The amended Property Practitioners Act intends to regulate the business and functions of estate agents, estate agencies, property brokers, bond brokers, marketers and providers of bridging finance.
These individuals are now referred to as property practitioners, a blanket term for all individuals involved in the business of property in South Africa.
The following are the most important changes that have been made to the property practitioners act with regards to fidelity funds:
The primary purpose of the Property Practitioners Act is to transform the property market while encouraging the inclusion of previously disadvantages individuals through grants and other supportive strategies.
The following are additional key changes that will come into effect with the Bill:
The new Act will make provision of a Property Practitioners Ombud Office to be established. This will be a Section 21 institution, similar to that of the Public Protector.
The Property Practitioners Ombud’s Office will consider and dispose of complaints lodged in terms of the Act with regard to the financing, marketing, managing, letting, hiring, sale and purchase of the property. Furthermore, it aims to provide mechanisms for the resolution of those complaints.
A purchaser/tenant/lessor/seller can request the agreement to be in any one of South Africa’s official languages, and this must be supplied by the seller. Samples of contracts in all languages will be available on the Authority’s website. An agreement is defined as a mandate, lease or sale agreement.
Inspectors appointed by the Authority will have the power to enter and inspect any business premises of a property practitioner without a warrant.
There has been no change to the status and duties relating to non-executive directors. They may not be involved in the operations of the agency other than in departments that do not deal with property or with the public. They must hold an FFC and are exempt from education compliance.
Property practitioners are required to keep all correspondence, legal agreements, copies of advertising and marketing materials for 5 years. These can be stored electronically.
Human Settlements Minister wants to see the involvement of more black people in the property industry. One way in which this is to be achieved is for all State institutions to be permitted to utilise the goods and services of only those property practitioners who comply with the Broad-Based Black Economic Empowerment and Employment Equity legislation and policies.
New disqualifications have been added to the existing list. For example, to apply for an FFC you must have a Tax Clearance Certificate and a BEE Certificate. You will also be disqualified if you are on the Treasury tender defaulters list.
Trust account exemptions will be considered to assist transformation into the industry. These will be determined on their merit and will be for a set period only. Where annual income for any estate agency practice is R2.5m or below, the Trust Account no longer requires an audit from a registered auditor, the firm must ensure that their annual financial statements are signed off by a registered accountant.
If you are a property practitioner or would like to become one and require more information regarding the amended Property Practitioners Act, please feel free to contact us.
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