Property Practitioners Act

The Property Practitioners Act (No 22 of 2019) (PPA) will replace the entire Estate Agency Affairs Act (No 112 of 1976 (EAA Act) which impacts on all players in the property industry.

When it does come into force, the PPA will place additional obligations on property practitioners. Two major objectives of the Act are the protection of consumers and transformation in the property industry.

President Cyril Ramaphosa has signed the Act into law, however, the date when it will come into force is yet to be determined.  The draft regulation contained in the Act were published for public comment in March 2020. Once the responses have been processed the enactment date will be decided.

The act will impact on Agent's obligations which include:

• The prominent display of the Fidelity Fund Certificate (FFC) is mandatory in every place of business where an agent conducts property transactions as well as including the prescribed sentence regarding holding a FFC on all letter heads or marketing material and any agreement relating to property transactions whereby the validity of the certificate is guaranteed.
• Maintain a trust account. 
• Every property practitioner must for a period of five years retain all documentation relating to the financing, sale, purchase, or lease of a property.
• Maintaining mandatory indemnity insurance. 

Transformation

The PPA deals about transformation in the property sector with the general purpose of putting in place mechanisms for promoting and enhancing participation of historically disadvantaged South Africans in the sector.

A Property Sector Transformation Fund will be established from which grants will be paid to aid further transformation in the industry. Programmes include:

• Principalisation programme, to promote black-owned firms and principals.
• Regularisation programme, to promote and encourage participation of the historically disadvantaged due to non-compliance.
• Consumer awareness programme, to promote awareness of property transactions and business undertakings.
• Work readiness programme, to promote and enhance participation of the historically disadvantaged in the property sector.

Consumer protection

1. To protect consumers, the PPA specifies that property practitioners must have a Mandatory defects disclosure completed and signed for all sellers and lessors of listed properties.
2. The PPA outlaws any type of practice in which a practitioner provides a consumer with an incentive to use a particular conveyancer or service provider.
3. Intern agents will be known as candidate property practitioners (CPPs) who will be required to undergo 12 months of training under the active supervision and control of an agency principal or a qualified agent with at least three years' experience.

Many of the obligations under the new PPA are similar to those in the existing Estate Agency Affairs Act.The onus is on estate agents to ensure that they are familiar with the PPA as any agent who is convicted as a result of the contravention of the PPA is liable to a fine or to imprisonment for up to 10 years.

Helen Melon Properties is ahead of the game. We have in place the obligations that are required by the PPA to ensure that our clients are protected and to ensure that both buyers and sellers buy and sell their homes with confidence through Helen Melon Properties.