Please find below a comprehensive report which delves into matters of great importance and complexity. As you navigate through the report, we kindly ask for your careful attention and thorough reading, as the content holds significant implications for property practitioners. We are currently engaging the PPRA, Government and other stakeholders on many issues and you need to be empowered to make informed decisions on the issues that impact you directly.
We are currently faced with a high volume of queries on many of the issues raised in this report. As a not-for-profit organisation, the membership fees we receive from you are allocated to the resources required to interrogate legislation and protect your interests. We therefore appreciate your support in mitigating individual queries that have previously been addressed in detail in our reports and on our website.
You are advised to please visit our website rebosa.co.za regularly. All PPRA notices are published under “PPRA Notifications” and all the legislative issues we raise can be found in previous reports published under the “Rebosa Reports” tab. Queries can be logged using the online query forms on the site.
Please also understand that the PPRA are still on strike and therefore delayed responses can be expected.
Additionally, should you still require further clarification or have specific questions, then please do not hesitate to reach out to us.
INTEREST ON TRUST ACCOUNTS – CAUTIONARY
Section 32 of the Estate Agency Affairs Act determined that, allocatable interest earned on the general trust account of an estate agent and which was not subject to the terms of a written agreement between the parties to the transaction regulating the payment of such interest, had to be paid to the Fidelity Fund.
The EAAB in turn decided to share 50% of said interest with the estate agency concerned.
There is no similar clause in the now effective Property Practitioners Act. Last year the PPRA determined that all interest must be paid to the Fidelity fund without any percentage reverting to the estate agencies.
It is clear that the legislator intentionally removed this clause which means that the PPRA was acting in contravention of the Act.
We obtained a legal opinion from our lawyers, which you can read in the link below:-
We have highlighted the most pertinent sentences for your convenience.
We have provided PPRA with this legal opinion, and they in turn decided to approach the Minister to have the regulations amended, which we take as an admittance that their initial action was not lawful.
We advised them that amending the regulations per se will not address the issue, as it would still not be allowable in terms of the Act. We also pointed out that it would be illegal to take any action against property practitioners refusing to pay said interest to the Fidelity Fund.
Given the facts, we trust that you are now in a position to make an informed decision as to how you wish to address this issue as there are risks involved either way.
ARTICLE 65(2) OF THE PP ACT AND REGULATION 37.1 – FRANCHISES
In order to comply with the provisions of Section 65(2) of the PP Act the PPRA advised that all franchises must, in addition to all other legal requirements, indicate that it operates in terms of a franchise agreement and the legal name of the franchisor in all written communication, advertising and marketing materials:
“Franchisee of ABC (Pty) Ltd”
The trading name need not be repeated as it will be evident from the name of the franchise. The legal name of the franchisor is required.
PPRA will communicate to their inspectors to ensure that they check for the legal name of franchisor.
We have approached the PPRA for a moratorium of time for agents to comply but have not received feedback.
In terms of 37.1 the wording: “Registered with the PPRA” must also be displayed on all marketing material. We therefore suggest you incorporate this wording in your logo to ensure that all your adverts on the portal are adequately covered.
As an example, a by-line built into your logo could be displayed as follows: –
Franchisee of XYZ Properties (Pty) Ltd. Registered with the PPRA.
PPRA ILLEGAL/HISTORICAL PENALTIES
The PPRA continue to charge agents who left the industry and return years later, excessive and unwarranted penalties for not deregistering on the PPRA (previously EAAB) portal.
Contrary to a legal opinion supplied by ourselves to the PPRA, and contrary to the PPRA’s own legal opinion, the practice of charging agents’ exorbitant penalties after they have stopped trading, simply because they have forgotten or neglected to advise the PPRA of their intention not to renew their FFCs at a point in time, is unwarranted in terms of the PP Act.
We have been in constant communication and debate with PPRA (then EAAB) in this regard over a three-year period and have now, yet again, received written confirmation from the PPRA that they will continue with this practice regardless.
This unfortunately leaves us with no other option but to consider legal action once again, something we tried desperately to avoid.
We will update you on our approach in the next weeks.
DRAFT EMPLOYMENT EQUITY REGULATIONS 2023
The Department of Employment and Labour published the Draft Employment Equity Regulations 2023, for public commentary.
The new section 15A introduces sectoral numerical targets. The purpose of this addition is to ensure the equitable representation of people from designated groups (historically disadvantaged groups of people based on race, gender, and disability) at all occupational levels in the workforce. The amendment empowers the Minister of Employment and Labour (Minister) to identify national economic sectors for purposes of the administration of the EEA and set numerical targets for each such sector.
Please note this does not apply to firms who employ less than (50) fifty employees, regardless of turnover, consequently making them exempt from the targets.
Given the nature of our industry’s business models we have very few senior management representation, making these numerical targets impossible to achieve.
The National Property Practitioners Council (“NPPC”) Advocacy and Legislation Committee, of which Rebosa is a participant, has made a comprehensive submission to the Department.
We enclose for your interest an article written by Mr Francois Jordaan Internal Legal Advisor: Quality Time Marketing (a VOASA member organisation), which provides more context and which informed the NPPCs submission.
EXEMPTION TO OPERATE TRUST ACCOUNTS
It has come to our attention that many of our members, not wanting to operate trust accounts, simply closed those accounts without following the procedures clearly stipulated in Regulation 2.
You are strongly advised to scrutinise this regulation and pay heed at your earliest convenience.
Otherwise, you will most certainly make yourself liable to prosecution.
Please specifically refer to Clause 7 in the PPRA’s Guidelines on “Exemption from keeping a trust account” which can be found on Rebosa’s website.
The PPRA will send a trust account exemption letter from the email@example.com email address and your trust account exemption will be effective from the date on that letter and from that
date your auditor IS NOT REQUIRED to submit an audit report on the trust account. We have reservations about the legalities of this but advise that you adhere accordingly.
Queries in this regard can be sent to: –
Mr Thomas Makupo on email: Thomas.Makupo@theppra.org.za
A comprehensive list of Frequently Asked Questions (FAQs) on property practitioners’ audits and trust account exemptions published by the PPRA can be found on our website by accessing the link below:-
SUBMISSION OF AUDIT REPORTS
All business property practitioners whose annual revenue is below R 2,5 million and all business property practitioners who are in possession of a PPRA trust account exemption letter may have their financial statements independently reviewed instead of having a full audit.
The audited or independently-reviewed annual financial statements must only be submitted to the Authority when requested in writing and do not need to be submitted to the Authority on an annual basis.
PPRA SCHEDULE OF FEES
Rebosa has been engaging with the PPRA on the fee structure since it was first published. The fee increase was effective 1 April 2023. As mentioned in our last report there were inconsistencies and incorrect fees being charged. A revised fee structure was published on the PPRA portal on 15 May 2023; however, the fees are still incorrect and we await the PPRA to revert with the correct schedule.
Once received we will notify you and publish on our website.
UNDESIRABLE BUSINESS PRACTICES – HOME OWNERS ASSOCIATIONS
Agents are still participating in these practices with Home Owner Associations (HOAs) and paying accreditation fees for exclusive access to market and sell properties in these estates.
The PPRA have received several formal complaints and are now allocating these cases for investigation.
Agents who have been reported now risk being sanctioned for contravention of the Property Practitioners Act and risk having their FFCs revoked.
We urge our members to refrain from this practice to avoid being fined and possibly barred from practising as a property practitioner.
If you are aware of agents participating in this practice, a complaint form (attached) can be completed and sent to:-
Siyabonga Maseko – on email – firstname.lastname@example.org to allocate and obtain a case number.
We recently sent a communique on the Directive 6 – completion of the Risk and Compliance Return (“RCR”) Questionnaire.
Based on feedback we received, many members struggled answering the questions and the FIC system did not have functionality to recall questionnaires where agents realised they had made fundamental errors. We are addressing this with our counterparts at FIC and will get a determination from them on some redress if any.
Since South Africa’s FATF Greylisting, the need for industry compliance is crucial. Estate Agencies must develop, document, maintain and implement a risk management and compliance programme (RMCP) for anti-money laundering, and combating the financing of terrorism (AML/CTF). The RMCP must provide for all the requirements as set out in section 42 of the FIC Act.
FIC and PPRA are carrying out inspections in earnest to ensure industry is compliant and hefty fines will be imposed where non-compliance is determined.
STBB have revised our RMCP template with guidelines which is available on Rebosa’s website. Please do not send your RMCPs to Rebosa. They are to be retained by your Information Officers in your compliance files.
Documents can be accessed using the links below: –
GENERIC RMCP TEMPLATE FOR AGENCIES
GUIDANCE ON NOTE ON CUSTOMISING THE GENERIC RMPC
Please remember that each separate legal entity must register with FIC. Every estate agency needs to register with the FIC on the go-AML website by accessing the link below: –
MANDATORY DISCLOSURE FORMS
We have advised in an earlier report that the PPRA expect practitioners to use the mandatory disclosure form exactly as prescribed in the regulations. Any deviation, minor as it might be, unfortunately will be penalised. We are still in communication with PPRA in this regard as we do not agree with that view but you are advised to follow the letter of the law until further notice or face consequences.
The Mandatory Disclosure Form can be accessed below. Just complete as is. If you feel you need to add additional information then create addendums and attach them to the form but do not deviate from the prescribed version.
MANDATORY DISCLOSURE FORMS FOR RENTALS
Section 67(2) of the PP Act determines that mandatory disclosure forms must be provided by sellers and lessors as per the prescribed form.
The regulations however, prescribes a form only in respect of sellers and PPRA has subsequently determined in the Practice Note on mandatory disclosure forms that, as far as leases are concerned, property practitioners are to comply with the Act by referring to and inserting those disclosures in their lease agreements.
The PPRA CEO has confirmed in an email to Rebosa that inspections will not test/ inspect mandatory disclosure: rentals, due to the deficiencies of the regulation. However, a PP can adopt the one developed by REBOSA to comply with the Act.
The Rebosa Mandatory Disclosure Form for Rentals is enclosed below:-
CLARITY ON THE MANDATORY DISCLOSURE FORMS FOR RENTALS IRO RENTAL HOUSING ACT AND INGOING AND OUTGOING INSPECTIONS
We have received several queries in this regard and clarify the following.
Please be advised that the RHA inspection has nothing to do with the Mandatory Disclosure Form. The Mandatory Disclosure Form must be completed by the Landlord/Seller at the time of mandate. Ingoing and Outgoing inspections refers to Landlord and Tenant at the time of taking occupation and 3 days prior to vacating the property at the end of the lease agreement. The Mandatory Disclosure Form cannot replace the RHA inspection.
An infographic prepared by Clina Steyn – SSLR is enclosed below to assist.
NEW EDUCATION REGULATIONS
We are pleased to announce that the National Property Practitioners Council’s proposal for the new education qualifications for real estate in line with the PP Act, was adopted in principle by the PPRA in a final industry consultation held on 30 May 2023. The proposal was also endorsed by SSETA in alignment with QCTO requirements and protocols. This follows an 18-month process and we must applaud the NPPC Chairperson, Ms Vuyiswa Ramokgopa.
The journey towards establishing these standards has been an arduous and lengthy process, requiring meticulous attention to detail, extensive research, and collaborative effort. Throughout this endeavour, her leadership, unwavering determination to navigate complex challenges, foster consensus among diverse stakeholders, and uphold the highest standards of professionalism has played an indispensable role in ensuring the successful outcome we have achieved towards ensuring the development of a well-rounded qualification standards model for industry.
The PPRA will soon be issuing a notice on the next steps in the process.
REGISTRATION WITH THE INFORMATION REGULATOR
Public and Private bodies are required to register with the Information Regulator their Information Officers as outlined in section 55 of POPIA.
Who should be registered as an Information Officer?
Information Officers are, by virtue of their positions, appointed automatically in terms of PAIA and POPIA. Information Officers of public and private bodies must designate and/or delegate any power or duty to Deputy Information Officers, as necessary to make the body as accessible as reasonably possible.
Registering Information Officers
The Information Officers are required, in terms of Section 55(2) of POPIA, to take up their duties only after being registered with the Regulator. The registration of Information Officers can be done on the Regulator’s online Information Officer Portal.
https://registrations.inforegulator.org.za/login (Use the sign-up function)
PROMOTION OF ACCESS TO INFORMATION ACT – PAIA MANUALS
PAIA is a different set of legislation to FICA. This refers to the Promotion of Access to Information Act.
The Promotion of Access to Information Act (PAIA) requires all public and private bodies in South Africa to have a manual. Essentially, the manual explains to people how they can get access to the records held by the company.
The first step in this process is to register with the information regulator.
https://registrations.inforegulator.org.za/login (Use the sign-up function)
Kindly visit the Information Regulator’s website for guidelines, PAIA Manual Templates and Procedures
EXTENSION OF DEADLINE FOR THE SUBMISSION OF PAIA ANNUAL REPORTS
Due to the challenges with the online portal for submission of annual reports in terms of Section 32 and Section 83(4) of PAIA, the Information Regulator has extended the deadline for submission of Annual Reports for the 2022/2023 Financial Year, to 07 July 2023.
Accordingly, those Information Officers, heads of private bodies and/or Deputy Information Officers who have not submitted their annual report are requested to submit their report
through the following online portal- https://registrations.inforegulator.org.za/landing.
If you have nothing to report you are still required to make a nil return submission for the 2022/23 period.
Please note below instructions on how to submit your PAIA annual report:-
1. Create the profile, if you do not have a profile;
2. The system will send an OTP for security purposes. Please make sure that the correct
cellphone number is captured when creating the profile;
3. Log in onto the system using your email address and password created;
4. Select the PAIA Annual Reporting tab and complete the requested information; and
5. Once submitted, you will receive an email confirming your submission.
We have also included an infographic of this process for your ease of use below:-
REBOSA FIC/PAIA/POPIA WEBINAR
We submitted our RMCP template to both the PPRA and FIC for review. We have however been cautioned by both institutions that our template may only be used as a guideline to compile a compliant RMCP. The RMCP template MUST NOT BE USED AS IS. Practitioners MUST AMEND AND ADAPT it to suit the specific needs of their individual agencies, as required in the Financial Intelligence Centre Act.
We will in the next days be hosting a compliance webinar on a “step-by-step” guide on how to compile and develop your firms unique RMCP and how to complete your PAIA manuals.
We will provide the date of this webinar which will be hosted by Maryna Botha – Director – STBB who is an expert in this field.
In the interim, we attach a video link to the FIC compliance webinar recently hosted by Maryna Botha.
REBOSA BUSINESS LEADER (“RBL”)
Our first cohort of RBL bursary students have now completed the programme and we are immensely proud of their achievements.
The second cohort will commence on 26 July 2023. Applications for bursary candidates are still open and prospective students can apply on Rebosa’s website using the link below: –
SOUTH AFRICAN INSTITUTE OF VALUERS
Below, please find a letter addressed to Property Practitioners from the SAIV which is self-explanatory. Property Practitioners are to refrain from using the terminology “valuations/value” since Property Practitioners are not qualified valuers and instead use alternative terminology for example “comparative market analysis”.
Rebosa will hold its Annual General Meeting on Thursday 12 October 2023 in Johannesburg. Please save the date. Details will follow.
NEW PPRA EXECUTIVE MANAGEMENT
The following executive managers have recently been appointed at the PPRA.
Investigation and Enforcement
Executive Manager: Investigation & Enforcement
Mr Clarence Catin
T: 011 731 5712
Licensing and Registrations (FFCs)
Executive Manager: Licensing and Registrations
Ms Johlene Wasserman
T: 079 469 4730
Chief Information Officer
Mr Kamal Pillay