The Property Practitioners Act
Category News Articles
The Property Practitioners' Act
As of 1 February 2022, the new Property Practitioners Act (PPA) officially commenced.
The legislation aims to regulate the affairs of those acting on behalf of landlords, tenants, sellers, or buyers.
The definition of a Property Practitioner has been expanded, and now not only covers traditional estate agents but also covers commercial property brokers, home inspectors, Home Owner Associations (HOAs), companies selling timeshare and fractional title, property developers and property managers (Managing Agents).
In general, this is a good piece of legislation which offers better protection for consumers.
There are five key takeaways:
- Disclosure is a big theme
It is now mandatory that the property inspection report/condition report be signed by the owner at mandate stage.
While it has for some time been best practice to include a comprehensive property defects disclosure document as part of a property transfer, it is now mandatory for all property sale and lease agreements.
No mandate may be accepted from a seller or landlord without this document, which will then also form part of the sale and lease agreement!
Full disclosure is a very good thing for consumers!!!!
- Certification of Property Practitioners has been amended
Any business earning a commission or brokerage from the sale or lease of a property is required to hold not just a valid Fidelity Fund Certificate (FFC) but tax compliance certificates too. No commission may be earned when there is no FFC. This is now going to be more stringently enforced which I personally welcome!
To reduce the administrative burden, however, new FFCs will be valid for a period of three years instead of one.
- Training
The new regulations also promise smoother and more affordable property practitioner training.
"Under the PP Act, prospective agents can study and sit their Professional Designation Examination (PDE) before joining an agency."
"No more year-long internships or expensive NQF4 exams."
If you've passed your PDE, you can literally start selling property in less than six months - under supervision - provided you complete a further six practical course modules.
- Equal Opportunity
The PPA's abolition of the practice of charging real estate agents "Accreditation Fees" in return for exclusive rights to property transactions within a development.
"Sellers and landlords within estates will no longer be limited to their development's approved agents."
So equal opportunity to all Practitioners, based on the quality of their service instead of the financial clout etc.
"Developers will also no longer be able to sell their own properties without registering as a property practitioner, which provides more opportunity for real estate agencies to provide this service.
- Transformation
There will be an establishment of a Transformation Fund, too. It will be run by an independent body appointed by the PPRA.
Training, development, and financial support will be made available to existing historically disadvantaged property practitioners, thus increasing the diversity of new recruits.
So good intentions for sure, but like all things government, let us hope it is managed and implemented effectively.
Personally, I believe that with more regulation, the industry will become a more professional industry, and the additional compliance, transparency and disclosures MUST benefit consumers.
Author: Seeff Somerset West
