The long-awaited Property Practitioner Act – which came into operation on 1 February – has recognised the need for transformation within the property sector and the protection of consumers.

Lethabo Mashishi, of Adams & Adams, says as a start, the Act has broadened the scope of its application by consolidating all role-players in the property sector under this Act.

The introduction of the concept of a ‘property practitioner’ does not only refer to estate agents, but now includes other role-players such as bridging financiers, property developers and property managers.

Writing on the Go Legal site, Mashishi says in order to address the inequalities and bring about transformation within the property sector, the Act provides for the establishment of a Property Practitioner Regulatory Authority, which must implement and assess measures to progressively promote an inclusive and integrated property sector, implement appropriate measures and assess the state of transformation within the property sector. 

The Act provides that when procuring property-related goods and services, all organs of state must utilise the services of property practitioners who comply with the BB-BEE and employment equity legislation and policies.

The Act further requires the authority to open a property sector transformation fund and utilise this fund in a manner that ‘will promote black-owned firms and principals, encourage the participation of historically disadvantaged groups within the property sector and promote awareness of property transactions and business undertakings’.

Mashishi says the Act offers much-needed protection to consumers.

Property practitioners need to obtain a mandatory disclosure form from all sellers or lessors, disclosing all defects on the property that are known.

The property practitioner may not accept a mandate if this form is not produced.

Furthermore, a property practitioner may not enter into an arrangement whereby a consumer is obligated or encouraged to use a particular service provider – including an attorney – to render any service.

The Act also requires a property practitioner to be in possession of not only a Fidelity Fund Certificate, but also a Tax Clearance Certificate and BEE Certificate.

Adds Mashishi: ‘It is clear that this Act will have a far-reaching impact on the property sector. As this Act has just been recently implemented, we are yet to see its practical application within the sector. It is advisable for everyone who falls under the definition of “property practitioner” to familiarise themselves with the provisions of this Act or seek legal advice in order to understand the implication and application of this Act to their business.’

Full analysis on the Go Legal site