Property Law Changes

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Law, just like life and the society we live in, is not a static thing. As the world around us changes and society changes, the law has to be reviewed, at the very least, to ensure it is still meeting the needs of the people it is supposed to serve and protect, whether that law is in the realm of criminal justice or property. That is also exactly what happened with the new Property Practitioners Act (PPA) that officially commenced on 1 February. The PPA is consumer-focused legislation that clarifies a lot of uncertainties. There are also various processes that Karis, and many other agencies, have been following as best practice for some time, but the PPA now makes it law. So, what changed?


Property defects disclosure

The PPA makes it obligatory for Property Practitioners to request a completed and signed form disclosing all the defects on the property that the seller or lessor is aware of. It is a great requirement that protects the consumer and encourages transparent and ethically sound property transactions. If the document is not produced, it is assumed that there are no defects. The Property Practitioner that accepts a mandate without this document being attached to the sale or lease agreement can be held liable by the buyer or lessee.


Increased certification requirements

In addition to Property Practitioners requiring a Fidelity Fund Certificate (FFC), any business that earns a commission or brokerage from a property sale or lease must also have a Tax Clearance Certificate and a BEE Certificate. Luckily FFCs will now be valid for three years and fees have been standardized across all professional levels. Conveyancers are also legally obligated to verify the validity of the agent and his/her FFC before making payment.


Trust accounts

It is no longer required that all Property Practitioners have trust accounts. With the PPA only practitioners that actually handle trust monies require such an account lifting the financial burden on those practitioners that don’t. Practitioners can use dedicated third-party payment processing agents or intermediaries that have compliant trust accounts and completely avoid the need for their own.


Smoother and more affordable training

Prospective agents no longer need to complete a year-long internship or complete expensive NQF4 exams. If you sit your Professional Designation Examination, you can start selling properties within six months under supervision if you complete another six practical course modules. Business can also run their own CPD training at a reduced fee if it has been approved by the Property Practitioners Regulatory Authority (PPRA), and the Authority’s training should also be easier to complete with all course modules available at all times at a reduced fee.


Transformation and equal opportunity.

The PPRA is required to open a Property Sector Transformation Fund within 6 months of its establishment. The fund is meant to promote previously disadvantaged groups in the property sector and should be a force for positive change in the industry. Equal opportunity is also highlighted in the Act as it does away with the practice of charging Accreditation Fees in return for exclusive rights to property transactions in a development. Estates can no longer limit sellers and landlords to use only their approved agents affording all agents the opportunity to win mandates.

It is now time to see to it that the PPA is implemented successfully. The industry will need to allow some time for things to normalize as practitioners and the PPRA interprets the new Act and as the PPRA applies the new regulations.