ARTICLES Prop.Prac Act - ARCHIVE

Author: EAAB
Property Practitioner Act No. 22 of 2019
April 2020

BIG CHANGES FOR REAL ESTATE!

At the REIS Real Estate Summit held in Sandton on Friday, 18 October, Speaker Panelist, Mamodupi Mohlala, Chief Executive Officer for the Estate Agency Affairs Board put matters into perspective and shared information with stakeholders present of what this new Bill means for the organisation, its stakeholders and consumers.

On 03 October 2019 the President promulgated the Property Practitioners Act No. 22 of 2019 which brings about a very important era in the history of the real estate sector in South Africa.

The Estate Agency Affairs Board (EAAB) welcomes this opportunity, and although it may bring about some challenges for the real estate regulator due to the expansion of its statutory mandate, the EAAB embraces the opportunity that is brings. This is the first time in thirty years that this legislation is being amended due to the repeal of the Estate Agency Affairs Act 112, of 1976. The EAAB looks forward to the opportunity to redefine itself as the Property Practitioners Regulatory Authority.

So, what does it mean now that the Bill has been signed into law? Do things start to change immediately? Will the name of the Estate Agency Affairs Board be replaced as the Property Practitioners Regulatory Authority – Yes it does.

WHEN WILL THIS HAPPEN?

Transition provisions in terms of section 75 have been incorporated in the new Bill that will provide the EAAB ample opportunity for preparation in order to put in place the required measures to cater for the new Act. In terms of Section 77 an effective date will be pronounced which will speak to four critical areas:

The EAAB has already commenced with engagements with the Executive Authority on the following with the Department of Human Settlements, Water and Sanitation and the Parliamentary Portfolio Committee on the amendment process of the Regulations; Interim provisions; and the intention to engage with stakeholders on the effective date, and the preliminary issues on licensing.

The legislation now includes the entire spectrum of Property Practitioners involved in the purchase, sale and leasing of properties, the administration of properties and general dealing in property from funding through to the transfer of properties. This will however exclude attorneys and candidate attorneys; the Sheriff of the Court; A natural person who owns the property that in the ordinary course of their business sells the property belonging to him or her in their personal capacity.

At the REIS Real Estate Summit held in Sandton on Friday, 18 October, Speaker Panelist, Mamodupi Mohlala, Chief Executive Officer for the Estate Agency Affairs Board put matters into perspective and shared information with stakeholders present of what this new Bill means for the organisation, its stakeholders and consumers.

POSITIVE ENACTMENT OF THE NEW BILL

This new Bill establishes the Property Practitioners Regulatory Authority in terms of Section 5 for the Board regarding the executive function of the CEO and employees; the Regulator /Authority; the exemption powers in terms of Section 4(1); Transformation of the real estate sector Chapter 4; and the entire chapters 20 – 23. The Property Practitioners Bill provides for priority as an imperative for the critical initiatives to ensure transformation of the real estate sector which is under Chapter 4 of the Act, and the Charter Code under section 20(1). Procurement processes will now be linked to transformation under section 20 (2). It also removes regulatory barriers regarding the obligation of Principal estate agents to submit audit reports that are to be prepared by an expert in terms of section 23.

TRANSFORMATION

The new Bill creates a Property Sector Transformation Fund under section 21 as well as a Property Sector Research Centre which is incorporated under section 22. It further links licensing or issuance of a Fidelity Fund Certificate (FFC) to transformation by making it obligatory for all Principal estate agent recipients of a FFC to be in possession of a valid BEE Certificate in terms of section 50 (a)(x)

COMPLIANCE AND ENFORCEMENT

The inspection powers of the EAAB have been restored specifically with regard to search and seizure. This includes the appointment of inspectors, the power to issue compliance notices, the issuance of fines, a dispute resolution mechanism for mediation, adjudication and an Appeal Adjudication Committee.

FUNDING

The new Bill provides for funding of the Authority which allows for monies appropriated by Parliament; fees from Property Practitioners and investment of monies for the Fidelity Fund.

THE PROPERTY PRACTITIONERS FIDELITY FUND

The Fidelity Fund will remain the same as the current Fund in terms of the management and control of the Fund and any claims against the Fund.

POSITIVE ENACTMENTS FOR PROPERTY PRACTITIONERS

The new Bill provides for the issuance of Fidelity Funds Certificates over a three-year cycle in terms of section 47. It further subscribes that an application fee and penalty for failure to attach an application fee on application under section 47 (2) and section 47(4)(2), and the withdrawal of a FFC by way of a Court Order or Adjudication under section 52.

INITIATIVES AS THE REAL ESTATE REGULATOR

  • Innovative licensing regime – horizontal licensing on classes of licence;
  • Collection of licence fees;
  • Collection of contributions for the growth of the Fidelity Fund;
  • Education and Training and Continuing Professional Development (CPD) that is responsive to the needs of all Property Practitioners in the real estate sector.

STRUCTURAL CHANGES FOR THE REGULATOR

It is imperative that the organisation is restructured to cater and respond to the specific needs of all spheres of Property Practitioners in the real estate sector that fall within the framework of the Property Practitioners Act No. 22 of 2019. This will require the expansion and reconfiguration of most of the EAAB’s current departments and the recruitment of skilled employees. There will also be a need to create new departments to cater for Research and Development; a Mediation Unit, an Adjudication Unit, an Adjudication Appeal Unit and Branch Offices in all the major metropoles.

WAY FORWARD

The Property Practitioners Bill still needs to go through a formal declaration in the Government Gazette that the new law is enacted. Section 77 of what is now the Property Practitioners Act provides that “This Act is called the Property Practitioners Act, 2018, and comes into operation on a date fixed by the President by proclamation in the Gazette“. The Act will therefore not become law before such promulgation occurs in the Government Gazette.

The EAAB intends to have a real estate sector engagement before the end of 2019. This will include work streams of the various professions in the sector to discuss the convergence thereof for the purpose of licensing, licencing fees and the collection thereof, and dispute resolutions. It will further have continuous engagements where necessary with all stakeholders as to the progress.

The original article in My Agent can be viewed here: