Last chance for input on the Bill?

Feb 7, 2019 | Features, Local Property

Mashilo Pitjeng, as chairman of the policy and advisory committee of the South African Institute of Black Property Practitioners, has worked extensively on the Property Practitioners Bill.

“They also play in our industry. An attorney can wake up tomorrow and become an agent. It is not fair”

One of the key objectives of the Property Practitioners Bill is opening up South Africa’s property industry to property practitioners from previously disadvantaged groups – soon parliament will have to decide if it is the right legislation to bring this much needed change about. Mashilo Pitjeng, one of the key campaigners for such transformation, says he feels comfortable overall with the legislative framework created but there are still some lingering issues.

The Bill was unanimously adopted last year on 4 December by the National Assembly and now has to be deliberated upon by the National Council of Provinces. This week the provinces were briefed on the Bill. Last Tuesday 29 January the Department of Human Settlements (DHS) briefed the Select Committee on Social Services on the Bill.

During this briefing the critical need to replace the Estate Agency Affairs Act of 1976 was again emphasized. Besides the existing Act being out of sync with current market conditions, which has greatly evolved in the last four decades, black people (inclusive of all previously disadvantaged groups) are still largely marginalised within the property sector. Despite efforts to encourage transformation, only 5% of property principals are black.

DHS Deputy Minister Zoe Kota-Fredericks said although the current legislation is archaic and out of sync it is important to be confident when they pass the new legislation that it is the right legislation.

The slow pace of transformation in the property sector is a matter close to Pitjeng’s heart. As chairman of the policy and advisory committee of the South African Institute of Black Property Practitioners (SAIBPP), he has worked extensively on the Bill. He is also part of the Property Sector Charter Council research committee and managing director of Tsebo Real Asset Management.

In general, he says he is comfortable with the legislative framework created in the Bill but there are some lingering issues.

Pitjeng says improvements include a revisit made to the broad scope of the definition of a property practitioner and removing assessors from being included.

Secondly, Pitjeng approves that an entire chapter, Chapter 4, in the Bill is now dedicated to transformation where as before it was only a paragraph. This chapter provides for the establishment of the Property Sector Transformation Fund, exemptions in respect of keeping trust accounts as well as the establishment of a Property Research Centre.

However, the issue of other professionals such as lawyers and attorneys, even sometimes accountants also selling property warrants attention. The same regulatory requirements imposed on estate agents should apply to these he says. “They also play in our industry. An attorney can wake up tomorrow and become an agent. It is not fair,” Pitjeng says.

Also read: Property Bill could be law by next election

Pitjeng also advocates that the composition of the new regulatory body’s board should be structurally reconstituted so that the majority are property practitioners otherwise it will be just a rehash of the old. According to the current system the entire board of the Estate Agency Affairs Board (EAAB) is nominated by the DHS Minister. Pitjeng says this must change and the public should nominate the property practitioners to serve on the board of the new Property Practitioners Regulatory Authority (PPRA). There should also be representation from certain government departments such as the Department of Public Works. “I think that will make the Board much more effective,” says Pitjeng.

He also feels that the process should be simplified whereby the public can institute claims against the Fidelity Fund for damages suffered because of an estate agent. Pitjeng says the current system is too cumbersome. Also currently the onus rests with the customer to liaise with the agent they feel done in by to provide proof of their claim which could be uncomfortable for the customer. Pitjeng proposes that customers should have a body that they could direct their complaints to and who will then investigate the validity of these claims.

Making it easier for members of the public to apply for recourse against the Fidelity Fund was also brought up during the briefing to the Select Committee on Social Services. Other matters raised at the briefing included:

  • State assistance to black estate agents to have access to property on the market, for example the Department of Public Works could give preference to black estate agents when disposing of their property
  • More consumer education is needed to protect consumers from exploitation by for example unregistered estate agents
  • Addressing the high cost of registration as an estate agent – mentioned as a reason why some agents are unregistered

The last round of public hearings on the Property Practitioners Bill is scheduled to begin in the third week of February in all the provinces. The date of only one public hearing was made available so far, namely the one in Mpumalanga: Tuesday 12 February, 10:00-13:00, Kgotso Tsotetsi Lapa in Embalenhle (Govan Mbeki Local Municipality).

The public hearings are among the last opportunities for industry role players in the sector to give their input on this long-awaited and important piece of legislation. The National Council of Provinces will make final mandates on the Bill on 12 March.

The Select Committee on Social Services also invited interested parties to submit written comments on the Bill by no later than 12:00 on Friday 15 February. Enquiries, as well as written submissions, can be directed to: Ms Marcelle Williams, Select Committee on Social Services, Parliament of RSA, P.O. Box 15, Cape Town 8000 or e-mailed to: mawilliams@parliament.gov.za, tel. 021 403 3799 and cell: 083 709 8451.

What suggestions would you make towards the Bill? Email editor@propertyprofessional.co.za.