PROPERTY PRACTITIONERS DRAFT BILL

WHEN it comes into effect, the Property Practitioners Draft Bill will replace the Estate Agency Affairs Act of 1976.

“This bill is part of government’s response to the changing market conditions, and it seeks to create an enabling environment to enhance economic activity within the real estate sector. It will also help open up market opportunities for new entrants into the real estate sector, especially black people who were previously disadvantaged‚” said Human Settlements Minister Lindiwe Sisulu.

Neil Gopal, CEO of the SA Property Owners Association (Sapoa), says the association supports the objectives of the draft bill, which aims to provide for the regulation of property practitioners, and continuation of the Estate Agency Affairs Board (EAAB) as the regulatory authority.

It also aims to provide for the continuation of the estate agents fidelity fund as the property practitioners fidelity fund, provide consumer protection, and provide for property-related matters in general.

He says Sapoa conducted several engagements over the past five years with the EAAB to find common ground on mat- ters affecting the commercial property industry. However, the current version of the draft bill does not take into account Sapoa’s previous recommendations.

Arnold Maritz, who has been examining the Property Practitioner’s Bill on behalf of Lew Geffen Sotheby’s International Realty, says despite the government’s extensive redrafts there are still numerous issues that – depending on implementation – are at best ambiguous and at worst extremely disquieting.

“One of my biggest concerns is the new definition of ‘property practitioner’, which the industry and public understand to be estate agent. But under the new act, who precisely can be called a property practitioner becomes blurred and might include bond originators, financial advisers or even caretakers of buildings.

“Another section of the bill that is not clear deals with the new industry oversight body’s right to withhold a company’s fidelity fund certificate on grounds of BEE non-compliance, but nowhere is it stated what that compliance entails. Is it staff ratios, training programmes or even company ownership?”

Maritz says the bill’s final stand-out problem issues relate to the national fidelity fund, to which the entire industry has contributed for decades and which primarily exists to protect and compensate consumer losses suffered as a result of irregular or illegal real-estate practices.

“Under the proposed legislation, the new real estate over- sight body has carte blanche to dip into the fidelity fund for a host of vague reasons such as the ‘distribution of grants’ and for ‘educational purposes’. They can even place the fund under external management, which in the current political climate is cause for concern. This fidelity fund is sizeable and has always existed to protect the public. That should remain its core function.”

Maritz says a problem the property industry is encountering more frequently as greater numbers of South Africans take their first steps up the property ownership ladder is criminals who become fly- by-night, unregistered estate agents and take deposits on properties, then disappear with the money.

“Surely the not-insubstantial national fidelity fund would be better spent helping all consumers who have suffered losses at the hands of ‘estate agents’, regardless of whether or not those agents possess fidelity fund certificates?”

Adrian Goslett, regional director and CEO of Re/Max Southern Africa, believes the bill will give the EAAB an opportunity to be firmer on the industry and hold real-estate professionals more account-

PICTURE: PEXELS The draft Regulation of Agricultural Land Holdings Bill, one of a raft of bills affecting property, was published for public comment in March.