Page 11 - Nexia SAB&T Property and Tax Guide 2024

THE PROPERTY PRACTITIONERS ACT

The Property Practitioners Act (22 of 2019) aims to regulate all property practitioners (not just estate agents),
including estate agents and agencies, property brokers, home inspectors, providers of bridging finance, bond brokers,
marketers, auctioneers, property managers, sellers of time share, developers, rental agents, home owner associations
(where a service is provided as intermediary primarily to sell/lease property in that home owner’s association), digital
portals that publicly exhibit properties, and employees of attorneys who act as estate agents. The Act specifically
excludes a person who does not carry out any of these functions in the ordinary course of business, and a natural
person who sells their own property (even if it is in the ordinary course of business), as well as attorneys, candidate
attorneys and the Sheriffs of the Court. The Act applies to the marketing, promotion, managing, sale, letting, financing
and purchase of immovable property. Some of its provisions include:
◆ The Property Practitioners Regulatory Authority (PPRA)
❖ The Estate Agency Affairs Board (EAAB) has been replaced by the PPRA, known as the Board of Authority,
which governs the property practitioners profession (not just estate agents). It is also required to conduct
campaigns to educate and inform the general public of their rights and the obligations of property
practitioners.
◆ Transformation of Property Sectors
❖ When procuring property related goods and services, all organs of state must utilise the services of
property practitioners who comply with the broad-based black economic empowerment and employment
equity legislation and policies.
❖ The PPRA must, within 6 months of its establishment, open a Property Sector Transformation Fund, into
which grants are paid- with the aim of benefiting previously disadvantaged individuals (small black-owned
property practitioners).
❖ The Board must also consult with the services SETA to develop special dispensation for training and
development of the historically disadvantaged.
❖ The Minister may prescribe measures to promote economic transformation by facilitating the accessibility
of finance for property ownership, development and investment in order to enable meaningful participation
of historically disadvantaged individuals including women, youth and the disabled.
❖ A purchaser/seller/tenant/lessor can request the agreement to be in any of South Africa’s official
languages, and this must be supplied by the seller.
◆ Exemptions in respect of accounting records and trust accounts
❖ These exemptions are introduced to assist transformation within the industry.
❖ Section 23 provides that a property practitioner, whose turnover is below R2.5 million, may not require an
audit, but must cause his, her or its accounting records to be subjected to an independent review by a
registered accountant, subject to the provisions of section 54(1)-(7) applied with the necessary changes.
All property practitioners whose turnover is above R2.5 million must cause their accounting records to be
audited within 6 months of their financial year end.
❖ The Minister may by notice in the Government Gazette, determine circumstances where a property
practitioner may be exempted from keeping trust accounts, and determine a different dispensation for
the review of the accounting records for those property practitioners. The Regulations state that a property
practitioner is exempted from keeping a trust account if he has never received any trust monies, or no
longer receives the same, and he submits an affidavit to this effect to the Board of Authority.
❖ A managing agent shall not be required to operate a trust account in respect of a body corporate where
the funds of that body corporate are held in a bank account opened in the name of the body corporate in
terms of Section 21(4)(a) of the Sectional Title’s Schemes Management Act (8 of 2011).
◆ Property Practitioners Fidelity Fund and Fidelity Fund Certificates
❖ The Estate Agents Fidelity Fund is now known as the Property Practitioners Fidelity Fund (PPFF). It has the
purpose of reimbursing consumers who suffer financial loss by reason of theft of trust money committed
by a property practitioner.
❖ Every property practitioner must have a valid Fidelity Fund Certificate, and is prohibited from rendering
services without it. He will not only be required to possess a valid Fidelity Fund Certificate, but also a Tax
Clearance Certificate, and a valid BEE Certificate.

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