When did the Property Practitioners Act come into operation?

As of 01 February 2022, this new Act came into operation.

What is the benefit of this Act coming into operation?

The real estate industry in South Africa is taking a step into the future with a piece of legislation in its industry that is reflective of the country’s demographics. Doing this is paving a path for those wanting to become property practitioners and, at the same time, providing protection for those who are buying or leasing property.

What is mandatory for a property practitioner to do before accepting a mandate from a seller or landlord?

A disclosure form setting out a comprehensive list of all the property’s defects. This document is called a mandatory disclosure form which the seller/landlord must sign, the purchaser/tenant and the property practitioner facilitating the sale/lease. The Act now makes it illegal for a property practitioner not to have this in place before accepting a mandate.

What must be included in the Mandatory Disclosure form?

The Act requires that all latent and patent defects must be disclosed in this form.

A latent defect is something that an ordinary person, when walking around the property, cannot see at first glance, i.e., a leaking roof, faulty geyser, damp in walls, etc.

A patent defect is something that an ordinary person can notice when walking around the property, i.e., a crack in the wall, a broken tile in a bathroom etc.
The property practitioner must ensure that this mandatory disclosure form is present. Still, they rely on the property owner to ensure that this form gets filled out correctly and comprehensively to the best of their knowledge.

Why would you say it is essential to complete this mandatory form properly?

The Property Practitioners Act encompasses consumer protection, ensuring that a buyer or lessee is aware of every issue or problem related to the property. If a seller does not disclose (or tries to conceal) a defect that they knew about, they run the risk of later being sued by the buyer or lessee.

What is a positive step forward to becoming a property practitioner?

The good news is those wanting to become a property practitioner are relieved to find out that the process is now much quicker. Once you have written the exam to get your Candidate Property Practitioner Certificate, you can then write the next exam within six months. In addition, once you have passed the Professional Designation Examination (PDE), you can start selling property under supervision if you have also completed certain practical modules. The old process required would-be agents to complete a year-long internship and pricy NQF4 exams.

What is another positive step forward to becoming a property practitioner?

Another positive change for real estate professionals is that Fidelity Fund Certificates (FFCs) will now be valid for three years instead of one. Also, a property practitioner’s FFC is no longer tied to a specific position. This allows a property practitioner to move to a different real estate agency or be promoted without having his or her existing FFC invalidated.
However, the Act imposes an obligation on conveyancing attorneys to request a copy of the Fidelity Fund Certificate for their files from the relevant Property Practitioner before making any payment of their said commission or otherwise to the said Property Practitioner.

Which key role players are affected by the creating of this Act?

The legislation in this Act affects anyone and everyone involved in real estate transactions (not just limited to real estate agents). Examples of other key players in the industry, but not limited to, are bond originators, bridging financiers, property developers, property managers, attorneys, and various other property professionals, to name a few.

Here are a few other interesting facts about the Property Practitioners Act.

The Act has now done away with the Estate Agency Affairs Board and has now created the Property Practitioners Regulatory Authority.

Transformation is one of the most significant aspects of the Property Practitioner’s Act, which has also set up a special fund to support previously disadvantaged real estate agents (now called property practitioners). This fund must be in place within six months of the Act coming into operation.

Another way of ensuring consumer protection is the introduction of Section 58, which places a limitation on the relationships that Property Practitioners have with other property market service providers. Section 58 provides that a Property Practitioner may not enter an arrangement whereby a consumer is obligated or encouraged to use a particular service provider, including an attorney, to render any service of which that Property Practitioner was the effective cause. A person who renders services in contravention of Section 58 is not entitled to any remuneration, payment, or consideration in respect of such services rendered.

Choosing The Right Conveyancing Attorney Can Aid in a Smooth Transfer Process

1. Choose the right conveyancer

The seller / owner of the property is at full liberty to choose a Conveyancer or Conveyancing Firm to attend to the transfer of their property.
If neither party has any preference with regards to a Conveyancer / Conveyancing Firm to use, and there is an estate agent involved, the estate agent has created relationships with certain Conveyancers / Conveyancing Firms and can suggest who to go with. Still, at the end of the day, the seller has the final say as to which Conveyancer / Conveyancing Firm they wish to use.

 

2. Avoid any possible uncertainty

Clearly record your choice of attorney in your written sale agreement before all parties sign. Otherwise, you could be opening the door to dispute.

 

3. Bring your attorney into the picture from Day One

Sellers, in particular, should remember this basic principle – agree to nothing (verbally or in writing) until your lawyer has checked it out for you! A lot can go wrong with property sales, especially through the wording and signing of the sale agreement itself.