The Minister of Human Settlements, Mmamoloko Kubayi officially launched the Property Practitioners’ Regulatory Authority (PPRA), formerly known as the Estate Agency Affairs Board (EAAB) on 1 February 2022.
The Property Practitioners Act (PPA) which governs PPRA also came into effect on Tuesday 1 February 2022. The Act provides for among other things, the regulation of property practitioners; transformation of the property sector and continuation of the Estate Agents Fidelity Fund as the Property Practitioners Fidelity Fund.
Key changes being introduced by the new Act are as follows:
The now-mandatory inclusion of a comprehensive property defects disclosure document for both property sales and rentals is one of the most essential new consumer protections.
The PPA is tightening up on legislation in a number of areas, including disclosure. It also mandates that any company that receives a commission or brokerage from the sale or lease of a property have not only a valid Fidelity Fund Certificate (FFC), but also tax clearance and BBE certificates.
However, in order to alleviate administrative effort, new FFCs will be valid for three years rather than one. Fees have also been standardized at all levels of professional practice. For the first two years of their candidacy, only Candidate Property Practitioners will pay a reduced cost; after that, ordinary fees will apply.
The Property Practitioners Regulatory Authority, or PPRA, which replaces the Estate Agency Affairs Board, would ideally better handle the issuing and enforcement of FFCs.
For the time being, computerized application processes and downloaded FFCs are a good start. Amnesty is also available to agents who have previously operated in a non-compliant manner, as long as they are not under criminal investigation or prosecution.
However, the now-legislated automatic acceptance for applications not handled by the Authority within the specified time may not be as effective as planned.
After automatic approval, the Authority is required to produce a certificate within 10 working days.
Thankfully, the PPA does not make all processes more difficult. Many property professionals will benefit from the revisions to trust account regulations, which will bring administrative and financial relief.
Previously, regardless of whether or not they managed trust funds, all property professionals were required to hold a trust account. Those accounts, whether they were active or not, accrued bank fees and obliged businesses to undergo a comprehensive – and costly – annual audit.
Property professionals now only need a trust account if they work with trust funds. There is no requirement for you to have your own trust account if you use a dedicated third-party payment processing agent or intermediary with their own compliant trust account.
As a result, your company’s financial statements can be reviewed in a significantly more straightforward and cost-effective manner. Not having your own trust account necessitates filing an exemption application.
The new rules will also make property practitioner training easier and cheaper.
Prospective agents can study for and take the Professional Designation Examination (PDE) before joining an agency under the PP Act.
There will be no more year-long internships or costly NQF4 tests. If you pass the PDE, you can start selling real estate in as little as six months — under supervision – if you complete six more practical course modules.
Better agent support is also at the heart of the Transformation Fund’s changes. It will be governed by an independent organization selected by the PPRA, with existing historically disadvantaged property practitioners receiving training, development, and financial assistance.
Small enterprises may be able to take advantage of new prospects in security estates and other advancements in the near future. This is due to the PPA’s ban on real estate brokers being charged ‘accreditation fees’ in exchange for exclusive rights to property transactions within a development.
Estate sellers and landlords would no longer be restricted to the approved agents of their development. This ensures that all firms, large and small, have an equal opportunity to earn mandates based on the quality of their service rather than their bank account size.
Property developers must now obtain a license to trade under the Act, which also intends to better regulate and change the business. Developers will no longer be permitted to sell their own properties without first registering as property practitioners, allowing real estate companies to provide this service to more people.
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