Property Practitioners Bill Q&A

Question:
Are managing agents excluded from the definition from property practitioner and therefore not required to adhere to the provisions of the Bill?

Answer:
Managing agents are definitely included, in fact it is hard to find anyone in South Africa that is not included!

Question:
With reference to the requirement of a BEE certificate.  Would small agencies not be affected adversely?

Answer:
The Property Charter excludes all estate agencies with an annual turnover of R2,500,000 or less.  According to available information more than 80% of estate agencies have a turnover of less than R2,500,000 - most will not have to comply.

Question: Ombudsman
Will the Ombudsman address complaints from consumers and agents alike or is this just a protection measure in favour of consumers?

Answer:
The Ombudsman will only address complaints from consumers. Rebosa is requesting that the Ombudsman also be accessible to property practitioners to address conflicts with the Authority ( EAAB).

Question: Facilitator
Will the term “facilitator” extend to portals such as Prop24 and Private Property, meaning that they will need to hold a valid FFC or at least enforce advertisers on their portal to hold a valid FFC?

Answer:
The definition of a property practitioner is extremely wide and may well in its current formulation include property portals. This definition is unlikely to remain unchanged.

Question: Property Practitioner
Does this definition include a private individual who enters into a lease with another private individual or a property owning company that leases a commercial unit to a tenant?

Answer:
No it does not. A property practitioner acts “on behalf of another” person/entity.

Question: Indemnity Insurance
Will indemnity insurance be affordable?

Answer:
The indemnity insurance referred to in Section 39 will be paid for by the Authority – as is currently the case with the EAAB. As to the insurance in terms of Section 56 – it depends on what the minister prescribes.

Rebosa will object to Section 56

Question: Continuous Professional Development
Why is there no mention in the bill of CPD?

Answer:
CPD is addressed by way of regulation, currently the Regulation of 2008. The content, etc. will in future also be determined by regulation. Regulations are also published for comment before being enacted.

Question: BEE Certificate
A BEE certificate seems to be required, yet little is known of BEE requirements?

Answer:
The revised Property Charter has just been published and can be found on this portal. Compliance depends on turnover.

Question: Preferred Language
How will this work?

Answer:
It will be expensive/impractical, if not impossible to make documentation available in all South Africa’s official languages. This is problematic and Rebosa will object. It is not clear why this is requested of sellers/landlords, buyers/tenants are not necessarily the only “consumers” here.

Question:
With reference to the requirement of a BEE certificate. Would small agencies not be affected adversely?

Answer:
The Property Charter excludes all estate agencies with an annual turnover of R2,500,000 or less. According to available information more than 80% of estate agencies have a turnover of less than R2,500,000 - most will not have to comply.

Question:
Will attorneys with a turnover of more than R2.5 million per annum also be compelled to have a BEE certificate?

Answer:
Attorneys are exempted from the Bill, will not be issued with FFC’s by the Authority, do not have to comply with the terms of the Bill and are therefore not required to have a BEE certificate.
Rebosa proposes that this exemption be negated.

Question:
Are only attorney firms who have conveyancing departments (have a qualified conveyancer as a partner) entitled to transact as estate agents and be exempted from the Bill?

Answer:
All attorneys are exempted from the Bill.

Question:
Why does the Bill require estate agents to have BEE certificates when same does not apply to other industries in South Africa?

Answer:
A similar requirement exists in the Mining Charter but same is not comparable to the real estate industry. There are no other examples. The Rebosa perspective is that there is no justification from making an exception of the real estate industry in this regard.

Question:
Will everyone in the property industry have to hold a NQF4 qualification that is estate agents, bond originators, auctioneers, managing agents, etc.?

Answer:
In terms of the definition as it stands, yes. At the same time the Bill empowers the Minister to exclude individuals. The Minister therefore, in theory, could exclude all bond originators. The intention is not clear.

Question:
Would it not be better if the conveyancer insists on not only the FFC of the agent but also of the firm before paying commission?

Answer:
That makes sense but should the Rebosa proposal be accepted that commission be payable to a firm only, this section of course will be altered to read that the firm's FFC must be lodged before payment.