Property Practitioner Act 22 of 2019

The long-awaited. The Act that has brought significant changes to the property sector. Amongst others, the Act recognises the need for transformation within the property sector and the protection of consumers.

The much-anticipated Property Practitioner Act 22 of 2019 (the “Practitioners Act”) came into operation on the 1st of February 2022, with this commencement the Estate Agency Affairs Act 112 of 1976 (Estate Agency Act) which presently governs the regulatory framework dealing with estate agency affairs was repealed.

The Act places several new obligations on property practitioners, not all of which are contained in the EAA Act. The principal obligations placed on property practitioners under the Act are as follows:

mandatory display of a Fidelity Fund Certificate (FFC);
property practitioner not entitled to remuneration in certain circumstances;
maintaining mandatory indemnity insurance;
complying with a prescribed code of conduct;
complying with the Property Sector Transformation Charter Code;
providing certain mandatory disclosures as regards the property in all agreements relating to a property transaction;
providing a warranty as regards the validity of the property practitioner’s FFC in any agreement relating to property transactions;
inclusion of certain prescribed minimum information on all written communication and marketing material, as well as certain additional information in respect of franchisees; and
certain limitations on relationships with other property market service providers.

Non-compliance with the provisions of the Act bears the risk of incurring significant penalties, such as repaying any fees received for a property transaction, and practitioners may be issued with a fine. Furthermore, any person convicted of an offence in terms of the Act is liable to pay a fine, or to imprisonment for up to 10 years.

Reporting deadline, 4 months after financial year end.

The commencement of the PPA has also introduced changes to trust account requirements which intend to bring about welcome administrative and financial relief to many Property Practitioners. Before the commencement of the Act, all practitioners were required to open trust accounts, regardless of whether they actually handled trust monies or not. These trust accounts, in use or not, would accrue bank fees and forced businesses to undergo full annual audits which proved to be expensive. Under the new Act, it is no longer a requirement for all practitioners to have trust accounts and now, only Property Practitioners who are involved in handling of trust monies are required to have trust accounts. This also applies when using intermediaries with their own compliant trust accounts. The amendment of trust account requirements enables simpler and more affordable annual reviews for businesses.

Should you require any further information for your accounting and audit compliance requirements contact us.