Opinion: Property Bill misses the point

Opinion: Property Bill misses the point

MAIN IMAGE: Jan le Roux, CE of Rebosa

 

Jan le Roux

The National Assembly unanimously passed the Property Practitioners Bill on Tuesday 4 December 2018.

The Bill, which will now go to the National Council of Provinces early next year, will ostensibly deliver transformation of the real estate industry before the 2019 general elections. Notably, it passed unanimously with opposition parties in support.

If the creation of a transformation fund and enforcement of the Property Charter was the solution, this might have worked.

Designations have been changed from estate agent to property practitioner and from Estate Agency Affairs Board to the “Authority”. The wide encompassing definitions ensure that anyone remotely associated with property transactions will be affected by the Bill, from mortgage originators (property finance) to property portals and property papers (advertising). This saddles the Authority with significantly more responsibility whilst it is already common cause that it breaks records in bad service delivery, not to mention ongoing IT challenges.

Unfortunately, property developers can still sell their properties to consumers without having to comply with the rules and regulations that all estate agents must comply with, and with their customers denied the protection the Fidelity Fund renders. Attorneys are still exempted to do what they have been doing lately, i.e. to employ staff and sell properties at “discounted” rates and most often benefit from the conveyancing derived therefrom.

Unsuspecting agents can still wake up finding their own Fidelity Fund Certificate (licence to trade) and that of the entire company cancelled because of a simple omission of one of the directors or principals – thereby forfeiting their commission for months.

Dormant trust accounts remain an expensive unnecessary requirement at huge expense, as does compulsory audits of business accounts (instead of more affordable audit reviews). As many as 4500 trust accounts out of 6000 may in this case be dormant. There is no motivation for all estate agents to have trust accounts.

More emphasis on ease of compliance, costs, efficiency of the Authority, streamlining of processes and focus would have gone a long way to promote transformation. New entrants to the industry, obviously mostly black in order to transform the industry, will still find it tough to get out of the starting blocks. The big national real estate groups with existing infrastructure and resources will benefit at the expense of new (black) entrants.

None of the political parties have any excuse for this mostly unfortunate event as they have been well advised in great detail as to the technical deficiencies, shortcomings and errors in the Bill. So much for a “critical” opposition.

However, some good has come out of it: The intention to focus on transformation is laudable and will be supported. Fidelity Fund Certificates will remain valid for three years. Conveyancers will be contravening the Bill should payment of commission be made to unregistered “property practitioners”. This will go a long way towards combatting the issue of illegal estate agents.

About the author: Jan le Roux is the Chief Executive of the NPC, Real Estate Business Owners of South Africa (Rebosa)

Editor’s note: This letter also appeared in BusinessDay and City Press

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