The Property Practitioners Act 22 of 2019 (the “Act”) came into operation on the 1st of February 2022. The Act replaces the Estate Agencies Affairs Act 112 of 1976 and has brought about some significant changes to the real estate industry. The Act provides greater protection for consumers in the property market and addresses the need for transformation within the property industry.
The Act has a much wider scope of application than the Estate Agencies Affairs Act. The definition of a “property practitioner” encompasses estate agents as well as other role players in the property market, including among others auctioneers, mortgage originators, bridging agents and rental agents.
In line with providing greater protection for consumers, property practitioners are compelled to obtain a mandatory disclosure form. The Act stipulates that a property practitioner may not accept a mandate unless the seller or lessor of the property has provided the property practitioner with a fully completed and signed mandatory disclosure in the prescribed form disclosing any defects on the property known to the seller or lessor. A property practitioner must provide a prospective purchaser or lessee who intends to make an offer for the purchase or lease of a property with a copy of the completed disclosure form. A copy of the completed mandatory disclosure form signed by all relevant parties must be attached to the agreement for the sale or lease of a property. If such a disclosure form is not completed, signed or attached, the Act stipulates that “the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser”. A property practitioner who accepts a mandate without the required completed and signed disclosure form or who omits to provide a copy of the said form to a prospective purchaser or lessee may be held liable by an affected consumer.
The Act also makes it mandatory for all property practitioners (including any person employed by a property practitioner as a property practitioner), to be in possession of a Fidelity Fund Certificate. If a practitioner is a company, a close corporation, a trust or a partnership every director, every member, every trustee and every partner of such entity must hold a Fidelity Fund Certificate. The Act precludes a conveyancer from paying any remuneration or other monies to a property practitioner unless that property practitioner has provided the conveyancer with a certified copy of their Fidelity Fund Certificate which the Act requires to be “valid during the period or on the date of the transaction to which such payment relates, and on the date of such payment”.
To address the need for transformation within the property industry the Act places an obligation on organs of state, when procuring property-related goods and services, to utilise the services of property practitioners who comply with broad-based black economic empowerment and employment equity legislation and policies. The Act also stipulates that, within six months of its establishment, a Property Sector Transformation Fund must be opened, and the funds utilised to further transformation in the property industry.
Property practitioners should take cognisance of the provisions of the Act to ensure compliance with the Act and to avoid falling foul of any of its provisions.
Source: TMJ
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