Good Day Colleagues
Over the past few weeks, we have held several meetings with the Acting CEO of the PPRA and her Executive Management team and I wish to bring your attention to the following important issues that you need to take careful consideration of.
I implore you to read this report in-depth in order to ensure compliance and avoid heavy penalties.
Many thanks and kind Regards
PPRA INSPECTIONS AND COMPLIANCE
Section 25(1) of the PP Act provides that an inspector may, at any reasonable time and without prior notice, conduct an inspection to determine whether the provisions of this Act is being or have been complied with, and for that purpose, may without a search warrant-
- enter and inspect any business premises, except private residence, of a property practitioner.
- require the property practitioner, manager, employee, or an agent of the practitioner to –
- produce to him or her the fidelity fund certificate of that property practitioner.
- produce to him or her any book, record or other document related to the inspection and in the possession or under the control of that property practitioner, manager, employee, or agent, or
- furnish him or her with such information in respect of the fidelity fund certificate, book, record, or other document at such plate and in such manner as the inspector may determine
- examine or make extracts from, or copies of, any such fidelity fund certificate, book record or other document.
The PPRA are currently carrying out these inspections and many of our members have been fined for violations up to the maximum amount allowed for in the Act.
Please take heed of the following:-
Section 67 of the Act prohibits property practitioners to accept mandates from sellers and lessors unless the prescribed mandatory disclosure form has been signed and supplied.
Members have been fined a maximum of R15000 for not using the “Mandatory Disclosure Form” verbatim as per the regulation.
We have approached the PPRA to re-consider maximum fines being imposed for slight and even superficial alterations of the ‘Mandatory Disclosure Form’ and to issue warning letters to first offenders and lower fines for minor infractions instead.
The PPRA will develop a new set of criteria to define lesser fines and provide us with a timeline.
Unfortunately, the position of the Authority is that there will be no retrospective reduction of fines already imposed. The current position of imposing the R15000 fine for non-compliance will remain in full force and effect until the Authority develops new criteria and guidelines for imposing fines.
We have also requested a moratorium on this issue to allow agents at least 30 days to get their affairs in order.
The Mandatory Disclosure Form can be found below. Please use this form in exactly the same format without any deviations to avoid being fined.
ARTICLE 65(2) – FRANCHISEES
Section 65 (2) of the PP Act determines that a franchisee property practitioner must disclose clearly and unambiguously in all written communication, advertising and marketing materials that he, she or it operates in terms of a franchise agreement, as well as the name of the franchisor.
It has come to our attention that Franchises are not displaying this information on all marketing material and specifically not on property portal advertising. This too carries a fine for non-compliance.
This is what is required by the PPRA:
“Property practitioners should display their legal names registered at CIPRO and not trade names to avoid public confusion and that of the franchisor and the fact she/he operates in terms of a franchise agreement, as well as the name of the franchisor”.
Example – First Realty (Pty) Ltd, a franchisee of Chas Everitt.
“A sole proprietor must use his/her name as it appears on his/her ID”
Example – Jan du Toit, a franchisee of Remax.
Disclosing the franchisee and franchisor on portals presents a technical problem. We have requested a moratorium to change advertising on the property portals and are also in consultation with Private Property and Property 24 to find a technical solution for this requirement.
PPRA are working on this with us and will issue a guidance notice to clear this matter.
They are also prepared to provide relief to franchisees who have been found in transgression and deal with each transgression on a case-by-case basis.
We have again requested a moratorium so agents have sufficient time to amend their marketing material. We will provide the notices as received by PPRA shortly.
FICA COMPLIANCE AND RMCP TEMPLATES
Following South Africa’s FATF grey listing, PPRA are scrutinising RMCP templates. Non-compliance also carries a hefty fine.
Rebosa sent its RMCP Guidelines developed by our attorneys to both PPRA and FIC for approval.
We are making amendments but until such time as we issue a template, property practitioners need to be mindful that it remains the responsibility of each estate agent to ensure that its own RMCP complies with FIC Act. Each firm is unique and must create and implement its own RMCP.
In terms of section 4(d) FIC have issued a guidance note which can also be followed and which is attached for your reference.
AUDIT COMPLIANCE: 2023 NEW ILLUSTRATIVE TRUST ACCOUNT AUDIT REPORTS
On 01 March 2023, the Independent Regulatory Board for Auditors (IRBA)’s Committee for Auditing Standards approved new illustrative reports to be used by auditors of business property practitioners when reporting to the Property Practitioners Regulatory Authority (PPRA) in terms of section 54(5)(b) of the Property Practitioners Act (PPA) and Regulation 2.4.4 of the Property Practitioners Regulations.
Read the full notice on Rebosa’s website by accessing the link below:-
SCHEDULE OF FEES
We notified the PPRA that the schedule of fees and fee increases was incorrect.
The PPRA agreed that there is no fee for changing employment according to the Act. FFCs should not reflect the name of the firm and therefore within the 3-year validity period of the FFC agents FFCs remain valid. The only onus on the Property Practitioner is to notify the Authority in writing of any change of circumstances within 14 days. See regulation 15.8.
“The holder of a fidelity fund certificate or a registration certificate, as the case may be, shall inform the Authority within fourteen (14) days of any change in the information supplied to the Authority at the time of applying for the issue to him/her of such certificate.”
We covered this issue in huge detail in our report of 3 April 2023. Please visit our site if you are still unsure.
THE EXTENSION DATE FOR ONLINE REGISTRATION FOR THE PROFESSIONAL DESIGNATION EXAMINATION IS SCHEDULED FOR 18 MAY 2023
As you are all aware, candidate property practitioners/interns who have been in the industry for more than 2 years and have not met the educational requirements by 30 June face disqualification.
Many interns enrolled for accelerated RPL courses and training service providers are now trying to exit students with SSETA in order for them to register for the 18 May exam – the last PDE exam date to become compliant.
We are working closely with the PPRA and they have granted an exam registration extension from 28 April to 8 May to allow for SSETA to complete External Moderations in time for students to write the exams.
We are also working with SSETA to fast-track the external moderation process.
We can assure you that we are doing everything to ensure as many interns as possible write the exam.
NEW REGISTRATION EXECUTIVE MANAGER AND FFC BACKLOG
Rebosa is extremely pleased with the appointment of the new Executive Manager: Licensing and Registrations, Ms Johlene Wasserman. Ms Wasserman is highly capable and Rebosa had its first meeting with her during her first week in office.
There is currently a backlog of 2500 FFCs which she had endeavoured to resolve within 3 months.
Rebosa can confirm that many of its queries are now receiving urgent attention with daily updates and many issues have already resolved.
Ms Wasserman held an introductory industry wide webinar on 21 April. If you missed the meeting you can access her presentation on our website by accessing the link below:-
A final discussion took place in March and the PPRA undertook to respond before the end of May to this pressing issue.
INTEREST ON TRUST ACCOUNTS
The PPRA undertook to re-examine the guidelines in this respect and communicate.
REBOSA BUSINESS LEADER (“RBL”)
RBL Bursaries are now open. All aspiring real estate entrepreneurs must apply directly on our website.
Read our testimonials on the application page to see how this programme has impacted the lives of many prospective new real estate business owners.