Legal Articles

The Property Practitioners Act 22 of 2019 (PPA) came into effect on 1 February 2022, bringing some significant changes in the regulation of the property sector.

In this article, our attorneys share some of these exciting developments. 

What are these developments, you ask?

First and foremost, the PPA repeals the Estate Agency Affairs Act of 1976.

Secondly, the PPA really does sound a bit more ‘consumer friendly,’ and here is why we think so. Consumers will be glad to note that the PPA requires that sellers and lessors provide a complete and comprehensive disclosure form, as per section 67 of the Act.

Mandatory disclosure form

67. (1) A property practitioner must—

(a) not accept a mandate unless the seller or lessor of the property has provided him or her with a fully completed and signed mandatory disclosure in the prescribed form; and

(b) provide a copy of the completed mandatory disclosure form to a prospective purchaser or lessee who intends to make an offer for the purchase or lease of a property.

The form discloses all defects on the property that are known to the seller or lessor, and the Property Practitioner ought not to accept a mandate where the disclosure form is not provided. In the event that the disclosure form is not provided, then it will be assumed that the defects that may be on the property were never disclosed to the consumer and this opens the likelihood of the affected party lodging a claim against the Property Practitioner for any loss.

Property Practitioners Prohibited from Entering Agreements with other Service Providers

Thirdly, section 58 prohibits Property Practitioners from entering into agreements with other property market service providers, wherein a consumer will be obliged and urged to use a particular service provider in transactions in which that particular Property Practitioner was the effective cause. Unarguably this provision seeks to minimise the potential, among other things, of some Property Practitioners and service providers in the property market colluding to the exclusion of others.

Property Sector Transformation Fund

As it were, fourth, the Act seeks to enable transformation in the property sector. This is evident from the wording of the aims and preamble in the Act itself. The aim, ultimately, is to achieve an inclusive and integrated property sector, with the Property Sector Transformation Fund being a vehicle that will carry this aspiration as provided in section 21.

Further and in the interest of protecting consumers, section 56 of the PPA provides that,

56. (1) A property practitioner is under no circumstances entitled to any remuneration or other payment in respect of or arising from the performance of any act referred to in subparagraph (i), (ii), (iii) or (iv) of paragraph (a) of the definition of ‘‘property practitioner’’ in section 1, unless at the time of the performance of that act—

(a) the property practitioner; and

(b) if the property practitioner is a company, every director of such company or, if such property practitioner is a close corporation, every member referred to in paragraph (b) of the definition of ‘‘property practitioner’’ in section 1, of that corporation,

is in possession of a Fidelity Fund certificate (bold, our emphasis).

Finally, role players in the property sector have been consolidated under the term “Property Practitioner” while keeping their distinct roles, including property developers and property managers, apart from estate agents.

Van Deventer & Van Deventer Inc. - Conveyancing Attorneys Johannesburg & Cape Town

At Van Deventer & Van Deventer Incorporated, our conveyancing attorneys assist with property transfers, property law disputes amongst a wide array. Our sister company Phoenix Bonds assists with bond origination and bridge financing.

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