Real Estate Investor Magazine South Africa Real Estate Investor Magazine - July 2017 | Page 18

documents in the Auction Alliance case, the new Bill
seeks to imbue inspectors of the regulatory authority
with the power to enter any premises (other than the
private home) of a property practitioner and to seize
certain articles, without a warrant.
This is a potentially dangerous power to put into the
hands of persons who may not be conversant with
constitutional rights and, if this provision passes into
law, it is likely to generate much litigation against the
authority.
Prescription of Claims Against the Fidelity
Fund
The three year period for extinctive prescription of
claims that is provided for in the Prescription Act 68
of 1969 is specifically codified in the Bill. The period
starts running from the date of rejection of the initial
claim. Persons with rejected claims would therefore
need to start their legal process within three years in
order to avoid losing their right to claim.
Repayment of Remuneration Unlawfully
Earned by a Property Practitioner
The existing Act prohibits a person from offering estate
agency services whilst not in possession of a Fidelity
Fund Certificate (“FFC”), the so-called estate agent
“licence”. This Act goes on to state that a person who
is not in possession of a current FFC is not entitled to
commission.
The new Bill preserves the spirit of the existing Act
in this regard, but goes one step further in requiring
that any remuneration earned by a property practitioner
whilst not in possession of an FFC must be refunded to
the person who provided the remuneration, on demand.
Disqualification from Issue of a FFC
Section 49 deals with instances in which a property
practitioner is automatically disqualified from being
issued an FFC by the authority, and thereby prohibited
from trading lawfully. The expansion of the instances
listed in this section is sure to cause major consternation.
All of the instances mentioned in the current Act are
retained and there are some interesting amendments
and additions. On the positive side, a five year time
frame has been placed on prior contraventions of the Act
and dismissals from a position of trust for misconduct.
This means that such instances occurring more than
five years from application for a FFC will be of no force
or effect as regards disqualification. Persons in this boat
will no longer have a sword hanging over them forever
in terms of practising as an estate agent. Another
softening of the current disqualification criteria is
found in the amendment of the instance where a person
is found guilty of an offence involving an element of
dishonesty. The phrase “for which such person has been
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JULY 2017 SA Real Estate Investor
sentenced to imprisonment without the option of a
fine” has been added, thus eliminating minor offences
of dishonesty from automatic disqualification.
On the other hand, three new additions are likely
to make many property practitioners very unhappy.
The first is the requirement to be in possession of a tax
clearance certificate. It is highly unfair and probably
not legally sustainable to disqualify a person from being
issued with a FFC where they have a genuine dispute
with SARS and therefore cannot obtain a tax clearance.
Secondly, being on the Treasury tender defaulters list as
a provider (even as a director, member, trustee, partner
or shareholder) is now an instance for disqualification.
The practicality of this provision is questioned as it will
be very difficult for the authority to determine who
the shareholders of pub