9 things to know about the Property Practitioner’s Act

Private Property South Africa
Cath Jenkin

Transformation is not an overnight venture, and the Property Practitioner’s Act has been a long time coming. Here are nine things you need to know about this important piece of legislation, as a property practitioner.

A new legal framework

As part of implementing a new piece of legislation that governs the property sector in South Africa, the Property Practitioner’s Act 22 of 2019 effectively repealed the outdated Estate Agency Affairs Act, with a view towards bringing the property sector into the present, and enabling South African estate agents to operate effectively in the future. As a new legal framework that governs the operations surrounding the property sector in South Africa, it’s imperative that you get familiar with this nifty piece of legislation, to ensure your practice remains compliant, and operating in accordance with the law.

Regulation of property practitioners

You’ll notice a significant change in the way the law views the property sector in South Africa now: instead of being known as an estate agent, you’re now known as a property practitioner. This is a far broader term, and one that encompasses a wider spectrum of knowledge and practice. For example, intern estate agents are no longer - you’re now a Candidate Property Practitioner. Similarly, once you have completed your training, you are no longer a Full Status Estate Agent; you’re now a Property Practitioner. And, in the same way, a Principal Estate Agent is now a Principal Property Practitioner.

Changes in naming conventions

Changes in naming conventions like this may, at first, appear to have little effect on your day-to-day operations, but they do, in fact. A quick look at the revised definitions for the above-mentioned terms reveals that this legislation does not only affect the team of people who buy, sell, manage, or let homes, but now also includes bond originators, home inspectors, timeshare sellers, property managers, developers, and more. In short, anyone having anything to do with the buying, selling, letting, management, or development of properties, should know their stuff when it comes to this piece of legislation.

Establishing new structures

The Property Practitioner’s Act does indeed seek to establish new regulatory bodies that will oversee the implementation of this legislation, and supervise the operations of the South African property sector as a whole. As we’ve outlined before, these institutional bodies will be focused on enabling transformation and reducing the burden placed on the country’s legal and judicial systems. This move seeks to also provide consumers with better protection, as the legislative framework around property sales, development, letting, and management is now directly expanded.

Your commission structure

Regulating the property sector in South Africa is no mean feat, and managing a commission-based structure can be quite onerous. That said, in order to be able to claim your commission on a lease or a sale, you - as a property practitioner - will need to verify that you hold a valid Fidelity Fund Certificate (FCC), a tax clearance certificate, and any required BEE certification. But, it’s not just you that needs to - every other property practitioner within your agency must also be able to provide similarly, or else you may have to refund the commission. The Property Practitioner’s Act also makes mention of a Remuneration Date, which now clarifies that property practitioners may only receive their commission on a sale, once the property has been correctly registered. Notably, this level of mandatory certification effectively bars discriminatory practices within the South African property sector. An FCC cannot be issued to anyone who:

  • Is not a South African citizen, or is in South Africa illegally.
  • Has contravened any part of the Property Practitioner’s Act within the past five years. Anything that happened more than five years’ ago, is not of concern for this legislation.
  • Has been found guilty in any civil or criminal proceedings.
  • Has been dismissed from an important work position, owing to improper - Has been found guilty of any type of discrimination related to race or gender.
  • Does not possess the correct, valid BEE certification.

A transformed property sector

The Property Practitioner’s Act makes keen mention of transformation as one of its primary objectives. That’s why the legislation puts significant focus on the support and implementation of BBBEE standards throughout the industry, and seeks to establish a special fund that will support transformation. A Transformation fund will be set up, to provide financial support and incentivise to property practitioners who focus on ensuring transformation throughout their practice. Moreover, a new research centre focused on transformation within the South African property sector will be set up.

Your administrative processes

Keeping the right kind of accurate records on hand is important for your business as a property practitioner. But, the storage and length of time you need to ensure your records are available for perusal is now managed by this new legislation. Property practitioners must now ensure all records are accurately maintained and securely stored for up to 10 years, and the Property Practitioner’s Act directly enables the digital or electronic storage of your records.

Your property franchise

Previously, when a property practitioner was part of a franchise, the responsibility for wrongdoing fell mostly on the franchisee, and a franchisor could - for the most part - avoid the fallout related to any significant consequences. The Property Practitioner’s Act, however, does now make franchisors responsible for any misconduct that’s undertaken by their franchisees.

Your contracts

Transformation is not just about change, it’s about inclusivity too. Enabling and empowering everyone to better understand the contracts, lease agreements, sale agreements, or offers to purchase, that they need to, is now made easier, thanks to the Property Practitioner’s Act. Anyone who buys, lets, sells, or rents, a particular property is now legally allowed to request their contracts be made available to them in any of our official languages. This move will help to ensure that everyone - from tenant to landlord, and buyer to seller, can fully understand the terms and conditions of their lease or sale agreement.

If you have any questions related to the Property Practitioner’s Act, and how it affects the way you run your business, we recommend visiting our Advice Centre for more guidance.

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