The Property Practitioners Act of 2019 (the “new Act”), which was, officially signed into law on 2 October 2019, replaces the 43-year-old Estate Agency Affairs Act of1976 (the “Estate Agency Act”).

The new Act is a substantial piece of legislation aimed at improving the functioning of the property market and addressing issues relating to transformation to include all sectors of the population in the property market.

The note below summarizes some relevant provisions of the new Act and what implication the Act will have on Property Practitioners and other parties operating in the property market.

Definition of Property Practitioner:

Unlike the Estate Agency Act which was limited to regulating estate agents, which the Estate Agency Act defined as those involved in the advertising, letting and the sale of property for some form of gain, the new Act defines a “Property Practitioner” as anyone remotely associated with a property transaction.

A Property practitioner now includes role players such as Bond Brokers, Home Inspectors, Facilitators of agreements of sale or lease, Sellers of timeshare or fractional title, Property managers and Property developers.

Property Practitioners Regulatory Authority:

The Property Practitioners Regulatory Authority (the “PPRA”) will be replacing the Estate Agents Affairs board (“the EAAB”). The PPRA will be the new regulatory body of all Property Practitioners in South Africa and will be governed by and will act through the Board which will be known as the Board of the PPRA.

The PPRA will be funded by Government monies as well as by fees paid by Property Practitioners to the PPRA.

Transformation of the property sector:

The new Act will seek to address transformation in the property market by promoting the interest of previously disadvantaged individuals; small micro and medium enterprises; to create a Sector Transformation Fund and promote affordable home ownership.

Estate Agents Fidelity Fund (“the EAFF”):

The EAFF established under the Estate Agency Act will continue to operate, however, it will now be known as the Property Practitioners Fidelity Fund (“the PPFF”).

Similar, to the Estate Agency Act, Estate Agents are also prohibited from practising without a Fidelity Fund certificate, however, as a result of the wide definition of a Property Practitioner the Fidelity Fund rules have now become more stringent.

Establish of the ombudsman:

The new Act makes provision for the establishment of the office of the Ombudsman who will deal with dispute resolution pertaining to matters involving fixed property.

Consumer protection:

In terms of section 67 a Property Practitioner may not accept a mandate unless a lessor or seller of a property has provided him/her as well as the prospective purchaser/lessor with a fully signed mandatory disclosure form. The mandatory disclosure form must be signed by all parties to a property transaction which will form an integral part of any lease/sale transaction.

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Article written by: Anouk Heyns (Professional Assistant at MP|W)