How does the Consumer Protection Act affect estate agents?

Private Property South Africa
Private Property Reporter

As an estate agent, how does the Consumer Protection Act affect me?

The CPA is not a new piece of legislation anymore but it is intended to govern the rights of consumers where a party is dealing with a individual person or a juristic person that has got assets or turnover under R2 million. As an agent, of course, you are providing services in the form of estate agent advice, drawing up contracts, advising around the properties, market conditions, neighbourhoods, etcetera.

Very often you'll find that, as an estate agent, you're in the firing line in the event that there could be a claim by the seller or generally a purchaser who may be disgruntled. Very often you may think that being the party that's just in the middle of this transaction, you are not liable. Of course, you can indemnify yourself and put certain provisions and conditions in your mandate or alternatively in the purchase sale contract with offer to purchase as it's often called, to try and mitigate any claims that you may be susceptible to or exposed to. Also very often there is a direct relationship between a seller and a purchaser, and you as the estate owned aren't directly involved in the contract as a third-party who stands to benefit from commissions, etcetera. Be aware of a principal in the Consumer Protection Act that's called the supply chain management liability and in effect what this gives the consumer is the right to sue anybody in the chain that has provided the goods or the services. Perhaps the purchaser will sue the seller and you as the agent, in the event that something goes awry or they're not happy or there's some form of a claim. Be sure to try and indemnify yourself from those type of provisions.

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