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property practitioners


NEW  ‘property practitioners’ laws for SA – is it worth the paper it is written on?

The ‘new’ Property Practitioner’s Act 22 of 2019 – which was recently signed into law, replacing the out of date Estate Agency Affairs Act 112 of 1976 – brings important reform to the property industry as a whole.

The Act introduces a host of much-needed changes not only in terms of its substantive provisions but also in terms of the apparently robust regulations and enforcement thereof which is intended to profoundly change the business-operating landscape of  ‘property practitioners’ in South Africa.

Some of the changes include notably the following:

  • Who is who in the zoo? Defining who is a “property practitioner”– The Act broadens the scope of legislation beyond traditional estate agents to cover commercial property brokers, bond originators, home inspectors, homeowners’ associations, companies selling timeshare and fractional title, property developers and property managers, who now all fall under the Act.
  • Fidelity Fund Certificates– Anyone who earns a commission or brokerage from the sale or leasing of a property, needs a valid Fidelity Fund Certificate which must be produced on request from a seller or landlord. The Act tightens the regulations around Fidelity Fund Certificates beyond the current requirements to include possession of a valid tax clearance and a BEE certificate. It is also required that not just the agent/s, but the agency/business and all of its property practitioners must be fully compliant;
  • Property defects– This is an important element that sellers and landlords need to be aware of. While it has for some time been best practice to include a comprehensive property defects disclosure document as part of a property transfer, it is now mandatory for all property sale and lease agreements. No mandate may be accepted from a seller or landlord without this document, which will then also form part of the sale and lease agreement;
  • New Board of Authority– The current Estate Agencies Affairs Board will be replaced by a new governing body known as the Board of Authority. This new board will govern the property profession across the board, not just estate agents as is currently the case.

Rental Housing Amendment Act

The amendments to the Rental Housing Act 50 of 1999, include the following significant changes forcing further regulation on land owners:

  • Lease agreements to be in writing– All lease agreements must now be in writing and be legally enforceable. The agreement and all provisions, duties and obligations must be explained to the tenant and be clearly understood. All amendments to the lease must also be in writing;
  • The property rented must be habitable– The landlord must ensure that the rental property is in a habitable state and that it is safe and suitable for living, properly maintained and has access to basic services such as water and electricity;
  • Tenant not be denied access to basic services or to the property– Another important aspect is that the landlord may not cut off basic utilities such as electricity and water to non-paying tenants, only a local authority can do so. A landlord may also not change the locks or deny the tenant access to the property without a proper court order;
  • Defects to be recorded in writing – A joint inspection of the property must be done at the commencement of the lease to identify any defects including those that need to be repaired by the landlord. The defects list must be attached to the lease agreement. Upon expiry, another inspection must be done to determine whether any damage has been caused during the tenant’s occupancy;
  • Tenants’ deposits must be invested and refunded– According to the Act, the deposit must be deposited in an interest-bearing account. The landlord must:
  • issue a written receipt for all payments received from the tenant, including the deposit;
  • pay the deposit together with interest accrued to the tenant within seven days of the expiration of the lease.
  • Incur reasonable costs to repair damage and may be deducted from the deposit, but subject to proof of damage and the costs.

Summary of salient objectives of the ‘NEW’ Property Practitioners Act 22 of 2019:-

  • to provide for the regulation of property practitioners;
  • to provide for the continuation of the Estate Agency Affairs Board as the Property Practitioners Regulatory Authority;
  • to provide for the appointment of the members of the Board and matters incidental thereto;
  • to provide for the appointment of the Chief Executive Officer and other staff members of the Authority;
  • to provide for transformation of the property practitioners sector;
  • to provide for the establishment of the transformation fund and establishment of the research centre on transformation;
  • to provide for compliance with and enforcement of the provisions of the Act;
  • to provide for the continuation of the Estate Agents Fidelity Fund as the Property Practitioners Fidelity Fund;
  • to provide for consumer protection;
  • to provide for the repeal of the Estate Agency Affairs Act, 1976.