Page 15 - Nexia SAB&T Property & Tax Guide 2022

PROPERTY DISCLOSURE REPORT: CONSUMER PROTECTION
While it has always been best practice for sellers to provide a property defects disclosure
document as part of the sale agreement, the Property Practitioners Act (22 of 2019), which
came into operation on 1 February 2022, makes this obligatory. The final Regulations, which
were published on 14 January 2022, provide the prescribed form for the report. It must be
signed by all relevant parties and forms an integral part of the agreement. The sale agreement
should expressly state which of the parties will be responsible for the costs incurred to correct
any defects listed in the report. A property practitioner must not accept a mandate unless
the seller has provided him with a fully signed mandatory disclosure, in the prescribed form.
The property practitioner must provide a copy of this form to any prospective purchaser who
intends to make an offer for the purchase of the property. Failure to comply may result in the
property practitioner being held liable by an affected consumer, and the Regulatory Authority
may take action against a property practitioner or impose an appropriate sanction.
THE FICA CLAUSE
Cash transactions and FICA:
The Financial Intelligence Centre Act (38 of 2001), as amended, provides that Accountable
institutions (AI’s), which include attorneys and estate agents, are required to file a report
with the Financial Intelligence Centre in regard to any cash transactions involving domestic
and foreign notes and coins, and travellers cheques above R25 000 or an aggregate thereof
(i.e. smaller amounts that when taken together at the same time amount to over R25 000).
Note that the South African Reserve Bank announced that cheques will not be supported by
the country’s national payment system from 1 January 2021. There is a proposal to increase
the prescribed limit to R50 000. In addition, the transferring attorney and the estate agent are
required to request certain documents from both the seller and the purchaser, in compliance
with FICA. If applicable, the bank, and the bank’s attorneys granting the bond will also require
documents, some of which are listed below:
Natural Person
◆ Identity document(s) and Income tax registration number (latest tax return submitted to
SARS and VAT number – where applicable)
◆ Proof: marital status:marriage certificate, antenuptial contract, divorce orders, consent
papers
◆ Either a utility bill (water or lights), or a levy account that is addressed to the natural
person at his or her residential address, not older than 3 months
Estate agent
◆ VAT details, income tax details of agency and agent involved in the transaction
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