The Impact of the Property Practitioners Act, 22 of 2019

The Impact of the Property Practitioners Act, 22 of 2019

The Housing Consumer Protection Draft Bill

The Property Practitioners Act no. 22 of 2019 (the “Act”) was promulgated into law on the 19th September 2019 and is expected to become fully operational once the regulations have been Gazetted. This Act will completely repeal the Estate Agency Affairs Act 112 of 1976 and will replace the Estate Agency Affairs Board with the Property Practitioners Regulatory Authority and it is therefore important for all institutions affected by the Act to understand and comply with the formalities of the Act before its commencement date.

The Act purports to be an umbrella legislation governing a majority of role players in the property sector in order to form a universal system that will, amongst other things, regulate Property Practitioners, protect property consumers, and ultimately transform the property sector.

To achieve these objectives, the Act incorporates an extensive definition of the term “Property Practitioner” covering most of the role players in the property sector with but a few exclusions. Property Practitioners providing services relating to the marketing, promotion, managing, sale, letting, financing and purchase of immovable property, and any rights, obligations, interests, duties, or powers associated with, or relevant to, such property are subject to the provisions of the Act. This wide definition includes Homeowners’ Associations.

The Regulatory Authority will have much broader powers than the previous Estate Agency Affairs Board and will be empowered to give effect to the objectives of the Act by providing regulatory mechanisms for Property Practitioners and imposing penalties for non-compliance with the Act.

The Act requires, amongst other things, that Property Practitioners must have a valid Fidelity Fund Certificate to practise and, as a general rule, remuneration for services rendered will only be paid once the transfer of the property has been registered at the Deeds Office. Conveyancers are strictly prohibited from paying commission in the absence of a Valid Fidelity Fund Certificate.

Property Practitioners may not promote the use of any service provider to a client during any transaction which that Property Practitioner is involved in, and if this occurs the service provider is not eligible to any payment therefor.

Intern Estate Agents will now be known as Candidate Property Practitioners and may not draft or finalise documents relating to mandates, sales or lease agreements or service level agreements without supervision. If this is allowed by the principal there will be no right to claim payment for the transaction.

A seller or lessor of a property must complete a mandatory disclosure form which once disclosed to a prospective client and signed by each party, will become part of the sale or lease agreement. If no such form is completed the agreement will assume that no defects were disclosed. Nothing prevents a client from conducting a property inspection to confirm the state of the property.

Property Practitioners are urged to take cognisance of the Act and to seek legal advice in order to comply with the Act prior to the commencement date of the Act and Regulations.


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