How the new Property Practitioners Act affects you
Category Industry News
In February this year, President Cyril Ramaphosa announced the commencement of the Property Practitioner's Act (PPA), which is widely expected to bring some big changes to the industry.
But how - and who - does the PPA effect?
Firstly, the PPA has been designed to protect the consumer, which is good news, with some of the biggest changes coming into effect doing exactly that. The legislation has made some key changes, all of which will lead to better regulation of the industry.
So, what are the major changes that have come from this piece of legislation?
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Who is a property practitioner?
That's what the PPA will define, with the act broadening the definition beyond just traditional estate agents. It will now also cover commercial property brokers, bond originators, home inspectors, homeowners' associations, companies selling timeshare and fractional title, property developers and property managers.
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Fidelity Fund Certificates
The act has tightened regulation around this with anyone who earns a commission or brokerage from the sale or leasing of property needs a valid Fidelity Fund Certificate, which must be produced on request from a seller or landlord. In addition to the current requirements, it must now include possession of a valid tax clearance and BEE certificate. It is also required that not just the agent/s, but the agency/business and all of its property practitioners must be fully compliant.
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Property defects
It is now mandatory for all property sale and lease agreements to include a comprehensive property defects disclosure document as part of a property transfer. No mandate may be accepted from a seller or landlord without this document, which will then also form part of the sale and lease agreement.
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New Board of Authority
The current Estate Agencies Affairs Board has been replaced by the Board of Authority with the latter governing the property profession across the board, not just estate agents, as is currently the case.
"We certainly welcome the new act," says The Agency's Kyle Leigh.
"Not only will it better regulate the current processes and structures in the industry, but it will also provide additional consumer protection, which is a huge part of the act itself.
"The introduction of the mandatory disclosure form around a property's condition is creating a lot more transparency between buyers and sellers, which can only be a good thing. And on top of that the regulation of estate agents and their FFCs is a very welcome addition because we want people to know they are dealing with registered agents.
"We have been advocating for this kind of transparency for a long time now, so are very happy to see these regulations being instituted."
At its heart, the PPA has put the needs of the consumer first and has been largely welcomed by the industry, which at times has struggled with a reputation for a less-than consumer-focused service offering.
According to Leigh, the changes are a win-win for everyone. Consumers can forge ahead with a purchase / sale of a property knowing that their interests are protected, while our property advisors can continue offering their services knowing that the entire industry is being managed to a higher ethical standard.
Another positive development is the introduction of a transformation fund to try and get the industry ahead of the curve. The path to certification has been made a lot easier and this will no doubt drive the necessary changes in the industry.
Time, of course, will tell if the PPA lives up to what it created to do, but on the face of it, it's a positive move towards a better regulated industry. It's garnered a positive reception, but it's hugely important for consumers and industry stakeholders to ensure they are familiar with the changes that have been instituted.
If you would like to know more about the PPA and the regulations within, reach out to one of our Trusted Property Advisors at The Agency.
Author: The Agency Property Group
