Dear Colleagues
Homeowners’ Associations (HOAs)
It is unfortunate that Home Owners Associations “HOAs”, are persistent in charging accreditation fees before allowing estate agents to operate within security estates.
This practice has clearly been outlawed in the regulations that became effective on the 1st of February two years ago.
HOAs in many instances have done away with the limited numbers, but do demand payment under the guise of “training, education and security” or whatever instead of “accreditation fees”. This however does not do away with the legal requirement.
Some HOAs even shot themselves in the foot by explaining that, should an agent manage to sell a property in such an estate without having complied with the rules and paying the required fees, a penalty fee applies before the clearance certificates would be issued to enable the transaction to go forward. It’s interesting to note that in such a case the agent in question clearly sold without the required “training, security clearance” etc. but still has pay. This proves that it is all about the income.
Is equally clear that the regulation does not leave room for any such discrimination. The most relevant regulation is 35.1.1.6 that reads “effectively provides an advantage to any one property practitioner or group of practitioners over and above any other property practitioners”. This means that anyone who cannot afford the fee is prejudiced.
It’s also important to note that this is viewed by the PPRA as a serious issue hindering transformation in the industry and one can rest assured that more stringent actions will be taken going forward. The PPRA has made it clear that for now, a R5000 penalty applies but that subsequently withdrawal of FFCs is on the table.
The unfortunate part is that it takes time and that only some agents participating in the schemes are being fined at the moment.
The HOAs do not want to see the practice being brought to an end and are ignoring the clear communications in this regard.
The only solution for Real Estate is to ensure that the practice is put to an end as fast as possible on a national level. That can be best achieved by reporting agents participating in such schemes on the Rebosa portal. This may sound harsh, but the alternative is having a number of agents penalised (could be any one of us) and the practice continuing for longer.
Many of us are opting for payment of the fees for this year and facing the penalty instead of being excluded. This is a strategy that might work for now but would certainly be extremely detrimental next year. It would be best if everyone could cooperate to bring an end to the practice as soon as possible, so as not to be faced with this impossible choice next year.
Many are asking why the HOAs are not forced to stop the practice, and the answer is very simple – unless an HOA acts as a property practitioner it does not have to register with the PPRA and therefore does not fall within the jurisdiction of the PP Act.
It is up to us to stop the practice in our own interest.
Below is a letter from the PPRA Acting CEO which can be sent to HOAs who requesting accreditation fees.
Admin Staff / Bookkeepers Holding FFCs
In a PPRA stakeholder webinar held on 12 December 2023 it was communicated that any person working in an estate agency firm with access to the trust account must hold an FFC.
Following a meeting held with PPRA’s Licensing and Legal department we are confident that the PPRA will soon communicate that only those who meet the definition of property practitioners in the Act and Regulations will have to register for FFCs and not necessarily everyone who for example has access to a trust account or operates a trust account on behalf of a registered property practitioner.
Exemptions: Regulation 41.17
When a business property practitioner has non-executive directors or has finance, marketing, information technology or human resource directors or any other director who is not directly concerned with the management and oversight of individual property practitioners, exemption should ordinarily be granted from the provisions of section 48 (1) (b) and 48 (2) in respect of such persons, upon application being made to the Authority.
The PPRA has confirmed that the following supporting documents need only be sent upon applying for exemption.
- E1 Form (Application for Exemption from Provisions of the Property Practitioners Act, 2019”);
- Certified Copy of ID (certification should not be older than 3 months);
- Board Resolution (a company board resolution indicating that the person is not involved in the management of the day-to-day running of the business as a property practitioner and description of their role/function e.g. Finance Director).
Application for exemption can be sent to: section4exemptions@theppra.org.za together with proof of payment of the fee of R3 630.
The exemption is then presented to the Exemption Committee for a resolution on granting or rejecting the application.
Commencement of the Real Estate Practical Training Course in Terms of the Property Practitioners Regulations, 2022
On 19 January the PPRA issued a communique to the industry in respect of practical training for estate agents which has caused huge confusion.
The PPRA has promised definitive guidelines later this year. We are pursuing the matter as the state of affairs is not acceptable.
FFC Backlog
Agents are reminded that they can invoke Section 49(3) of the PP Act if the Authority fails to issue FFCs within the required time frames.
Section 49 of the Act: Mandatory periods for issuing certificates.-
- The Authority must, within 30 working days, consider any application submitted to it in terms of this Act, which fully meets the prescribed requirements, unless the Authority, on good grounds in writing, informs the applicant of the reasons why that period is to be extended, provided that such extension may not exceed 20 working days.
- The period of 30 working days contemplated in subsection (1) commences afresh if the Authority requests the applicant to submit additional information or to correct the said application.
- If the Authority has failed to comply with subsection (1), the application is deemed to have been approved and the Authority must, upon written request by the applicant within 10 working days, issue the applicant with the relevant certificate.
It is important to demand the issuing of an FFC as per (3) above.
Demand Letters and Statement of Account
Property Practitioners have been receiving letters of demand for payment from PPRA. These demand letters do not indicate what these outstanding payments are for.
We have requested the PPRA send itemised statements of account and invoices to accompany these demand letters.
If you have received such demand without supporting documentation you can write to Maria Tolo on email: maria.tolo@theppra.org.za for an itemised statement of account and the respective invoices.
PDE Exams
The next PDE exam will be held on the 29th February 2024. The deadline for registration is 2nd February 2024.
CPD
Eligible practitioners for CPD in 2023 have been granted an extension of time until 31 March 2024 within which to fulfil their CPD requirements for 2023.
Before making any CPD-related payments, practitioners are advised to check the MYCPD portal and ensure the completion of their Personal Development Plans (PDPs).
Kind regards
Jan
