer proper and adequate services on the fees that they have received.

Consequently, on the whole it would be advisable to rely on professionally qualified consultants to handle estate or property services.

D.K. Machua
B.A. Land Economics(Hons) MISK.
Registered Valuer & Estate Agent
The Land and Property Digest, September 2003

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