The Property Practitioner’s Act - Important Information | Legal Articles

 

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The Property Practitioner’s Act - Important Information

The Property Practitioner’s Act is a brand-new piece of legislation that serves to replace the previous Estate Agency Affairs Act.

Although the Act has been signed into law, it has not yet been put into effect and will commence on a future date which is yet to be decided on.

property practitioner's act

The Property Practitioner’s Act Summary

This new Act sets out to regulate all affairs related to property practitioners in South Africa, as well as to provide for transformation in the property sector and to further support consumer protection.

Before the Act can come into full effect, the Minister must still publish a code of conduct for property practitioners and specify what the training requirements will be to qualify as a property professional.

Property Practitioners

The term “property practitioners” does not refer exclusively to real estate agents, but also all individuals involved with the sale and purchase of immovable property in South Africa.

According to the Act, this includes any natural or legal person who acts on behalf of another person in his or her ordinary course of business:

  • Auctions; rents; sells or exhibits for sale or purchase, property or a business
  • Manages property
  • Negotiates such an agreement
  • Canvasses for landlords, tenants, buyers or sellers of residential, commercial or industrial property
  • Acts as an intermediary or facilitator in any of the above
  • Homeowners association which does any of the above for gain
  • Anyone employed by a property practitioner to do any of these things on his or her behalf
  • Anyone who sells or markets timeshare
  • Any person who manages or supervises the day-to-day business functions of a property practitioner
  • Any person who:
    • Arranges financing for a sale or lease
    • Arranges bridging finance
    • Acts as a bond broker
    • Except if either of these falls within the definition of “financial institution”
  • Directors of companies, members of CC’s, trustees of trusts; if the entity does any of the above
  • Any attorney or person employed by an attorney to render these services

The Need for Transformation in the Real Estate Sector

Many are wondering if a transformation in the real estate sector is necessary. The following are points which highlight the need for transformation as implemented by the new Property Practitioner’s Act:

  • At the end of the financial year in 2018, only 12% of all estate agencies, principal estate agents and full status real estate agents who were issues with Fidelity Fund Certificates were people of colour
  • However, of all the current intern estate agents, almost 30% are people of colour, which indicates that transformation is underway
  • Once the new Act commences, the Property Sector Transformation Charter will also apply to all property practitioners in South Africa
  • In order to qualify for a Fidelity Fund Certificate (a mandatory requirement for all property practitioners), every property firm must be in possession of a BEE certificate

Van Deventer & Van Deventer Incorporated – Property Law in South Africa

With the new changes made to the legislation, it’s only a matter of time before the Property Practitioner’s Act comes into force.

This will mean that the previous Estate Agency Affairs Act will no longer regulate the operations of property practitioners in South Africa.

For more information about the new legislation, or to find out more about property law in South Africa, please contact our attorneys in Johannesburg or Cape Town.

Comments are closed for this post, but if you have spotted an error or have additional info that you think should be in this post, feel free to contact us.


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