20 July 2022 by and Combined Corporate & Commercial and Real Estate Alert

Part 2 | Property Practitioners Act unpacked: Prescribed minimum information on letterheads and written communication

The Property Practitioners Act 22 of 2019 (Act) came into effect on 1 February 2022. The Act has repealed the Estate Agency Affairs Act 112 of 1976 (Estate Agency Affairs Act) in its entirety.

The Act places a number of new obligations on property practitioners in respect of letterheads and written communication, as well as marketing and property related agreements, not all of which were previously contained in the Estate Agency Affairs Act.

Letterheads, written communication and marketing material

The Act prescribes certain minimum information that must be contained on all letterheads, written communication and marketing material, including physical and electronic marketing brochures, website adverts and social media adverts. The most important provisions are:

  • A holder of a fidelity fund certificate must ensure that the following prescribed sentence is reproduced on all letterheads and marketing material: “Registered with the PPRA”.
  • A property practitioner must, if they conduct their business under a trade name, clearly disclose the full name in all correspondence and other written documentation.
  • Where a property practitioner who is a natural person acts on behalf of any business property practitioner, that natural person must reflect the following information in respect of the business property practitioner, on all letters, emails and similar forms of communication, as well as all business cards and marketing material: (i) full name; (ii) email address; and (iii) telephone number.
  • All emails, letters and marketing material must reflect, in respect of each property practitioner (i) that is a sole proprietor or business property practitioner that they hold a fidelity fund certificate; (ii) whether or not that business property practitioner operates a trust account; (iii) in respect of each natural person that is associated with that business property practitioner, state the name of such natural person together with a statement that such natural person holds a fidelity fund certificate and the capacity in which the person acts as a property practitioner, being a principal, a full status property practitioner or a candidate. This information must also be reflected on all property related agreements, in addition to the minimum information set out below.
  • Certain additional obligations apply in respect of franchisees. A franchisee must disclose clearly in all written communication, advertising and marketing materials that they operate in terms of a franchise agreement, as well as the name of the franchisor.

Agreements in respect of property transactions

The Act also prescribes certain minimum information that must be contained in all agreements in respect of property transactions. This includes mandates, offers to purchase, and all addenda. The most important provisions are the following: 

  • In particular, any agreement to which the property practitioner is a party must contain the following clause: “[Name of property practitioner] hereby warrants the validity of his/her/its fidelity fund certificate as at the date of signature of this agreement.”
  • The Act obliges property practitioners to deliver a disclosure form to a seller or lessor for completion before concluding a mandate, and to a purchaser or lessee before making an offer. The disclosure form is a standard template document prescribed by the Act. If no disclosure form is signed and attached, 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 who fails to comply with the requirement of the mandatory disclosure form may be held liable by an affected consumer.
  • As is the position with written communication and marketing material, where a property practitioner who is a natural person acts on behalf of any business property practitioner, that natural person must reflect the following information in respect of the business property practitioner, on all contracts: (i) full name; (ii) email address; and (iii) telephone number.

Non-compliance with the Act

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. 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. Even if property practitioners do not hold monies in trust, they will need to comply with the remaining obligations in terms of the Act.

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