New Property Practitioner's Act signed into law
Category News
The long awaited Property Practitioner's Act was recently signed into law by President Ramaphosa, although it still awaits promulgation before taking effect.
The Act replaces the outdated 43-year old Estate Agency Affairs Act and aims to provide important reform of the industry and improve the functioning of the sector which also impacts sellers and landlords.
Defining who is a property practitioner
The Act regulates the estate agency industry but broadens the scope of legislation beyond just traditional estate agents to cover commercial property brokers, bond originators, home inspectors, homeowners' associations, companies selling timeshare and fractional title, property developers and property managers, who now all fall under the Act.
Regulations pertaining to estate agents/property practitioners
The need for a valid Fidelity Fund Certificate is broadened to all property practitioners referred to above and essentially anyone who earns a commission or brokerage from the sale or leasing of a property. The certificate must also be produced on request from a seller or landlord. The Act tightens the regulations around Fidelity Fund Certificates beyond the current requirements including that it is now required that not just the agent/s, but the agency/business and all of its property practitioners must also be fully compliant.
Regulations pertaining to property defects
This is an important element that sellers and landlords need to be aware of. While it has for some time been best practice to include a comprehensive property defects disclosure document as part of a property transfer, it is now mandatory for all property sale and lease agreements. 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.
Estate Agency Affairs Board is replaced by a Board of Authority
The current Estate Agencies Affairs Board will be replaced by a new governing body known as the Board of Authority. This new board will govern the property profession across the board, not just estate agents as is currently the case.
The initial provision for an Ombud is excluded from the final Act and the Board of Authority will remain the recourse for consumers in their dealings with property practitioners.
The Act is one of a number of new laws which has contributed to the world of property becoming ever more complex. It also highlights the vital role of an experienced and credible agent who can provide the right advice for your property.
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Author: Gina Meintjes
