Real Estate Investor Magazine South Africa Dec/January 2020 | Page 47

I
n a democratic country like South Africa, where freedom is
widespread and everyone considers themselves a freedom
expert, it is necessary that the constitution and laws
are regularly revisited and reintegrated to fit an evolving
country. The revision of these laws and bills governing
the country is especially important because of the ever-
evolving world we live in, and the constant inception of
new technology and innovative thinking. As one of the
fastest-growing sectors in South Africa, the real estate and
property sector has seen some new amendments designed
to improve and reform the industry.
“The Act is considered more inclusive
and is referred to as a diversified version
of the act which it replaced, the Estate
Agency Affairs Act”
Every subsector and/or division within the real estate and
property sector is regulated in their sole respect. From real
estate market, ownership, systems of registration, to the lease
of residential/business premises, permits and obligations
as well as real estate rights. This is the same for the property
practitioners who have seen a shift in their regulating Act. A
new Property Practitioner’s Act 22 of 2019, repealing the Estate
Agency Affairs Act, has been signed into law by the South
African president, Cyril Ramaphosa.
The Act is considered more inclusive and is referred to as a
diversified version of the previous act. It has been broadened
to cover the commercial property brokers, bond originators,
home inspectors, home owners associations, companies
selling timeshare and fractional title, property developers and
managers, along with estate agents.
Managing Director at Trafalgar Property Management,
Andrew Schaefer explains: “in the new legislation, a
management agent is referred to as anyone who collects or
receives any money payable in respect of a leased property
or business undertaking or who provides, procures, facilitates,
secures or otherwise obtains or markets financing in
connection with the management of leased properties.”
Everyone who sets up business to let and manage rental
properties will now fall under the provisions of this new Act
with regards to trust accounts and the management of client’s
deposits and monthly rentals – this means better protection
for both landlords and tenants. All managing agents will also
need to hold a valid Fidelity Fund Certificate (FFC) in order to
claim a commission on any new or renewed leases.”
Like with any laws amended in every sector, industry and/
or nation a variation of thoughts is inevitable. A number of
bodies under the property practitioners banner have raised
concerns over some of the concepts and changes brought by
the property practitioners act. In a radio interview with SAFM,
Chief Executive Officer of Real Estate Business Owners of South
Africa, Jan le Roux said after almost five decades of the same
act, they are looking forward to seeing change.
Difference between the old and the new
“I hate to admit that not much has been differentiated between
the estate agents act and the incoming property practitioners
act. We were hoping for something spanking brand-new with
brand new concepts. But the name is different, we used to be
called estate agents, bond consultants, valuers and others but
now we are all referred to as property practitioners. So now
it is no longer the estate agents affairs board but property
practitioners board,” said Jan le Roux.
Property practitioners’ Ombud / property
practitioners’ authority
Leading up to the signing of the final Property Practitioners
Bill, many were talking about the establishment of a property
practitioners Ombud - which was expected to lighten the
burden on the courts and improve administration when it
comes to disputes. According to le Roux: “that was in one of
the many drafts that had been compiled for the past 12 years,
but in the final draft there is no Ombud’s office. Property
practitioners will be regulated by the property practitioner’s
authority which will operate just the same as the estate agents
affairs board.
“If an estate agent misbehaves, the property practitioner’s
authority would have to take the necessary steps to get the
misbehaver to serve for their misconduct – and, with the
inception of the mediation and adjudication system, an
adjudicator would be appointed to preside over the case
should that be necessary.”
“Everyone who sets up business to let
and manage rental properties will now
fall under the provisions of this new Act,
which means better protection for both
landlords and tenants.”
Property inspectors / inspectors’ regulation
The use of property inspectors as a regulatory arm in the
estate and property sector is not an entirely new act. “They
have always been there, but they did not have the powers
as the new act gives them. Now they can enter offices, seize
office documents, hard-drives and computers,” le Roux said.
However, businesses within the estate sector have alarming
concerns about the regulation of inspectors. Le Roux said it
is within property inspectors’ jurisdiction to take all working
equipment from businesses should they suspect anything.
He further states that if someone takes away all your working
equipment and you are found to be innocent you will have
been deprived the time to continue to work. “We have put a
word of concern forward to the minister for the evaluation of
this point.”
Otherwise a save for the industry
In the estate and property sector estate agents are required to
have trust accounts in order to operate as agents, and most of
them have these accounts for procedural purposes but do not
use them. It is speculated that an approximate five thousand
of the six thousand estate agents are not using these accounts.
Furthermore, a chartered accountant has to be appointed
yearly by these agents for audits. This process is compulsory.
An estimated amount of R40 million is paid by the industry in
audit fees, but le Roux has confirmed that the new bill provides
that the minister has the authority to exempt estate agencies
from having trust accounts.
SOURCES SAfm, Trafalgar
SA Real Estate Investor Magazine DECEMBER/JANUARY 2020
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