The 1^st of February 2022 saw the commencement of the Property Practitioners Act 22 of 2019 (PPA), bringing along significant changes in the regulation of the real estate sector in South Africa. Prior to the PPA the sector had largely been regulated by the Estate Agency Affairs Act of 1976, which has since been repealed.

The provision of a Mandatory Disclosure form, the effect of section 58 with regard to the use of particular service providers, how Fidelity Fund Certificates are issued and the requirement for BEE certificates, stand amongst the most significant of these changes.  

The other momentous issue is with regard to transformation within the property sector. Quoting verbatim from the Preamble of the PPA, it provides that ‘transformation of the property market is a necessary intervention that will benefit the historically disadvantaged individuals.’

We believe the idea behind the transformation thrust is to achieve inclusiveness and integration in the property sector, in order to encourage the historically disadvantaged sections of the population to be involved in the property sector. Section 21 provides for the Property Sector Transformation Fund as being a vehicle that will carry the aspiration of transformation in the property sector. 

Further provisions that seek this attainment are quite weighty and we will briefly discuss these.

Section 48 - Issued Fidelity Fund Certificate

Firstly, section 48 prohibits anyone to act as a property practitioner unless he/she has been issued with a Fidelity Fund Certificate. The aforesaid is also in addition to any other requirements that may be imposed in the other relevant provisions.

Section 50 - Required BEE Certificate

Secondly and of keen interest would be section 50 (a) (x) that provides that the authority may not issue a Fidelity Fund Certificate to anyone who is not in possession of a valid BEE certificate. It is noteworthy that the provision does not specify the level of BEE compliance, and it may be excusable to assume that minimum compliance would be sufficient to comply. This comes into the fray because many estate agencies are small and family owned, and thus provisions for BEE compliance will become key, further depending on the annual turnover of the agency as per the Amended Property Sector BEE Code of 2017.

The consequences of section 50 (a) (x) are far-reaching and it is important for property practitioners to be compliant with the law in terms of the aforesaid. 

Phoenix Group - Real Estate Training Courses Johannesburg

Phoenix Group specialises in real estate training. Not only do we assist Candidate Property Practitioners to achieve their Full Status - we also assist Principals and Business Owners with their BEE Compliance, Workplace Skills Planning and Intern Learnership Agreement tax rebates.

Contact us for professional and comprehensive assistance. 

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