Another new Act is about to enter the real estate industry, currently under draft as the Property Practioners Bill (the Bill).
The Bill was published on 31 March 2017 in Government Gazette 40733 (Notice Number 246) and a call for submissions and feedback, within 30 days thereof, was made.
In essence, the Bill, once passed, will replace the Estate Agency Affairs Act and replace the Estate Agency Affairs Board (EAAB), being the current regulatory body for the profession. The new body will be the Property Practitioners Regulatory Authority (the Authority), which will establish its own board and will be governed by and act through same.
A property practitioner includes managing agents, as defined in the Bill, as well as, inter alia, estate agents, rental agents and bond originators.
The Authority will perform much the same role as the EAAB, by regulating the conduct of the property practitioners and ensure that the Act is complied with.
But it’s not just a case of changing the Act and the regulatory board, a few other changes are envisaged through the new bill.
Transformation in the industry has been identified as a need and is an example of one such change from the old Act, also an Ombud service will be established to deal with complaints lodged in terms of the Act.
But what about the Estate Agency Fidelity Fund – a fund currently in place to protect consumers against pecuniary losses caused by registered estate agents? This fund will continue to operate under the Authority and similar rules in terms of claims shall apply.
As with the old Act, every property practitioner must operate trust accounts (one or more), be registered with the Authority, obtain an annual fidelity fund certificate and comply with the educational requirements set out.
Several managing agents have, hitherto, not registered with the EAAB, given the relatively broad definitions in the current Act, however this is not correct. Managing agents are estate agents by definition, and therefore must all register and comply with all aspects of the Act, i.e. must operate a trust account and must obtain annual fidelity fund certificates. Any deviation from this may prejudice the consumers’ ultimate protection against pecuniary losses.
Intersect Sectional Title Services is registered with the EAAB, operates trust accounts in terms of the Act, holds a valid fidelity fund certificate and its Principal holds an individual fidelity fund certificate as well. Moreover, Intersect holds insurance cover for professional indemnity, Directors and Officers liability and public liability, to comprehensively protect all its clients.