In the same way that the Rental Housing
Amendment Act was signed by the President in 2014 but is not yet operational,
the Property Practitioners Act is required to have regulations published and
for an effective date to be published in the Government Gazette. There is no
prediction at present of when this Act will become effective.
One important aspect to note is that at the
time of writing we have not yet had sight of the version of the Act that has
been signed by the President. Any changes that we are predicting come from the
latest available version of the Property Practitioners Bill which was subject
to change prior to the Bill being signed.
On the assumption that the previous bill
was unchanged when it was signed, here are some of the proposed changes from
the current Estate Agents Affairs Act:
1. The
Estate Agents Affairs Board will be replaced
The Estate Agents Affairs Board will cease
to be and it will instead be replaced by the Property Practitioners Regulatory
Authority. The Authority will be very similar to the EAAB in that they will be
responsible for ensuring compliance across the industry and will have the right
to perform checks and audits on Property Practitioners.
2. Establishment
of the Property Practitioners Ombud
The Property Practitioners Ombud will be
established to enable any person to lodge a complaint with the Ombud against a
property practitioner in respect of complaints relating to financing,
marketing, management, letting, hiring, sale or purchase of property.
The Ombud will have the ability to hear and
adjudicate disputes between individuals and Property Practitioners, evaluate
the evidence provided and make an appropriate finding.
3. Ability
to send compliance notices
The Authority or inspectors authorised by
the Authority will be empowered to issue Property Practitioners compliance
notices for minor infractions committed by Practitioners. A compliance notice
could include the imposition of a fine and refusal to comply with a compliance
notice will constitute a criminal offence
4. Fidelity
Fund Certificates
In addition to the current regulations and
requirements for Fidelity Fund Certificates, an additional requirement has been
introduced that requires Property Practitioners to be in possession of a valid
tax clearance certificate and a BEE certificate. The requirement still remains
that no Property Practitioner may be entitled to legally claim commission
unless they possess a valid Fidelity Fund Certificate.
5. Mandatory
Disclosure of Defects
Under the new Act it will become a
requirement for a Property Practitioner to obtain a comprehensive list of
property defects from a seller as part of a sale of property. A Property
Practitioner may not accept a mandate without being in possession of this
document.
6. Record
keeping
Slightly contrary to the provisions of
FICA, Property Practitioners will be required to keep records for a period of
10 years, however these documents may be kept electronically provided that
processes are in place to ensure that these documents are suitably backed up.
7. Liability
for the conduct of Franchisees
The franchisor may now be held responsible
for prohibited or sanctionable conduct of the franchisee. This could
drastically effect the current franchise model and may lead to stricter
regulations on franchisees by franchisors
It is still early in the process of this
Act becoming effective law and, as always we will be at the forefront of
providing training and advice on what changes your agency needs to make to
ensure that you are fully compliant.
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