New Property Practitioners Bill - here's what it means for you
Category Industry News
The Property Practitioners Bill has been signed into law by South African President Cyril Ramaphosa, and it is likely to have wide-ranging effects on the Real Estate Industry. The bill, which effectively repeals the Estate Agency Affairs Act, will come into effect once published in the Government Gazette.
The bill will also provide for the continuation of the Estate Agency Affairs Board (EAAB), which will now be known as the Property Practitioners Regulatory Authority. The objective of this is to ensure the regulation of Property Practitioners in how they deal with consumers, market, manage, finance, let, and the sale and purchase of property. The Authority will also be responsible in educating - and protecting - consumers from undesirable practices.
It is a wide-ranging bill, but three key takeaways is that the bill will impact on Property Sector transformation, Consumer Protection and, perhaps most importantly, the setting up of a separate Ombudsman.
"Essentially, the bill has been drafted in an effort to better manage the property sector, which has maybe not been regulated as well as it should have been over the past few years," says The Agency Property Group's Kyle Leigh.
"I think we are going to see a lot more responsibility falling on the agents now. For example, if there is no Property Conditions Report attached to an agreement or a mandate of sale, the agent may be held liable by the affected consumer."
Leigh also notes that the new act applies a broad definition of 'Property Practitioner', which means a number of people traditionally involved in the sale of a property will now need a Fidelity Fund Certificate (FFC), not just the estate agent, and will include a bond broker, home inspector, a seller of timeshare or fractional title, a property manager and a property developer. An FFC is needed for the practitioner to earn commission on the sale.
The set up of an Ombudsman is also something to take note of, according to Leigh.
"Until now we have had the EAAB acting as the regulator and receiver of complaints, which makes little sense when you consider that the same body issuing licenses to practice is also then receiving complaints about the industry," explains The Agency's MD.
"So the setting up of an independent Ombudsman means they will now receive the complaints, while operating separately from the new Authority, which will hopefully lead to a number of improvements in the industry." The findings of the ombudsman will be equivalent to a magistrate's court order.
It is worth noting, that despite the bill being signed by the president, there is still plenty to be done before it can take effect. With plenty still to be done, Leigh does not think we will see it in practice until the end of 2020.
But once it does, Leigh is confident it will positively transform the industry.
"The Property Practitioners Bill will hopefully bring about better structures, more transparency in terms of the industry as a whole, and hopefully this will mean more protection for the consumer at the end of the day."
Author: The Agency Property Group
