Property Practitioners Act
The 1st of February 2022 saw the commencement of the much anticipated Property Practitioners Act 22 of 2019 (the “Act”). The Act has several implications – not only for “property practitioners”, but for the property sector as a whole, as it seeks to provide somewhat of an improved standard of regulatory protection for consumers within the property sector.
The Act, having repealed the Estate Agency Affairs Act 112 of 1996, imposes several new obligations on “property practitioners”, a term that adopts a broad definition within the Act, for the purposes of extending the scope beyond estate agents through the inclusion of, among others, property brokers, property managers, property auctioneers, body corporates and homeowner associations.
In addition to amendments to such definitions, the following salient provisions, among others, have also been established under the Act:
- The Act establishes the Property Practitioners Regulatory Authority (“PPRA”), which will serve as the primary regulatory authority in respect of the conduct of property practitioners, in the interests of protecting consumers from unlawful and irregular conduct.
The PPRA is further empowered by the Act to appoint certified inspectors, whose powers extend to entrance, inspection, search and/or seizure, in the interest of ensuring compliance with the Act.
- Provisions relating to Fidelity Fund Certificates (FFC)
It is now a requirement for all property practitioners to present a valid FFC. This includes directors (if the property practitioner is a company) and all employees working as property practitioners. The Act also requires possession of a BEE and tax clearance certificate.
- Mandatory Disclosure form
Section 67 mandates the seller/lessor to complete a form disclosing any and all defects on the property at the time of the sale, attaching same to the agreement of sale/lease. The transition from ‘common practice’ to legal requirement for this disclosure is certainly a welcome addition for prospective buyers/lessees.
- Limitation on relationships
Section 58(2) prohibits practitioners from encouraging or causing the consumer to utilise a particular service provider. This affords consumers freedom of choice and protection from incentivised service provision and/or additional pressures that may arise while transacting with property practitioners.
It remains to be seen exactly how the industry will be affected by the implementation of the Act, however the imposition of the abovementioned procedural obligations on property practitioners is set to be favourable in the interests of property sector consumers.