The Property Practitioners Act
The Property Practitioners Act has been signed into law by President Ramaphosa and we await confirmation of its effective date. The New Act will replace the Estate Agencies Affairs Act 112 of 1976 and brings with it a number of changes for the property industry. As Conveyancers, we play a major role in the property industry and we are interested to see what effect the Property Practitioners Act will have on the industry.
One of the most dramatic changes is the definition of who is considered a property practitioner. The definition is much wider than the definition contained on the Estate Agencies Affairs Act and includes a natural or juristic person acting as a bond broker, home inspector, facilitator of an agreement of sale or lease, a seller of timeshare or fractional title, a property manager and a property developer.
The New Act applies to the marketing, promotion, managing, sale, letting, financing and purchase of immovable property, and to any related rights, interests and obligations. The New Act provides for a new regulatory authority for the industry and establishes the Property Practitioners Ombud’s Office.
The objective of the Ombud’s Office is to –
(a) consider and dispose of complaints lodged in terms of the Property Practitioners Act in respect of the financing, marketing, managing, letting, hiring, sale and purchase of property;
(b) provide mechanisms for the resolution of those complaints; and
(c) generally, ensure that the complaints are disposed of in a procedurally and substantively fair, informal, economical and expeditious manner.
The New Act provides limitations on relationships between Property Practitioners and property market service providers. In this regard, a property practitioner may not practice in association with any person who is prohibited by any law, code of conduct or other reason.
Importantly, a Property Practitioner may not enter into any arrangement, formally or informally, whereby a client is obliged or encouraged to use a particular service provider including an attorney or conveyancer to render any service or ancillary services in respect of any transaction of which that property practitioner was the effective cause.
Besides the above, the Minister must also, after consultation with the regulatory authority, prescribe a code of conduct with which every property practitioner must comply.
The New Act also provides for a mandatory disclosure form. It states that a property practitioner must not accept a mandate unless the seller or lessor of the property has provided a fully completed and signed disclosure in the prescribed form. The property practitioner must provide a copy of the completed disclosure form to a prospective purchaser or lessee who intends to make an offer for the purchase or lease of a property. A property practitioner who fails to comply may be held liable by the affected person.
It is important to remember that the seller has the right to choose and appoint the conveyancer who attends to the transfer of their property. Although a purchaser can request that the services of a certain conveyancer are used, the seller has the power to make the final decision and should do their homework to ensure that the conveyancer they appoint is the correct choice. It is vital to ensure that the appointed conveyancer is experienced and knowledgeable, but also has a high service standard and efficiently attends to their work.
Contact our Conveyancing Team for further information and advice or visit www.pagdens.co.za/legal-service/property. We have been in the industry for over 120 years and pride ourselves on our conveyancing experience and high quality client service.
This article is for general information should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact an attorney for specific and detailed advice. Errors and omissions excepted (E&OE).