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Principal Obligations of Property Practitioners under the Proposed Property Practitioners Act

August 23, 2021

1. Fidelity Fund Certificate – This must be displayed in every place of business where the agent conducts Property transactions for inspection by consumers if requested.

2. Trust Account – Every property practitioner must open and keep one or more separate trust account:

  • Appoint an Auditor
  • Provide the Property Practitioners Regulatory Authority with all information with regards to the trust account and auditor appointed.
  • Deposit all trust money in the relevant trust account.
  • Keep separate records in respect of the Trust Account and cause them to be audited.

3. Responsibility to keep Accounting Records and other documents

  • Every Property Practitioner must for a period of 5 years retain:
  • All documents exchanged with the authority
  • All agreements, mandates and mandatory disclosure forms relating to financing, sale, purchase, or lease of property.
  • And any advertising or marketing material relating to the carrying on of business as property practitioner.

4. Remuneration for Property Practitioner

A property practitioner is not entitled to any remuneration unless the property practitioner, and if a company, every director of such company is in possession of an FFC. A conveyancer may not pay any remuneration or other money to a property practitioner unless the practitioner has provided the conveyancer with a certified copy of their FFC.

5. Indemnity Insurance

The minister may in terms of the Property practitioners act prescribe indemnity insurance which a property practitioner must take out and maintain.

6. Comply with the Code of Conduct

Every Property Practitioner must comply with the prescribed code of conduct. (Still to be published the minister of human settlements.)

7. Property Sector Transformation Charter code.

Every Property practitioner must comply with the Property Sector Transformation Charter Code.

(Still to be published)

8. Providing Mandatory Disclosures

  • The Property Practitioners Act obliges property practitioners to deliver a “disclosure form” to a seller/lessor before concluding a mandate, and to a purchaser/lessee before making an offer.
  • The disclosure form must be signed by all parties and attached to the sale or lease agreement.
  • If no disclosure form is signed, the act provides that the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser.
  • A property practitioner cannot accept a mandate unless the seller or lessor has provided a fully completed and signed disclosure form.

9. Limitation on Relationships with other Property Market Service Providers

  • Section 58(2) of the Property Practitioners Act:
  • Outlaws any type of practice in which a practitioner provides a consumer with an incentive to use a particular conveyancer or service provider.
  • These obligations are clearly intended for the protection of consumers
  • Any property practitioner in contravention of the act will be required to repay any fees received for a property transaction and may be issued with a fine or imprisonment for 10 years.

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