The Property Practitioners Act 22 of 2019 (PPA) was signed into law in South Africa by President Ramaphosa on 16 December 2021 and come into operation on 1 February 2022.
Some of the far-reaching changes include:
- The introduction of the concept of a “Property Practitioner”, the definition of which is quite broad and not only includes estate agents – this now also includes other role players such as auctioneers, rental agents, bond / mortgage originators, bridging financiers, property developers and property managers, etc.
- Excluded from the definition of Property Practitioner, is any person who does not carry out any of these functions “in the ordinary course of business”, as well as a natural person who sells their own property, attorneys, candidate attorneys and the sheriff of the court, according to Find an Attorney.
- Property Practitioners, excluding natural persons, now need to be in possession of a BEE Certificate to renew or apply for a Fidelity Fund certificate. A valid Tax Clearance Certificate is also required.
- All property practitioners must also comply with the Property Sector Transformation Charter Code, which is still to be published, according to Cliffe Dekker Hofmeyer.
- The Act provides for the establishment of a Property Practitioner Regulatory Authority In order to address the inequalities and promote the meaningful participation of historically disadvantaged individuals in the property market. Property Practitioner Regulatory Authority is required to open a Property Sector Transformation Fund within 6 months of its establishment.
- The limitation on the relationship between property practitioners and other real estate service providers – i.e. to avoid “kickbacks” from bond originators, attorneys, etc.
- Property practitioners must obtain a mandatory disclosure form from a seller or lessor before concluding a mandate, which must be provided to the purchaser or lessee before making an offer. The disclosure form is a standard template document that is prescribed by the Act, which must be signed by all parties and attached to the sale or lease agreement. A property practitioner who fails to comply can be held liable by an affected consumer.
According to Cliffe Dekker Hofmeyer, the President has signed the PPA into law, but the date of commencement is still to be determined. The PPA will repeal the Estate Agency Affairs Act 112 of 1976 (EAA) in its entirety.
The Property Practitioners Act: Commencement document in the Government Gazette can be found here: https://www.gov.za/sites/default/files/gcis_document/202201/45735pr47.pdf
The Mandatory Disclosure form template can be downloaded here.
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