Editor
A few weeks ago, the PPRA provided a practice note informing property practitioners dealing with rental properties that they would need to create their own mandatory disclosure forms and apply for exemptions to use them.
The why and how of mandatory disclosure forms
PayProp explains the reason for the mandatory disclosure forms in their latest newsletter stating that the practice note seeks to address deficiencies identified in the implementation of Section 67 of the Property Practitioners Act read with Regulation 36.
Although the Act refers to “the seller or lessor of the property” and “a prospective purchaser or lessee of the property”, thereby including both property sales and rentals, the Regulations and its template mandatory disclosure form refer only to the sale of immovable property.
The legislator’s intention was also to reduce litigation in relation to the non-disclosure of property defects by the landlord and to ensure that the property practitioner assists the contracting parties by ensuring that all defects are not only declared but also documented properly. It is, therefore, imperative for rental agents to obtain a duly completed and signed mandatory disclosure form, which applies to the property rental sector, from a landlord before assisting in the rental of the property.
This mandatory form must disclose any defects in the property. It must then be provided to any prospective tenant before signing and attached to the lease agreement, as it forms an integral part of the agreement.
If such a disclosure form was not completed, signed or attached, the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the tenant.
The issue with the PPRA template
While the PPRA has created a template, it appears to contain certain legal oversights, and the PPRA itself is encouraging rental agents to create their own templates.
What must rental agents do now?
If you want something done well, do it yourself seems to be the directive. However, these forms can’t be used immediately. Once agents/agencies have created their mandatory disclosure forms, they must submit an Exemption Application form to the PPRA.
In a recent communiqué, STBB advises agents to complete and submit the form by incorporating the following:
On page 2 thereof, where the reason for the exemption must be indicated, include wording that states: (i) the sector in which you operate; (ii) that, in reliance on the PPRA Practice Note dated 28 September 2023, you apply for exemption from section 67 and regulation 36 of the PPA to make use of an amended Disclosure Form in transactions that you facilitate; (iii) that the amended Disclosure Form will not be used in transactions for the sale of residential property. It appears that the exemption application must be accompanied by your Fidelity Fund Certificate and Identity document or if making an application on behalf of an entity, the entity’s Fidelity Fund Certificate and a resolution authorising the applicant to act on behalf of the entity in making the application.
