On 31 March 2017, the Department of Human Settlements has published the Property Practitioners Bill (hereinafter referred to as “the Bill”) in Government Gazette 40733 (Notice Number 246) for public comment. The Bill is designed to regulate property practitioners and will repeal the current Estate Agency Affairs Act No. 112 of 1976.
In the Bill, the term “Property Practitioner” has a wide definition and includes estate agents, rental agents, mortgage originators, property inspectors, valuators, managing agents and anyone who acts as an intermediary or facilitator in concluding a sale agreement or lease agreement of immovable property.
The Bill will apply to the marketing, promotion, managing, sale, letting, financing and purchase of immovable property and also regulates any rights, obligations, interests, duties or powers associated with or relevant to such property.
The Property Practitioners Regulatory Authority will be established, whose functions will include the regulation of the way property practitioners deal with consumers, and the manner in which they market, manage, finance, let, sell and purchase property. To assist the Authority, it may appoint inspectors to act on its behalf and have the power to enter and inspect business premises and seize documents, in some instances even without a warrant.
Furthermore, a Property Practitioners Ombuds Office will be established to consider and dispose of complaints lodged in terms of the Bill and to provide mechanisms for the resolution of those complaints in a fair, informal, economical and expeditious manner.
The Bill also envisions the continuation of the Estate Agents Fidelity Fund, which will now be referred to as the Property Practitioners Fidelity Fund. No practitioner will be entitled to receive any remuneration if they are not in possession of a current fidelity fund certificate and a further obligation is placed on conveyancers to obtain a certified copy of this certificate prior to paying any remuneration to the property practitioner.
One of the interesting developments, is the introduction of a mandatory disclosure form to be completed by the seller/lessor and attached to all sale or lease agreements. In the absence of such form, the agreement must be interpreted that no defects of the property were disclosed.
The Minister will prescribe a code of conduct, norms and standards for marketing of property and will also determine undesirable practices of property practitioners. Sanctions on offences set out in the Bill may include a reprimand of the property practitioner and “name and shame” on the Property Practitioners Regulatory Authority’s website, withdrawal of fidelity fund certificate, a fine of up to R 200 000, imprisonment of up to 10 years or a sanction suspended for a maximum of 3 years.
At the end of the day, the Bill’s aim is to transform the property sector and its implementation will certainly lead to debate but also positive change.