For many of us, buying a house is a very important part of our lives. Most of us use Estate Agents – or we used to. Now they are called property practitioners, and they fall under the authority of the Property Practitioners Act No. 22 of 2019 which came into effect on 1 February 2022. The Act establishes the Property Practitioners Regulatory Authority (S5) which supersedes the old Estate Agency Affairs Board. The Minister (of Human Settlements) is required to establish a Code of Conduct. Every property practitioner is required to comply with this Code of Conduct [S61(1)] and a property practitioner must supply a buyer or purchaser a copy of this code on request.
Between the Act, the regulations published in terms of the Act and the Code of Conduct there are four things that you really need to be aware of when dealing with property practitioners and transacting property.
- Mandatory Disclosure Form – A property practitioner must not accept a mandate unless the seller or lessor of the property had provided him or her with a fully completed and signed mandatory disclosure in the prescribed form [S67]. This form generally notes any defects in a property that the seller knows about and, should they decide to buy the property, the buyer should know about too prior to deciding to purchase. It is noted that this form is to be attached to any agreement. If this form is not attached it is deemed that no defects or deficiencies of the property were disclosed to the purchaser.
- Code of Conduct [C34.5.1] states that an estate agent (see below) shall explain to every prospective party any written offer or contract negotiated or procured by him in his capacity as an estate agent, prior to signature thereof by such party, the meaning and consequences of the material provisions of such offer or contract, or, if he is unable to do so, refer such party to a person who can do so;
Please do not just sign a document that is put in front of you. Read it and make sure you understand it. You should also make sure you are in possession of a signed copy of any agreement that you are a party to.
- Code of Conduct [C34.6] states that no estate agent shall convey to his client or any other party to a completed or proposed transaction in which he acted or acts as an estate agent, that he is precluded by law from charging less than a particular commission or fee, or that such commission or fee is prescribed by law, the Authority or any institute or association of estate agents or any other body;
In other words, the fee commission is totally negotiable.
- Code of Conduct [C34.6.4] states that no estate agent shall include, or cause to be included, or accept the benefit of, any clause in a mandate or in a contract of sale or lease of immovable property, providing for payment to him by the seller or lessor of immovable property, of any remuneration, commission, benefit or gain arising from or connected with a contract of sale or lease, regardless of whether the purchaser or lessee is financially able to fulfil his obligations in terms of the said contract;
The author of this article would go further than this. The remuneration of a property practitioner should be effective on registration of transfer of the property, not before. This goes back to the willing and able seller, willing and able buyer principle.
- The Code of Conduct issued by the Property Practitioners Regulatory Authority refers to an “estate agent”. This term is not defined in the Act. This term appears to have been replaced by the term “property practitioner”. As another aside the contact details of the Enforcement and Compliance Department of the Property Practitioners Regulatory Authority is legal @eaab.org.za (the old Estate agency Affairs Board address!)
[S68] requires that the Authority publish guideline agreements on its website.
Any person may, in the prescribed form, lodge a complaint with the Authority against a property practitioner in respect of financing, marketing, management, letting, hiring, sale or purchase of a property [S28(1)].
The Act further entrenches a Property Sector Transformation Charter Code. All state entities must ensure that a Property Practitioner adheres to this code if they wish to provide their services to the state.
A property practitioner is required to be in position of a Fidelity Fund certificate [S56(1)].
