Estate agents, known as “property practitioners” in terms of the Property Practitioners Act (PPA), which came into force in 2022, are usually paid their commission by the seller of the property. Despite the fact that the seller is usually the client who pays the agent, the new PPA compels agents to be fully transparent and ensure that prospective buyers have all the information available in order to make informed buying decisions.
Section 69 (2) of the Property Practitioners Act states: “A property practitioner owes a buyer and a seller a duty of care”.
Chapter 10 of the PPA describes exactly the duty of care which the property practitioner owes to every buyer – despite the fact that the agent’s commission is being paid by the sellers.
This is how the PPA law compels the agent to show care to every prospective buyer.
- In terms of this new law, owners (sellers) are required to make a written disclosure to every potential buyer regarding all of the significant defects to the property of which the owner is aware.
- The agent may not accept a mandate to sell from the owner without first obtaining from the seller this written disclosure of the property’s known condition.
- The agent must supply every potential buyer with a copy of the owner’s signed disclosure.
- The agent must attach the disclosure, signed by all parties, as an integral part of any agreement of sale.
- The agent must inform potential buyers that, in addition to the owner’s disclosure, a professional inspection may be required to determine significant defects or areas of non-compliance of which the owner may have been unaware.
Estate agents who fail to follow the law and show the now legally required “duty of care” to buyers, are liable for sanction by the Property Practitioners Regulatory Authority. Agents also open themselves to potential claims for damages by aggrieved buyers who feel that they were not treated fairly by the agent because they were not provided with the information required by law.
HouseCheck is keenly aware that the vast majority of agents are honest people who would like to make a full disclosure to potential buyers – both in the interests of fairness and transparency and also to avoid the possibility of unpleasant future come backs which may result in expensive legal proceedings.
In order to assist property sellers and their agents to comply with the new PPA law and to build bridges of trust and transparency with prospective buyers, HouseCheck has developed a “Pre-listing inspection report” whereby a seller, or their agent, can get a professional inspection report at a lower cost to HouseCheck’s usual Property Condition report. This HouseCheck Pre-Listing report can be used by both the seller and their agent to comply with the law and make a fully transparent disclosure on the known condition of the property to potential buyers
The Property Practitioners Act requires the owner to disclose in writing the owner’s knowledge of defects or non-compliance regarding all areas of the property. The HouseCheck Pre-Listing report mirrors the mandatory disclosure format and provides a professional assessment of significant defects and areas of non-compliance regarding:
- The roof
- Electrical systems
- Plumbing systems
- Swimming pool (if any)
- Heating and air conditioning systems
- The drains (and other sanitary disposal systems)
- Cracks and damp in the property, including the foundations and basements.
- Structural defects anywhere in the property
- Any boundary line disputes, encroachments or encumbrances
- Whether alterations or refurbishments have affected the structural integrity of any buildings
- Unapproved additions or improvements
- Whether the property has been named a heritage site.
The prospective buyer must also acknowledge in writing that “he/she has been informed that professional expertise and/or technical skill and knowledge may be required to detect defects in, and non-compliance aspects concerning, the property”.
