10 things you need to know about The Property Practitioners Bill

10 things you need to know about The Property Practitioners Bill

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The provisions of the Bill are significant and far-reaching and will have a direct impact on how we operate in future, says REBOSA CEO, Jan le Roux. REBOSA has identified 10 key issues they are interrogating closely

1. Definitions:

The Bill endeavours to extend the classic definition of an estate agent to “property practitioner” thereby bringing into its fold potentially vast numbers. The proposed definition could include bank employees, bond originators and possibly even building caretakers. This is problematic because the EAAB is already facing challenges regulating the estate agency industry adequately. This wider definition will ensure that the EAAB (the authority in future) will be inundated and overwhelmed. The practicality and effectiveness of this in the consumers’ interest could be questioned.

2. Ombudsman:

The concept of an ombudsman who in turn can appoint a mediator is introduced in the Bill. This could be positive or negative, that is, a faster resolution of conflicts but vast powers with overlapping jurisdictions that have not been made clear.

3. Composition of the Board:

Currently estate agents can nominate and the Minister is obligated to appoint five out of 15 board members representing the real estate industry. In the new proposal the number of board members is reduced to a maximum of 12 and the Minister can and will appoint at least one person with knowledge of the industry. This prospect isn’t a promising one for the industry.

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4. Inspections:

In the aftermath of the Auction Alliance events the Bill endeavours to bestow on inspectors vast powers of inspection and the ability to seize documents and records.

5. Fidelity Fund:

The Bill proposes that consumers only be protected against the theft of trust funds from the trust account of a regular estate agent. This undoubtedly will affect the unsuspecting consumer negatively.

6. Fidelity Fund Certificates:

The current Act stipulates that an estate agent must have been “issued” with a Fidelity Fund Certificate in order to be able to earn commission. The new Bill refers to “possession”. This could lead to innumerable problems.

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7. Trust accounts:

Currently all estate agencies must have trust accounts albeit that most of these are dormant. The Bill alleviates this somewhat giving the Minister the authority to grant exemptions – it does not go far enough.

8. Registration:

Currently the EAAB allows non-executive directors to apply for exemption from qualification as principals. The Bill moves the goalpost right back to the start, that is, all directors of companies and members of closed corporations must be registered as principals and thereby be qualified to be principals.

9. tax clearance

The Bill requires all agents (not just agencies) to submit tax clearance certificates annually. This would swamp SARS and place an impossible burden on the authority. Agents in dispute with SARS about tax issues may not be able to resolve some in time and could thereby be refused registration.

10. BEE Certificates:

All agents not just agencies are obligated to submit BEE certificates. No conditions have been stipulated and this is problematic.

Words: Property Professional 

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