Changes await South African property law
MBOMBELA - Property owners and practitioners have to prepare for two challenges: Not only is a recession expected, but non-compliant estate agents will not be entitled to practise and to earn commission unless they meet the requirements of the Property Practitioners Regulations Agency (PPRA) before the end of January 2023.
As a result, the market will become more difficult, and there will be fewer registered and compliant agents to act in sales and rentals.
According to Shannon O’Malley, director of Mpumalanga Training Academy, this is not only negative. The market will be serviced by compliant and registered estate agents, and one can expect that a large number of non-registered and non-compliant agents will exit. This will ensure more professional and focused property services. The aim of the new Property Practitioners Act (No 22 of 2019) (PPA) is to protect the public against unregistered and unqualified estate agents, and to ensure that practising agents are properly qualified and enabled to render professional services. The act places obligations on property practitioners, including, but not limited to, the mandatory display of fidelity fund certificates (FFC), the training and prequalification of property practitioners, and reviewed trust account requirements. Estate agents who do not meet these requirements will not be entitled to commission payments by sellers or conveyancers, and will not be issued with fidelity fund certificates or renewals of existing certificates.
Protection of the public (commission not payable)
To protect the public, a property owner can and should ask any estate agent who approaches them for a mandate to sell, rent or market their property for a valid
FFC of the agent and the agency, and will not be wrong to refuse to do business with any agent who cannot render it or refuses to do so. Members of the public can also visit the PPRA’s website and verify the credentials and registrations of the estate agent or agency, before they enter a business agreement and/or pay commission for any services. Conveyancers are by law obliged not to pay commission to estate agents and agencies in the absence of these certificates.
Requirements for estate agents
No person may act as a property practitioner to sell or rent properties on behalf of other persons or entities, as an estate agent, unless a valid FFC is held by that person. The PPRA annually issues and renews
FFCs to estate agents who meet the requirements of the legislation. A holder of an FFC must prominently display it in every place of business where they conduct property transactions to enable consumers to easily inspect it, and has to ensure that the prescribed sentence regarding holding such a certificate is reproduced on any letterhead or marketing material and in any agreement relating to property transactions.
All new registered estate agents (registered in 2022 onwards) will have to firstly complete a 12-month internship with a registered estate agency, secondly, obtain a Real
Estate NQF Level 4 qualification at the same time via intern training, thirdly, complete the intern logbook as required by the PPRA, fourthly, write and pass the professional designate exam at level 4, and lastly, after that, apply to the PPRA to upgrade their status to full status agent. All other registered estate agents and candidate estate agents holding an FFC that was renewed, will have to obtain the NQF4 training, logbook training and complete the PDE 4 before the end of January. If not, they will not meet the requirements of the PPRA and will not be entitled to commission payments. Becoming a principal real estate agent requires an agent to do further training and examination to be found competent in NQF level 5 as well as PDE level 5. Being a principal member only then allows the agent to own and run their own real estate business.
Cutoff dates for compliances
All registered candidate estate agents who renewed their FFCs in 2022, have to meet the requirements of the PPRA to do the NQF4 course, logbook and PDE exams before January 31. This date is the last of several extensions of the cutoff date over the last four years, and it is unlikely that it will be extended again. All categories of affected property practitioners (estate agents) who have not qualified or have not written the PDE, are required to do so and comply with the issued Practice Notice by the end of January.
NQF4 and logbook training
“There are no shortcuts,” said Melany van der Merwe, one of the lecturers at the Mpumalanga Training Academy, with more than 20 years’ experience in real estate. “All is not lost for agents who have not registered yet. Mpumalanga Training Academy, like other registered training institutions, offers classes and interactive online courses for NQF4 and logbook training. Two courses that will be completed before January 2023 will commence in October, and more can be considered should there be a demand for more classes.” MTA also applied for an extension of scope to present NQF5 in 2023. Training and interactive classes will commence in October, and will be the last enrolment for diligent agents who would like to finalise the NQF4 and logbook training before January.
Protection of consumers
To protect consumers, the PPRA specifies that property practitioners must not accept a mandate unless the seller or lessor of the property has provided him or her with a fully completed and signed mandatory disclosure in the prescribed form and must provide a copy of the completed mandatory disclosure form to a prospective purchaser or lessee who intends to make an offer for the purchase or lease of a property. Section 58(2) of the PPRA outlaws any type of practice in which a practitioner provides a consumer with an incentive to use a particular conveyancer or service provider. Property practitioners who contravene this section of the PPRA are not entitled to remuneration. They will be required to repay any fees received for a property transaction and may be fined.
Trevor Gaw masterclass
Trevor Gaw, an icon and expert in property practising, presented a masterclass hosted by the Mpumalanga Training Academy in September, and urged estate agents to meet the requirements of the industry. “Either you are compliant and in the game, or you are out.” He confirmed that all estate agents have to be compliant by the end of January. “Selling properties is a dynamic and noble profession and a wealth-creating plan. Even in a recession, there is always stock, and the compliant and professional estate agent will always have a market and opportunities to do good to sellers and buyers alike. There is no age restriction for selling properties, and experienced and knowledgeable agents always sell more than newcomers and undereducated agents. However, to be part of this market, agents have to comply and meet the requirements of the PPRA. Likewise, property buyers, sellers and participants will be wise to seek the involvement of compliant and knowledgeable agents.
The masterclasses are free of charge and available for all estate agents. Two more masterclasses will be presented in January and June 2023, and bookings/ enquiries can be directed to info@mt-academy.co.za.