Real Estate Investor Magazine South Africa Dec/January 2020 | Page 46

LEGAL
Deciphering the
Property Practitioners Act
What the new law means for the real estate sector
SIDIMA MFEKU
Step-by-step guide for investing
The primary purpose of the Property Practitioners Act
is to transform the property market and transformation
includes these changes:
Board of Authority: Estate Agencies Affairs Board
will be replaced by a new governing body known
as the Board of Authority which will govern the
profession of property practitioners.
Compliance notices: The Property Practitioners
Act introduces compliance notices for minor or
substantial contraventions that can be issued by an
inspector appointed by the Board of Authority.
Property defects disclosure: Under this act it is
mandatory for sellers to provide a comprehensive
‘property defects disclosure document’ as part of a
property transfer.
Record storage: All records will need to be kept for
10 years electronically.
Remuneration date: The Property Practitioners
Act states that agents may only receive commission
from a property sale upon registration.
Franchisor liability: Under the new Property
Practitioners Act, estate agency franchisors will be
held liable for the misconduct of their franchisees.
This can have far-reaching consequences, and
understandably, the franchise model may be
revisited as a result.
Fidelity Fund Certificates: An additional
requirement for property practitioners is to be in
possession of a valid tax clearance certificate and a
BEE certificate in order to be included in the Property
Practitioners Act. In order for a property practitioner
to enforce the collection of remuneration
(commission), a valid Fidelity Fund Certificate must
be held for all property practitioners within the
agency or business. Failure to comply with this will
result in being asked to refund any commission
paid by a seller. Should the Board of Authority see
fit, a Fidelity Fund Certificate may be withdrawn.
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DECEMBER/JANUARY 2020 SA Real Estate Investor Magazine