The latest legislation affecting property practitioners that the public should be aware of?
Category Buyers and Sellers
What is the latest legislation affecting property practitioners that the public should be aware of?
THE PROPERTY PRACTITIONERS ACT 22 OF 2019 (PPA)
The PPA was signed into law on 19 September 2019 and came into effect on 1 February 2022. The PPA creates a new regulator, the Property Practitioners Regulatory Authority (PPRA), which takes the place of the Estate Agency Affairs Board (EAAB) and now has enhanced regulatory scope and powers as a large component of property sector businesses and individuals who perform immovable property or business broking related activities are now regulated by the PPRA.
"Property Practitioner" is defined in the Act as any natural or juristic person, who for the acquisition of gain on his, her or its own account or in partnership in any manner holds himself, herself or itself out as someone who, directly or indirectly, on behalf of any other person-
performs certain specified activities relating to disposal or management of immovable property, or any business undertaking including the following:
auctioning, purchasing, managing, selling, hiring, letting, advertising, exhibiting for sale, marketing, facilitating the sale or lease of, negotiating, canvassing, offering to canvas, by electronic or other means, collecting monies in respect of, provides intermediary or facilitation services for, provides, procures, facilitates, secures or otherwise obtains or markets financing for or in connection with the management, sale or lease of a property or a business undertaking, including a provider of bridging finance and a bond broker, but excluding any person defined as a financial institution under the FSCA ,in other words, banks and credit providers are excluded.
The following are specifically excluded in the PPA:
- Anyone not performing property transaction facilitation activities in the ordinary course of business
- A natural person offering their personal property for sale.
- An attorney or candidate attorney registered as such who performs property practitioner activities only in the course of, in the name of and from the premises of his professional practice.
- A sheriff as defined in s1(a) of the Sheriff's Act.
The following are specifically included in the PPA:
- Home Owners Associations if they perform these activities
- Advertisers or marketers of time share or fractional ownership in developments.
- Persons who manage immovable property
- Trusts that perform property practitioner activities
- Directors, members, trustees and employees of property practitioners if they perform or manage property practitioner activities, including attorneys' employees who perform primarily these activities for the attorney.
- Anyone rendering any other service specified by the Minister in the Gazette
The following activities have been specified as constituting property practitioner activities in the Regulations pertaining to the PPA:
Reg 39.1.1. DEVELOPERS
- the sale, by auction or otherwise, by any person as part of the activities of operating a property development business, of any property or any interest, right or title in or to a property or a property development
- the foregoing shall not apply in circumstances where such sale, auction or other activity is conducted solely through the auspices of a property practitioner who is the holder of a current fidelity fund certificate (FFC) issued under the provisions of the Act; and
Reg 39.1.2. BUSINESS BROKERS AND FRANCHISORS
- business undertakings are included if they undertake any activity that relates to small, micro and medium enterprises, franchised businesses or new start-up ventures or newly created franchise concepts, whether such enterprise is sold as a going concern or as part of a business or by means of transferring the beneficial ownership in such enterprise.
In summary, the PPRA regulates the following 12 industries as they are defined as property practitioners in S1 of the PPA:
- Estate Agents
- Auctioneers
- Bond and Bridging Finance Originators
- Home Owners Associations (who perform property practitioner activities)
- Property Facilitators and intermediaries
- Business brokers
- Time share and fractional ownership practitioners
- Payment processing agents
- Attorneys' employees
- Property Developers
- Managing agents
- Property advertising platforms
The above information is meant to highlight the importance of ensuring that members of the public are aware of dealing with Property Practitioners as they are defined in the PPA. It is of utmost importance as these definitions all include businesses and individuals that deal with the public's money in property transactions.
Only clients of a registered property practitioner in possession of a valid Fidelity Fund Certificate (FFC) are protected in terms of the PPA in respect of a legitimate claim for compensation from the Fidelity Fund.
So, if you are dealing with any of the above-mentioned property practitioners as defined in the PPA, please ensure that they are compliant with the PPA... in your own interest!
Author: REDZetc
