The Property Practitioners Act comes into force

The Property Practitioners Act 22 of 2019 (Act) is finally (and unexpectedly) coming into force on 1 February 2022. In 2019, the President Cyril Ramaphosa signed the Act into law, however at the time, the date of commencement had not yet been determined. As recently as a few days ago, the Act was confirmed to come into operation in less than a week’s time. Furthermore, the Minister for Human Settlements, Ms Mmamoloko Kubayi, published the Property Practitioners Regulations (Regulations) in terms of section 70 of the Act. As a result, the Act will repeal the Estate Agency Affairs Act 112 of 1976 (EAA Act), in its entirety.

26 Jan 2022 2 min read Corporate & Commercial Article

At a glance

  • The Property Practitioners Act 22 of 2019 will come into force on 1 February 2022, repealing the Estate Agency Affairs Act 112 of 1976.
  • The Act imposes new obligations on property practitioners, including the display of a Fidelity Fund Certificate, mandatory indemnity insurance, compliance with a code of conduct, and providing disclosures and warranties in property transactions.
  • Non-compliance with the Act can result in penalties, fines, and imprisonment for up to 10 years, making strict compliance crucial for property practitioners.

When the Act comes into force, it will place 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.

The Act is significantly stricter and more far-reaching than its predecessor, the EAA Act. In light of the serious consequences of non-compliance with the Act, any person who may fall under the broad definition of “property practitioner” is advised to seek guidance from a legal practitioner and ensure strict compliance with the provisions of the Act.

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