FINANCE
A fidelity fund certificate isn ’ t enough Many property practitioners believe an FFC covers them against internal fraud or negligence , but it ’ s subject to several conditions and procedures that aren ’ t widely known or factored in by most agencies .
Did you know :
• The maximum amount that can be paid to a claimant by the Property Practitioners Regulatory Authority ( PPRA )’ s fidelity fund is just R2 000 000 per cause of action ?
• The PPRA may only consider certain claims , and must hold an inquiry each time a claim is lodged ?
With so many hurdles to clear , relying on an FFC to indemnify your business significantly decreases your chances of recovering from a claim . The remedy might also come too late to undo financial harm to the business .
And here ’ s something else to consider : The PPRA may , in the public interest , arrange any group insurance scheme with any insurer to cover property practitioners ’ liability to members of the public on the grounds of malpractice .
Before it does so , it must ensure :
• the claimant has already laid a criminal charge with the SA Police Services ;
• the claim complies with all legal requirements and due process was followed ; and
• the claimant substantiated their claim with proof , including records of civil action already taken against the property practitioner .
75 JUNE / JULY 2023 SA Real Estate Investor Magazine