MAIN IMAGE: Thato Ramaili – PPRA CEO
Editor
It’s been relatively quiet on the HOA front over the last few months, although there were small wins, such as a few homeowners’ associations indicating that they would no longer charge estate agents fees (labelled marketing or otherwise). The PPRA investigated and fined several estate agents caught engaging in undesirable business practices, issued letters to offending HOAs, and remains committed to eradicating these undesirable business practices.
Overall, though, it was business as usual, with the bulk of HOAs continuing to levy fees and most agents illegally continuing to pay for access to operate within these estates.
The Gauteng High Court gets involved
That was until last week; on Tuesday, 8 October, the Residential Communities’ Council (RCC) and the Association of Residential Communities (ARC) filed a motion with the Gauteng High Court against the Minister of Human Settlements, the PPRA, and the NPPC, challenging regulation 35 of the Property Practitioners Act.
Essentially, the bodies representing HOAs want the court to issue an order declaring that charging estate agents fees to market and/or sell property within these estates does not constitute an undesirable business practice.
What does the Act say?
As per the Property Practitioners Act 22 of 2019, agents are not allowed to pay HOAs (Homeowner’s Associations) accreditation fees, the payment of which effectively excludes or disadvantages property practitioners not party to these arrangements from being able to provide services concerning properties in such property developments.
What does a judgement by the court stand to change?
Based on the documents submitted to the court, it would appear that the HOA representatives are asking for a ruling on whether or not they can legally charge estate agents fees, which they motivate by labelling it fees for training etc., to operate within gated estates. It is unclear how a positive result for the applicants would affect estate agents though. In essence, agents might be in the same predicament they are now.
On several occasions, PPRA CEO Thato Ramaili has reiterated the PPRA’s commitment to rooting out this practice, which is a) in direct contravention of the Act and b) counter-transformation. This implies that agents will continue to be fined for making payments to HOAs.
