Effective 1 February 2022, the new Property Practitioners Act (PPA) comes into effect. This is a welcome step in the right direction for an industry previously tarnished by unclear and often poorly managed practices and legislation. The objective of the new Act is to clear up all the grey areas for both the rental and buying property market, we ultimately have a responsibility to protect the consumers through formally legislating processes considered as best practice. Here we some up how each topic is affected:
MANDATORY DEFECTS DISCLOSURE: It is now compulsory to include a comprehensive property defects disclosure document for both property sales and rentals. Under the PPA, it now becomes officially illegal to accept a mandate from a seller or a landlord without receipt of this comprehensive document. Further, the document is required to be signed by all parties and form part of any sales or lease agreement. The outcome = honest and transparent property transactions!
Take home note: Ensure you receive this comprehensive disclosure document from your agent
CERTIFICATION: Disclosure forms a part of the bigger picture in the change of legislation which also required any business earning commission or brokerage from the sale or lease of a property to hold, not just a Fidelity Fund Certificate (FFC), but tax clearance and BBE certificates as well. The upside for agencies to make it easier to comply is that FFC certificates will now be valid for a three year period.
Take home note: Is your agency FFC compliant? Ask to see their certification!
TRUST ACCOUNTS: Good news! Changes to the Trust Account processes and requirements are that property practitioners are no longer required to have a trust account if they are not handling trust monies.
Take home note: Check who handles your agencies funds. If they do, they need a separate Trust Account, if not, then find out who is responsible to hold funds in a Trust account on your behalf.
TRAINING: The new regulations provide for more affordable property practitioner training and a platform that agents can complete training prior to joining an agency, providing them with the critical basic knowledge base upfront. This ensures that agencies are able to provide the relevant training to their teams and that you as the client are receiving skill-based services from your chosen Property Practitioner partner.
Take home note: Ask your agent if they have or are busy completing their PDE (Professional Designation Examination)
TRANSFORMATION: The property industry is one that sees a slow uptake in transformation, and the new Act has appointed an Independent Body to oversee the financing and support of previously disadvantaged property practitioners, bringing diversity which is important to contribute towards job creation.
Take home note: The industry will be well-managed by an Independent Body and strives to create diversity within this space and create opportunities! No real benefit to the property owner or purchaser, however it is important to support our economy as part of any process.
EQUAL OPPORTUNITY: Promoting small business within security estates and other developments as a result of the abolition of the practice of charging real estate agents “Accreditation Fees” in return for exclusive rights to property transactions within a development. Developers will also have to register as a property practitioner before they are able to sell their own properties.
Take home note: Sellers and landlords within estates are no longer limited to their development’s approved agents. The benefit is that property value assessments are provided by multiple agents and therefore it is easier to determine the realistic market value of your property prior to taking the decision to go to market.
INDUSTRY CONSULTATION: As part of this process, the PPRA has formally been mandated to consult with the property practitioners it governs and will apply these new regulations as a critical goal of achieving standardisation and improving the overall consumer experience when trading in the property industry.