The Property Practitioners Act – Shepstone & Wylie

The Property Practitioners Act B21-2018 (“the New Act”) has recently been adopted by parliament. The New Act will replace the Estate Agencies Affairs Act 112 of 1976 (“the Old Act”). The Old Act regulates certain activities of estate agents and is limited to that extent, whereas the New Act is broad and deals with numerous problems currently facing the property market.

The New Act purports to achieve a healthy and balanced property secondary market, the effect of which will promote home ownership in the affordable and secondary property market (“the property market”).

The New Act unequivocally seeks to redress issues around transformation within the property market. Like all measures taken to break the glass ceiling, many changes follow, and it is no different in the property market.

Some of the changes the New Act introduces are discussed below:

Regulation of Property Practitioners: The definition of a “property practitioner” encompasses any bond broker, home inspector, facilitator of an agreement of sale or lease, a seller of timeshare or fractional title, a property manager and a property developer.

The legal fraternity in its entirety is excluded from the definition. Also excluded from the definition are sheriffs of the court, a person offering property practitioner services but not in the normal course of his business, and a person selling their own property.

The New Act is wide and all encompassing, ensuring that anyone remotely associated with property transactions will be regulated by the New Act. Unlike the Old Act which is limited to the regulation of estate agents (“estate agents”) which the Old Act defines as those involved in the advertising, letting and collection, and the sale of property for some form of gain.


Establish of the Property Practitioners Regulatory Authority (“the PPRA”): The regulatory authority for estate agents under the Old Act is the Estate Agency Affairs Board (“the EAAB”). the New Act continues the EEAB authority but replaces it with the PPRA.

The function of the PPRA is to regulate the conduct of property practitioners in relation to financing, marketing, letting, hiring sale, consumer education and purchase of property.

Under the Old Act, only estate agents are regulated by the EAAB, however as the New Act is all encompassing of property practitioners, the PPRA regulates all property practitioners. The EEAB protects the interests of the public very broadly while the PPRA specifically protects consumers in the property market.

Those property practitioners other than estate agents who were previously regulated by the EAAB will now be subject to dual regulation as many property practitioners are already regulated by a regulatory body within their line of business.

Continuation of the Estate Agents Fidelity Fund (“the EAFF”): The EAFF was established under the Old Act and will now be known as the Property Practitioners Fidelity Fund (“the PPFF”). It will continue to operate as if it were established by the Old Act with the purpose of reimbursing consumers who suffer financial loss by reason of theft of trust money committed by a property practitioner.

Prohibition on rendering services without a fidelity fund certificate (“certificate”): Under the Old Act, estate agents were also prohibited from practising without a certificate, however the rules are now more stringent due to the wide jurisdiction in the definition of a property practitioner.

The New Act provides that the following property practitioners must be in possession of a certificate: every director of a company; every member of a close corporation; every trustee of a trust; and every partner in a partnership.

A certificate may not be issued to the following persons:Non South African citizens and illegal residents in South Africa;persons who have in the preceding five years been fund guilty of contravening the New Act; persons who have been found guilty in any civil or criminal court proceedings; persons who have in the preceding five years by reason of improper conduct been dismissed from a position of trust; persons who are not in possession of a valid tax clearance certificate; persons who have been found guilty by any court or tribunal of unfairly discriminating anyone on the basis of race or gender; and persons who not in the possession of a valid BEE certificate. The PPRA may withdraw an issued certificate from anyone who has been issued with a certificate without having qualified.

Establish of the ombudsman: The Old Act does not provide for internal dispute resolution in the property market. The New Act establishes the office of the Ombudsman to consider and provide disposing mechanisms for complaints in respect of financing, marketing, managing, letting, hiring, and the sale and purchase of property.

Consumer protection: One of the ways in which the New Act protects consumers is by providing that a property practitioner must not accept a mandate unless the seller or lessor has provided both the property practitioner and the prospective purchaser with a fully signed mandatory disclosure form disclosing defects of deficiencies to the property. The disclosure form must be attached to the sale or lease agreement and will form a mandatory part of such agreement.

The New Act further provides that the PPRA must conduct campaigns to educate and inform the general public of their rights and the obligations of property practitioners’.

Transformation of the property market: The Old Act is silent on the Property Sector Transformation Charter (“the Charter”) whereas the New Act stipulates that the Charter applies to all property practitioners.  The Charter commits to strive for transformed property relations and recognises the administrative, legal and financial constraints that restrict the ability of previously disadvantaged groups from participating in the property market.

The New Act provides that all organs of state must utilise the services of property practitioners who comply with board-based black economic empowerment. The New Act enables the PPRA to establish a transformation fund as an incentive scheme to achieve transformation through financial support.

Effect of the New Act of the legal profession  

In conducting business, a legal practitioner interacts with property practitioners. The legal profession is not included in the definition of a “property practitioner” however the profession is indirectly affected by New Act as it is a stakeholder in the property market. As such, it is imperative for both legal practitioners and their clients to be aware of the changes and effects thereof that the New Act introduces.

The Property Practitioners Act


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