Weekend Argus (Saturday Edition)
How the Property Practitioners Act will regulate the industry
THE PROPERTY Practitioners Act just needs the president’s signature to come into effect, and when it does it will bring about many significant changes in South Africa’s property sector.
It will not only replace the Estate Agents Act, which has been in force since 1976, but considerably broaden the scope of that legislation to cover commercial property brokers, bond originators, home inspectors, homeowners’ associations, companies selling timeshare and fractional title, property developers and property managers as well as “traditional” estate agents.
Andrew Schaefer, managing director of national property management company Trafalgar, says the bill defines a managing agent as “anyone who collects or receives any money payable in respect of a leased property or business undertaking, or who provides, procures, facilitates, secures or otherwise obtains or markets financing for or in connection with the management of leased properties”.
He says: “Everyone who sets up in business to let and manage rental properties will now fall under the provisions of the new act with regards to trust accounts and the management of clients’ deposits and monthly rents, for example, and that means better protection for both landlords and tenants. All managing agents must hold a valid Fidelity Fund Certificate (FFC) to claim commission on any leases.”
The act provides for a new Board of Authority to replace the current Estate Agency Affairs Board, as well as further protection for landlords, tenants and other consumers of property services in the form of a separate and independent Property Practitioners Ombud to deal with complaints against property practitioners.
“The new law allows for mediation and adjudication as part of the process for dealing with complaints, and this should help the Ombud’s office to resolve most matters quickly and efficiently. However, disputes between tenants and landlords will still need to be taken before the Rental Tribunal.”
Schaefer says other important provisions of the new legislation include: A defects disclosure form is now a mandatory part of any property
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¡ sale or lease agreement. The act says a property practitioner may not accept a mandate to sell or let a property without a disclosure form from the seller or landlord. If a disclosure form is not included in a sale or lease agreement, that agreement will be interpreted in law as if no defects or deficiencies were disclosed.
The buyer or tenant of any property can request the sale agreement or lease in whichever official language they prefer, and the seller, landlord or managing agent must comply. Sample contracts in all languages are to be provided on the new Board of Authority’s website.
For a property practitioner to legally claim commission on a property sale or lease, every other property practitioner in their agency must also hold a valid FFC. To qualify for an FFC, the practitioner must produce a current tax clearance certificate and any appropriate BEE certification. Practitioners who don’t have a valid FFC could have to refund commission paid.