The Property Practitioners Act

30/01/2022 - By Tiffany Mare

THE PROPERTY PRACTITIONERS ACT
to commence from
1 FEBRUARY 2022

The Property Practitioners Act has been composed to protect consumers in the property industry. Please take note of the following:


THE DEFINITION OF PROPERTY PRACTITIONERS HAS BEEN BROADENED TO INCLUDE;
• Estate Agents;
• Commercial Property Brokers;
• Bond Originators;
• Home Inspectors;
• Homeowners Associations;
• Companies selling timeshare and fractional title;
• Property Developers;
• Property Managers;

NEW GOVERNING BODY FOR PROPERTY PRACTITIONERS
The Estate agencies affairs board will be replaced by the Board of Authority, which will govern all property practitioners mentioned above.

ALL PROPERTY PRACTITIONERS/ANYONE EARNING A COMMISSION OR BROKERAGE FROM THE SALE OR LEASE OF A PROPERTY REQUIRES A:

• Valid Fidelity Fund Certificate,
o Prominent display thereof in the place of business is mandatory.
o The holder of the Fidelity fund certificate must ensure that the prescribed sentence regarding holding of a Fidelity fund certificate is included on their letterhead or marketing material.
o The holder of the Fidelity fund certificate must ensure that the prescribed clause guaranteeing the validity of the fidelity fund certificate is inserted into all agreements relating to property transactions.
o A conveyancer may not pay a property practitioner remuneration unless supplied with a certified copy of the Fidelity Fund Certificate
• Valid tax clearance
• BEE certificate.

CERTIFICATION, TRUST ACCOUNTS AND RECORD KEEPING
Every property practitioner must;
• open a separate trust account,
• appoint an auditor,
• provide the Property Practitioners Regulatory Authority with all information regarding the trust account and auditor appointed,
• deposit all trust money in the relevant trust account;
• keep separate accounting records in respect of the trust account and ensure for it to be audited.
• Retain the following for 5 years;
o all documents exchanged with the Authority;
o all agreements, mandates and mandatory disclosure forms relating to financing, sale, purchase or lease of property;
o any advertising or marketing material relating to the carrying on of business as a property practitioner.

IMPORTANCE OF A DISCLOSURE FORM INCLUDING THE DEFECTS ON THE PROPERTY
• An owner or lessor of a property may not accept an agreement without a disclosure form including a comprehensive list of defects on the property as an annexure thereto.
• This disclosure form must be signed by all parties.
• A property practitioner may not accept a mandate unless a seller or lessor has provided a fully completed disclosure form.
• If there is no disclosure form, the agreement will be interpreted as if no defects were disclosed to the purchaser.