Property bill misses the point
Technical deficiencies, shortcomings and errors in bill, writes Jan le Roux
The National Assembly unanimously passed the Property Practitioners’ Bill on Tuesday. The bill, which will now go to the National Council of Provinces early next year, will ostensibly deliver transformation of the real estate industry before next year’s elections.
Notably, it passed unanimously with opposition parties in support.
If the creation of a transformation fund and enforcement of the property charter was included, this might have worked.
Designations have been changed from estate agent to property practitioner and from Estate Agency Affairs Board to the “Authority”.
The wide encompassing definitions ensure that anyone remotely associated with property transactions will be affected by the bill, from mortgage originators (property finance) to property portals and property papers (advertising).
This saddles the Authority with significantly more responsibility while it is already common cause that it breaks records in bad service delivery, not to mention ongoing IT challenges.
Unfortunately, property developers can still sell their properties to consumers without having to comply with the regulations with which all estate agents have to comply, denying customers the protection rendered by the Fidelity Fund.
Attorneys are still exempted to do what they have been doing lately – to employ staff to sell properties at “discounted” rates and benefit from the conveyancing derived by the sale.
Unsuspecting agents could still wake up to find their Fidelity Fund Certificate – licence to trade – and that of the entire company cancelled because of a simple omission of one of the directors or principals – thereby forfeiting their commission for months.
Dormant trust accounts remain an unnecessary requirement at huge expense, as do compulsory audits of business accounts (instead of more affordable audit reviews).
As many as 4 500 trust accounts out of 6 000 may be dormant.
There is no motivation for all estate agents to have trust accounts.
More emphasis on ease of compliance, costs, efficiency of the Authority, streamlining of processes and focus would have gone a long way towards promoting transformation.
New entrants to the industry, mostly black to transform the industry, will still find it tough to get out of the starting blocks.
The big national real estate agency groups with existing infrastructure and resources will benefit at the expense of new black entrants.
None of the political parties has any excuse for this mostly unfortunate bill as they were well advised – in great detail – about the technical deficiencies, shortcomings and errors in it.
So much for a “critical” opposition. However, some good has come out of it: The intention to focus on transformation is laudable and will be supported. Fidelity Fund Certificates remain valid for three years. Conveyancers will be contravening the bill should payment of commission be made to unregistered “property practitioners”. This will help to combat the issue of illegal estate agents. Le Roux is chief executive of Real Estate Business
Owners, a non-profit company