Whatshot

The significant news in the property industry is the implementation of the new Property Practitioners Act (No 22 of 2019) (PPA) that replaces the 1976 Estate Agency Affairs Act (no 112 of 1976) that has provided the framework for the regulation of South AfricaÕs property industry for decades. The legislation has been described as consumer-focused and designed to protect consumers in the property industry.

Some new and significant changes will impact our greater Ballito/North Coast property industry. The first interesting aspect is how the legislation now defines who a property practitioner is. The PPA broadens the scope of legislation beyond the traditional estate agents to cover commercial property brokers, bond originators, home inspectors, homeowners' associations, companies selling timeshare and fractional title, property developers and property managers.

Our local HOA's will come under scrutiny in terms of the practice of charging estate agents' accreditation fees to access and sell a property within a gated community. Developers selling their product through their own on-site sales teams will have to be registered and have fidelity fund certificates (FFCs).

From 1st February 2022 anyone who earns a commission or brokerage from the sale or leasing (including daily holiday rentals) of property needs a valid FFC, which must be produced on request. In addition, valid tax clearance certificates and BEE certificates will be required by all property practitioners.

Owners of property companies also have to be compliant, meaning every member or director of local estate agencies will require FFCs and have to comply with the training and education requirements to hold an FFC.

New FFCs will now be valid for three years instead of one and fees standardized across all professional levels, with only Candidate Property Practitioners paying a reduced fee for the first two years. FFCs are also no longer linked to an employment position but attached to the agent or property practitioner regardless of where they work.

The legislation regarding property defects will impact sellers and landlords as it will now be mandatory to include a comprehensive property defects disclosure document as part of a property transaction.

At Seeff, we have been using this document for a while as an annexure to a sale agreement but will now include this for all rental transactions. Agents can no longer even accept a mandate from a seller and landlord on a property without this completed and signed document.

This defects disclosure document will then have to be used as part of the contract and signed off by the tenant or purchaser.

The Estate Agencies Affairs Board is to be replaced by a new governing body known as the Board of Authority and will be tasked with regulating all players within the property industry and not only estate agents.

Another variation is that only those property practitioners who handle trust money will be required to have a trust account. This will simplify the administration and auditing requirements for some practitioners.

Property practitioner training has also been simplified and made more affordable with businesses being permitted to develop and run their own continual professional development training.

There seems to be overall support in the industry for this new legislation and we anticipate quick compliance by the main players.

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