The most devastating piece of legislation to hit the property industry has seemingly caused only a few ripples in the real estate pond, but if truth be told, agents who continue to bury their heads in the sand and refuse to conform with the Consumer Protection Act (CPA) could end up being on the losing end of the deal.
One of the objectives of the CPA is to ensure that the consumer understands the content of all the documentation required for the buying and selling of property. In other words, the mandate, sales agreement and any other documentation that is required has to be written in such a way that the average man with an average intelligence can fully understand the wording.
This is according to Jaco Rademeyer of Jaco Rademeyer Estates who says prior to the CPA, agents were, to a large extent, shielded from most aspects of the sale after the sales agreement had been signed. In the event of disputes between the buyer and seller, agents were, for the most part, merely regarded as “interested onlookers”.
This has now changed and agents are going to have to take far more responsibility and be far more accountable than before, he says.
Rademeyer believes that the CPA is going to rock the industry and agents who have not yet sought advice on how best to deal with the changes in the law urgently need to consult with an attorney or another professional body that specialises in, what is currently, a somewhat murky piece of legislation.
He says because the CPA has only recently been introduced into South African law, the legislation has yet to be tested in a court of law. “There appears to be a great amount of confusion as to what an agent can and cannot be held liable for, however, this is definitely a case of closing the stable door before the horse has bolted and there are ways for agents to protect themselves from potential lawsuits.”
The CPA, to large extent, he says is going to change the way agents operate. Securing a mandate for example is no longer just a matter of viewing a property and asking a seller to sign on the dotted line. The process that ordinarily took a couple of days to finalise can, if all the conditions of the CPA are met, take as long as a week to complete.
One of the objectives of the CPA is to ensure that the consumer understands the content of all the documentation required for the buying and selling of property. In other words, the mandate, sales agreement and any other documentation that is required has to be written in such a way that the average man with an average intelligence can fully understand the wording.
Another very important factor is the disclosure of information. It is imperative that agents insist that the seller make a comprehensive list of any faults on the property.
“Agents now need to put everything in writing and should ask the seller to document every fault that they are aware of.
“Every suspected and patent defect that the seller knows about must be acknowledged to the agent because in the event of a dispute the agent could be held responsible in terms of the CPA,” says Rademeyer.
He says this is because under the CPA a person who does not ordinarily make a living out of selling property will not be held accountable whereas an estate agent, who sells property for a living, will.
The fact that many agents will disagree with what appears to be a one-sided piece of legislation that has subjected them to new standards is immaterial and until a case is tested in court, agents are going to have to err on the side of caution, protecting themselves against every eventuality.
