2020 – Contentious Property Practitioners Act Regulations Released
Property Practitioners Act Regulations Roadshow
The Department of Human settlements has undertaken a road show throughout South Africa, explaining the implications of the proposed Property Practitioners Act Regulations, which were published in the Government Gazette recently.
HouseCheck went to the first event which was held In East London on Wednesday 11 March 2020.
The head of legal services at the Department of Human Settlements, Khwezi Ngwenya did the presentation and Advocate Jan Tladi of the EAAB was in hand to handle questions.
According to Ngwenya transformation is a big priority for government. Although there is no current legislative impediment to people of colour becoming estate agents, because of the lack of transformation in the sector, the government has to be innovative in order to encourage transformation.
At the heart of the problem, are the costs of doing business according to Ngwenya. Part of the solution therefore is to lower costs of entry into the industry. The regulations seek to address this by providing for applications for exemption from certain provisions of the ACT, most notably the need to have trust accounts, with the associated audit costs.
Ngwenya believes that this will also keep some existing agents in the industry. With the current economic pressures, this is a priority for government he said.
The Act and associated regulations also regulate the conduct of property practitioners through a new duty of care to both buyers and sellers, the new definition of a property practitioners client, the code of conduct for property practitioners and a new prescribed mandatory declaration for for sellers. The regulations also prescribe that buyers need to acknowledge that it is in their interest to get a property inspection done.
Property Practitioners Code of Conduct
The regulations set out the property practitioners code of conduct, as well as defining undesirable business practices. Ngwenya says that the Act and associated regulations allows the new Property Practitioners Regulatory Authority to police undesirable conduct and also allows for the regularising of “runners”, social media marketers and other unqualified agents. No commissions will be paid to unregistered agents under the new legislation.
Your input to the regulations is required
Ngwenya says that they have extended the public participation phase from the required thirty days to sixty days. Ngwenya was at pains to point out that under the current economic circumstances it is very important for the industry players to provide inputs to the proposed regulations especially to the fee structure. He said that the State President had made it clear that they should not be providing impediments for the industry during the economic slow down, but rather they should be creating an environment to keep people in the industry.
The Act questioned
Most of the attendees were positive about the roadshow, even though many acknowledged that they had not had the time to study it yet. But the appreciation from the floor for the roadshow was positive. However a number of concerns were raised around the EAAB’s ability to handle the new enlarged responsibilities in terms of the ACT.
Ngwenya pointed out that new provisions in the Act stipulated time frames for issuing Fidelity Fund Certificates and that they had introduced a validity period of three years rather than one year going forward. In addition if the property practitioners application was not dealt with within 30 days then they were deemed to have been issued with the certificate.
Adv Jan Tladi acknowledged some of the EAAB’s shortcomings, particularly with respect to their IT systems, but said much had been done to equip the staff to deal with the new requirements. H expressed confidence that there would be an improvement in service delivery from the new Property Practitioners Regulatory Authority.
Ngwenya pointed out that much of the legislation had been drafted to deal with property practitioners regulations but that it was up to the industry to use the 60 day comment period to point out areas of concern and duplication so that once finalised the regulations would be there to offer the best support.