Get Qualified to Uphold Your Status & Avoid Disqualification

As per revised clarity notice on 30 June 2023 deadline on compliance with education regulations published by the PPRA.

Given the ongoing hurdles, we feel the pressure placed on you as a Practitioner, so let’s clear things up.

WHAT MAKES ME COMPLIANT?

If you hold Intern/Full Status, then to be compliant within the 24 month period, the following must be marked as competent:

  1. Internship Logbook
  2. NQF4
  3. PDE4

If you hold Principal Status, then to be compliant the following must be marked as competent:

  1. Internship Logbook
  2. NQF4
  3. PDE4
  4. NQF5
  5. PDE5 (within 24 months of holding Principal Status)

WHO IS THE COMPLIANCE DEADLINE FOR?

Candidate/Intern’s who have not complied within 24 months from their first FFC issue date.

Full status agents who have not been found competent in the NQF4 or PDE4.

Principal’s who have not been found competent in the NQF5 or PDE5.

Unless they have proof of exemption.

WHAT HAPPENS IF I AM NON-COMPLIANT?

If you were non-compliant on the 30th June 2023, then you will be disqualified and automatically blocked on the PPRA portal effective 03 July 2023. This means that you will not be issued with a further FFC when you wish to renew.

Your current FFC remains valid and you can continue to trade until it expires.

SO, HOW DO WE FIX THIS?

This is how you lift your disqualification block.

Submit your application within 60 days of disqualification, requesting an extension of 6 months within which you must become fully compliant. If you do this within 60 days there will be no penalty fee.

The application needs to be made by use of the affidavit which you can download here.

The affidavit must be accompanied with a letter signed by the applicant, together with supporting documents on how the applicant will ensure they will comply within the extended 6 month period.

The application must be submitted to [email protected]

When the PPRA receive the application, they will consider it, approve or reject it, and advise the applicant of the outcome within 30 days.

If the application is approved, the disqualification will be removed and a letter issued granting the extension of 6 months.

The applicant has this time period to become fully compliant.

If the application is declined, or if an application was never made, then the practitioner will remain blocked until they are compliant and have notified the PPRA of their compliance.

In such instance, and if the practitioners FFC has expired, the practitioner may apply to register as a candidate property practitioner for the respective sub-sector in terms of Regulation 33 of the PPA.

If the practitioner complied fully before their FFC expires, and within the 6 month period (from the date of disqualification letter) the block will be removed.

If you fail to apply within 60 days of being notified of your disqualification, and are still disqualified at your FFC expiry date, you will not be issued with a FFC at your current practicing status until you have fully complied and you will have to pay a penalty.

Practitioners who cannot comply with the extension process, or meet the education requirements, may, when their current FFC expires, apply for an FFC as a candidate practitioner and must then comply with the candidates education regulations.

Old and new terminology:

Intern Status – Candidate Property Practitioner

Full Status – Property Practitioner

Principal Status – Principal Property Practitioner

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Disclaimer: PropAcademy has prepared these notes to the best of their knowledge and have taken advice from various experts.  PropAcademy are indemnified against any misrepresentation or error that may occur herein.

Recognition of Prior Learning & ServiceSETA Rules & Regulations

How do I know that an ethical Accreditation Centre is representing me?

It is difficult to turn down a “cheap” course – how are you to know that there are providers in the industry selling cheap RPL courses to agents who do not qualify and cannot complete them?

Certain costs must be carried out when delivering a qualification.  Your course must be current with the legislation of that industry, and it must be assessed by an ETDP/SSETA accredited Assessor who must be paid to mark your assignments and liaise with you directly to ensure you understand how to present any remedial work.  Then the assessor hands over your competent portfolio to an accredited Moderator.  The moderator, in turn, must take a sample of learners from a group and then check that the assessor has assessed correctly and that the candidates’ answers are authentic, sufficient, valid and current.  Only then will SSETA confirm a visit to verify the group and pass certification.  This process costs money to be carried out efficiently and effectively.  Don’t be caught out!

Are there unethical Accreditation Centres and Providers in the marketplace that I must avoid?

In any industry, you will find stakeholders who want to cut corners to the detriment of the consumer.  Just ask the correct questions and ensure that the provider is an approved Accreditation Centre and has the backup to ensure your speedy certification.

What could be the repercussion if I use an unethical provider of an RPL qualification?

The most important repercussion is how it will affect your pocket in the long term and your compliance with the PPRA.  Often, candidates dump the course they have purchased and re-purchase through another provider to achieve compliance.  Be aware and ask questions.

What determines that I am eligible for RPL?

Recognition of Prior Learning is just that.  It can be recognised through experience, or it can be recognised through past qualifications, and the regulatory bodies determine these parameters.

You will comply if you have been a property practitioner for at least a year and have knowledge of the industry, proof of training and experience in various property market sectors. At our PropAcademy Assessment Centre, we supply you with an online quiz to give you a quick indication of what is required and then ask for evidence which we examine.

We ensure that you understand that RPL is a course where you will have to prove to the SSETA that you have been in the industry and understand the processes and requirements of a full-status property practitioner.  You will be asked to provide proof of contracts that you have completed and complete quizzes and assignments.  Because you are an RPL candidate, you don’t receive learner guides, but at PropAcademy, we throw those in case your memory needs reminding of a certain industry specialisation.  For example, you may be a rental agent and need to know more about sales.

How does RPL help me complete my course faster?

RPL does speed up the process. Because you are not “learning” the industry but only providing evidence that you understand the industry, the course can be done half the time.  Remembering, though, the assessment and certification process takes at least three to four months after you have been found compliant.

It must be noted that even though you may be eligible for RPL, you must follow the SAQA pre-requisite to complete RPL in that qualification.  If you are applying for NQF4, 59097 Real Estate, you must have mathematics and a second South African language at the matric level.  PropAcademy supplies easy bridging courses for both subjects.  If you apply for NQF5, 20188 Real Estate, the pre-requisite has an NQF4 59097 or exemption.

PPRA/EAAB Extension of the Education Requirements Compliance Deadline

New Deadline

The PPRA/EAAB has extended the deadline from 31 January 2023 to 30 June 2023. All candidates must meet this deadline as it will not be extended again.

Who is the deadline for?

When you receive your first FFC you must submit your Logbook within the first 12 months, and within a total of 24 months [from FFC issue date] you must be found competent in your NQF4 and your PDE4.

You will then need to comply with CPD the year following the year you received your PDE4 results.

If you then complete your NQF5 and registered as a Principal, you have 2 years in which to be found competent in your PDE5.

If you held Full/Principal status without completing the educational steps, then you need to confirm which courses you need to complete to comply with the deadline.

If you have not stuck to these timelines, then you will need to do so by 30 June 2023.

For a breakdown of the education process, download this free guide.

How to Become a Principal Property Practitioner

To become a principal property practitioner in South Africa and own your real estate firm, you must comply with the controlling regulatory authority, The Property Practitioners Regulatory Authority.  The PPRA was previously known as The Estate Agents Affairs Board, the EAAB.  The Property Practitioners Act No 22 of 2019 was promulgated in February 2022.  Agents/Practitioners are also governed by The Property Practitioners Code of Conduct.  Well, what does this all mean?  Let’s summarise “how to become a property practitioner” for you.

From Intern or Candidate Property Practitioner:

Terminology recently changed the naming of an intern agent to a candidate property practitioner.
The candidate practitioner enters the property industry in South Africa as an employee of an estate agency firm. They register with the PPRA and receive a Fidelity Fund Certificate.  No practitioner may trade as an estate agent or practice under an estate agency firm without an FFC.

Whilst trading under the candidate status, they require the assistance of a principal or non-principal practitioner in completing any documentation with a client. Once the candidate has received an FFC, they have a stipulated period within which to become qualified as Full Status, failing which their FFC is withdrawn, and they may no longer trade.  As of November 2022, this period is stipulated at two years.  During that period, they must complete their intern logbookNQF4 qualification and PDE4 exam. They will then achieve full status.

From Full Status or Non-Principal Property Practitioner:

A non-principal property practitioner must achieve principal status to open and manage an estate agency firm in South Africa.  How is this achieved?  There are typical scenarios which are broken down:

  • “I have only achieved full status – what are my next steps?”

You will have to complete the full qualification known as NQF5 Real Estate.  The full name of the qualification is National Certificate: Real Estate: 20188: NQF Level 5.  This is a five-month course and will take at least an additional three months for SSETA certification.

Once you achieve your NQF5 certification, you will receive a Principal FFC and have two years to pass your PDE5 exam, failing which your FFC will be rescinded.

  • “I am a full status/non-principal practitioner and have managed an estate agency firm under a principal practitioner – what are my next steps.”

This is a shorter process as you can complete your NQF5 through Recognition of Prior Learning, RPL.  The course will take up to three months and is a compilation of your work experience.  To qualify for RPL, you will be assessed by PropAcademy and must prove that you have managed an agency and can manage a trust account.

Exemptions apply to all facets of legislated education

  • Intern Logbook: A candidate may be exempt if he had traded as a practitioner for five years before 2013.
  • PDE4 & PDE5: If you were a practitioner for five consecutive years before 2008, you would be exempt from the exam level stipulated on the FFC you held at that time.
  • NQF4 & NQF5: Always check the PPRA website to see what diplomas, degrees, and NQF credits may exempt you from completing these qualifications.

How can I open my agency before obtaining my required principal status is a common question?

This can only be overcome if you employ a Principal Practitioner to manage the firm while obtaining your qualifications.

You will also have to open your entity to manage your agency.  Your accountant or auditor will probably complete this process, investigate the PPRA’s requirements, open the firm with CIPC and adhere to the normal SARS protocols.

Who needs a Fidelity Fund Certificate (FFC)

Any person facilitating or providing a service in the sale or lease of property in any way and does not use the services of a property practitioner must hold a Fidelity Fund Certificate (FFC) through the Property Practitioners Regulatory Authority (PPRA) formally known as the EAAB. Business undertakings shall include any activity, whether sold as a whole or going concern, or as part of a business, or by means of transferring the beneficial ownership.

“A property practitioner is any person who, for the acquisition of gain, directly or indirectly, on the instructions or on behalf of another:

  • sells, purchases, manages or publicly exhibits for sale any property or business undertaking;
  • leases or hires or publicly exhibits for hire any property or business undertaking;
  • collects or receives money payable for a lease;
  • provides, procures, facilitates, secures or otherwise obtains or markets financing for or in connection with the management, sale or lease of a property or business undertaking; and
  • renders services as an intermediary to affect the conclusion of an agreement to sell or let a property or business undertaking (except where this is not done in the ordinary course of the person’s business; where a natural person does it in their capacity, or where the person is an attorney, candidate attorney or sheriff).

Thus, the definition extends well beyond estate agents. It includes:

  • Auctioneers
  • Property developers (not natural persons selling their own property)
  • Property managers
  • Franchisees
  • Providers of bridging finance and bond brokers fall under this ambit but have applied for exemption.  Financial institutions are not included as they are covered under their Act.

Anyone who falls within the ambit of the definition of a “property practitioner” is required under the Property Practitioners Act no. 22 of 2019 to register as a property practitioner and obtain a certificate issued by the Fidelity Fund on an annual basis. Refer to Section 47(1) of the Act. Conveyancers are prohibited from paying any money to a property practitioner without receiving a copy of that property practitioner’s valid Fidelity Fund certificate.

Note: The PPA will not apply to the following persons who do not do any of the above-listed activities in the ordinary course of their business;

  • Persons who sell their property
  • An attorney
  • A candidate attorney
  • A sheriff.”

Often the question of an “administrator” pops up – why should they need a FFC if they do not deal directly with the public?  They don’t. Why do they need a FFC if they are drafting lease or sale agreements? They don’t, as long as they are not signatory to the contract, and it is being overseen by the practitioner that they drafted it for.   But if they are dealing with the public’s money or with the agency trust account then they will need an FFC.

Another question arises mainly from Managing Agency firms – why do my administrators have to become fully qualified property practitioners and hold an FFC?  Well, the same applies.  If they are not dealing directly with the public, if they are not dealing with the Trust Account then they do not need an FFC as they are performing a purely administrative function.

The PPRA FFC Renewal Process Explained

We know that there are still some of you battling to renew your FFC, so we have decided to share some tips to help you out. Please note the contents of this article has been extracted from this PPRA Notice.

Important Tips

  • The cut-off date to renew your 2023 FFC is 31 Oct 2022
  • Your renewal is paid for 3 years in advance
  • There is no payment plan allowed for with regards to the renewals
  • Principal renewals have to be applied and paid for first
  • Agencies do not have to pay for renewals but still need to renew via the PPRA portal.
    The firm or business practitioner on longer pays any FFC fees as a result of the legislation which provides that only natural persons pay for FFCs.
  • Following this, all other Property Practitioners can renew
  • There is no provision in any legislation or policy which allows the practitioner to get a refund should they leave the industry during the renew period paid for

When you renew, remember

  • You must use your correct 7-digit ref number
  • You need to renew on your PPRA portal “Renew individual FFC”
  • You will then be issued an automated invoice giving you the correct amount payable
  • Pay your invoice and PDF the Proof of Payment
  • Download and complete your application form [PPRA Individual FFC Application Form]
  • Click here for a link to the PPRA, and scroll down for the application form
  • Upload these documents [POP & Application form] onto your PPRA portal, Log a query, FFC enquiry

To watch a Property Practitioner renewal

Now it’s time to pay for your renewal

  • For access to the PPRA Fees click here
  • Current Candidate [Intern] for less than 24 months = R1540
  • Current Candidate [Intern] for more than 24 months = R2340
  • Current Non-Principal [Property practitioner | Full Status] = R2340
  • Current Principal =  R2340

If you don’t renew in time you will be penalised R125 per month.

The Path to Certification: REIS Panel Discussion 2022

The Property Practitioners Act No22 of 2019 is the law from 1st February 2022.   Whenever there is a change in legislation, clarification is needed.

Listen to this 40-minute discussion to understand how agents must comply during the change from the old to the new Acts and how the new Act affects developers, Homeowner Associations and Property Practitioners.

REIS PPA Roundtable

The experts include Janet Alexander, CEO PropAcademy / Mfundo Daki, HOD Education Property Practitioners Regulatory Authority PPRA / and Sean Theunnissen, CEO Property Point.

EAAB: Agents need to comply with education regulations or be disqualified

MAIN IMAGE: Courtney McKenna, operations manager of PropAcademy; Jan le Roux, CE of Rebosa

A policy approved by the EAAB applicable to interns, non-principal or principal estate agents, has granted an extension of a time frame within which they can ensure compliance with the board’s education regulations.

The EAAB’s practise notice (ETD01/2020) states that these regulations do not apply to persons who want to enter the estate agency sector for the first time or to persons who have never previously applied for, or been issued with, a valid Fidelity Fund Certificate (FFC) by the EAAB. By law estate agents are required to have a valid FFC issued by the EAAB for them to practice.

The notice is applicable to estate agents holding full status FFC’s despite having failed to comply with the requirements of the standard of training of estate agents.

“The  extension is welcome and a deadline  for interns very necessary. It will, however, be impossible for the EAAB to cope with the  increased volumes as it is not coping at present “, says Jan le Roux, CE of Rebosa.

Interns

In the case of interns, the notice is applicable to persons who have continuously been registered as intern estate agents for a period exceeding twenty-four months. They are granted time until 30 June 2022 to submit a completed intern logbook to the EAAB, duly signed off by both the intern agent and the principal or qualifying mentor estate agent. This will serve to assess if the intern was initially issued with an intern FFC during 2013. Alternatively, the intern can submit a letter from a principal of the estate agency where the intern estate agent served the internship to confirm the successful completion of the twelve-month internship period.

The intern should also be certificated against the NQF Level 4 real estate qualification and have passed the PDE 4. Interns who fail to comply with these regulations by 30 June 2022 will be ipso facto rendered disqualified in terms of the Act.

In the case of intern estate agents who have not passed the PDE within two years after having been certified against the NQF Level 4 real estate qualification, are granted until 30 June 2022 to enrol for and pass the PDE 4. Failure to pass will lead to disqualification.

Estate agents

Registered full status non-principal estate agents who have not been certified against the NQF level 4 real estate qualification or who have not passed the PDE45 but who hold a valid FFC, also have until 30 June 2022 to be certificated against the NQF Level 4 real estate qualification and to pass the PDE. If they fail to do so by 30 June 2022, they will be ipso facto rendered disqualified.

Principals

The same regulation applies to registered full status principal estate agents holding a valid FFC but who have not been verified against NQF level 5 real estate qualification or who have not yet passed PDE 5 while failure to comply will also lead to ipso facto disqualified.

Consequences

The consequences of being rendered disqualified in terms of the act, will lead to the person being blocked and unable to renew their FFCs for 2022 or any ensuing calendar years and pay an administrative penalty of R1000.00. The penalty must be paid before any further FFCs will be issued to them.

Agents in these situations can apply to the EAAB under the proviso to section 27 of the Act, for the issue of an FFC for the 2022 calendar year if they can convince the board that it will be in the interest of justice to issue the FFC. This application must be lodged with the EAAB within a period of sixty days after the person concerned is notified of the disqualification. Failure will render the person disqualified.

A disqualified estate agent will remain blocked until:

  • The EAAB has received a substantive application from the applicant in the form of an affidavit, together with all supporting documents necessary or required to enable the application to be duly considered, in which the applicant provides sound and valid reasons as to why the issue of a FFC will be in the interest of justice and
  • the application has been duly considered and approved.

On approval, the estate agent may be unblocked and granted a maximum further six months, calculated from the date of the unblocking of the application, within which to comply with any outstanding educational requirements in terms of the education regulations. No further extensions of time will be granted to the applicant estate agent.

Failure by an applicant to comply with any outstanding educational requirements in terms of these education regulations within the set period, will render that estate agent ipso facto deregistered as an estate agent.

Estate agents who have been deregistered by the EAAB, may reregister, but only in the capacity of an intern estate agent. They will be required to comply with all the requirements pertaining to an intern estate agent. This Practice Note came into effect on 1 July 2021.

Courtney McKenna, operations manager of PropAcademy, an accredited provider of regulated estate agents’ qualifications, education and an RPL assessment centre, welcomes this Practice Notice with open arms and says it is way overdue and will professionalise the industry.

“The EAAB legislated education some 13 years ago but they never fully implemented their checking policies to police this process, resulting in property practitioners trading as full status or principal status agent as reflected on their fidelity fund certificate, where in fact they have not complied with education requirements and intern agents remaining at that status for years past the cut-off date.

“Part of the reason that property practitioners have not complied with education can be put down to their complacency with the Board. The Board’s administrative systems have been unable to issue FFCs timeously, unable to produce regulated CPD courses timeously and the question is asked: “how will they be able to monitor my education status?”

McKenna says all property practitioners must be compliant by end of June 2022 which is going to be a hard task for some. However, there is relief in recognition of prior learning (RPL), where agents will be able to fast-track their learning, terms and conditions apply.

Written by
Danie Keet (Property Professional)

How to Start Your Own Estate Agency

How to start my own estate agency

Wanting to open your own estate agency firm?

Follow these steps to ensure that you are compliant with regulations:

  1. Principal Property Practitioner

Every estate agency firm must have a principal.  A principal property practitioner is an estate agent who has completed his 12-month internship, his NQF4, his PDE4, his NQF5.  He then has 2 years to complete his PDE5 exam whilst trading as a principal estate agent.  His fidelity fund certificate (FFC) clearly states “Principal Estate Agent”.

If you are a newcomer to the industry and believe that you will be found exempt from your NQF4 and NQF5 qualifications, you will still be obliged to complete your 12-month internship and write both your PDE4 and PDE5 exams.

If you need to know more about the Estate Agents Affairs Board (EAAB) education regulations, please read our free easy-to-follow download.

The principal property practitioner is solely liable for any misrepresentation or non-compliance of the firm and of all agents employed by the firm.

  1. Estate Agency Entity

You will need a vehicle within which to run your business and this can be done in the form of a Sole Proprietorship or a Pty Ltd company.  If you have a shelf Close Corporate (cc) you could use that but cc’s are no longer allowed to be formed in South Africa.

We suggest that you discuss the requirements of your entity with your accountant to find the best option for your application.  If you are including business partners as shareholders, it would be best to open a company to house this.

You must let your accountant know that the name of the business must be approved by the EAAB prior to reserving it with CIPC.  To reserve your name with the Board click “reserve a new agency name” on their website.

  1. Bank Accounts

The EAAB regulates that you must open a Trust Account which must be correctly designated in accordance with The Estate Agents Affairs Act.  This means that the name of the bank account must reflect:  “Name of Business t/a Trading Name Trust Account in accordance with The Estate Agents Affairs Act 117 of 1976”.  If this is not reflected, you will incur a penalty and be sanctioned.  As we all know, Trust Accounts must balance to the cent daily, and are used to house the public’s money which consists of deposits on sales/rentals and any other money the estate agency may want to hold pending a lease or sale being concluded.  Most estate agency firms include a clause in their contracts stating that the monies will be held in the attorney’s trust account.

When a client pays monies into the estate agency current account, the monies being held on behalf of the client must be immediately transferred to a trust account, failing which the estate agency will be sanctioned.

You must also open a current account and may also want to hold a credit card.

  1. EAAB Registration Compliance

All property practitioners employed by your firm, all directors, principal agent and the firm itself must register with the Board, obtain FFC’s and comply.  Trading may not occur without FFC’s being issued and displayed in the registered office of the business. Any person in the agency who is liaising with buyers/sellers/tenants/landlords and discussing property/finance matters must hold a valid current FFC.

If the firm is not compliant in any manner, then all the agents are not compliant and all FFC’s will be disqualified.  If an agent in the firm is not compliant then the firm is not compliant.

To register the following applies:

  • Firm: Application form, proof of payment of registration fee, CIPC documents, directors information, letter from bank stating that the Trust Account is open and correctly designated
  • Estate Agents: Must all be registered and comply. Required application form, proof of payment of registration fee, ID, letter of employment at firm signed by Principal.
  • Directors: Must all be registered as estate agents and comply with the Boards requirements;
  • Shareholders: Do not have to register as an estate agent.
  • Non-Executive Directors: Must register as estate agents but do not have to comply with the Boards education requirements. These directors are not involved with the firms Trust Account, Estate Agents or the Public.  They could be investors in the business or involved in aspects of the business other than property, ie HR.

Registration requirements may change, and it is best to find these requirements on the Boards website.

Audits

The EAAB inspector randomly audits estate agencies to check their compliance in the following:
Financial: Audit of trust account to be submitted 4 months from date of year end
Interest on deposits: in Trust account to be allocated according to regulation
Contracts of sale and lease: to be contained on file with all FICA requirements and FICA reporting system
Agents: Education compliance
The following must be displayed in your registered office:  EAAB Code of Conduct, Property Practitioners Act, Fica Reporting Officer, FFC’s of all agents and directors and firm

PropAcademy sell an easy to follow course, Pre Audit Evaluations which detailing all EAAB compliance requirements.

Policies and Procedures

It is advised that all estate agencies hold a Company Policy Document covering all aspects of their agency.

Contracts

It is advisable that you obtain the contracts that you need to run your business from a property attorney.

Differences Between the Old and the New Property Practitioners Act Summarised

The New Property Practitioners Act for Estate Agents

The new Property Practitioners Act No. 22 of 2019 replaces The Estate Agency Affairs Act 112 of 1976.

All property practitioners must read both The Property Practitioners Act No. 22 of 2019 and, in particular, Regulations 33 and 34. This summary refers to certain clauses in Regulation 33. Clauses that have not changed from the previous Act are not referred to. The clauses referred to must be read in context with the summarised explanation.

New terminology:

Estate Agency Affairs Act 112 of 1976 Property Practitioners Act No. 22 of 2019
Intern Estate Agent Candidate Property Practitioner
Full Status Agent Property Practitioner
Principal Estate Agent Principal Property Practitioner
Estate Agency Affairs Board The Board of Authority (which embodies the Property Practitioners Regulatory Authority)
EAAB PPRA

The Act has repealed the Estate Agency Affairs Act 112 of 1976 (EAA Act). It did so to achieve three primary objectives:

  • to address the slow transformation in the property sector
  • to integrate and consolidate all role-players within the property sector under one umbrella statute and
  • to address the deficiencies of largely ineffective monitoring of estate agency matters and protecting consumers and their trust funds.

The Authority has far-reaching enforcement powers, and among other things, it is required to:

  • ensure compliance with the Act
  • to regulate the conduct of property practitioners
  • to implement measures to transform the property sector
  • and to conduct campaigns to educate property practitioners and consumers.
It must be noted that the PPRA will phase in the various changes communicated to all property practitioners. Clause 33.2.9.2 refers to:

The Authority may, in good faith, conduct consultation with industry representative bodies to establish transitional provisions for the phasing in some or all of the provisions of this regulation 33.We refer to the PPAct in relation to all the questions regarding the educational (and other aspects) that have been published previously in regulations under the ‘old’ Act:

S75(6) states very clearly and in no uncertain terms:

“All regulations made in terms of the Estate Agency Affairs Act remain in full force and effect as if they had been made in terms of or under this Act.”

Chapter 1: Definitions, Applications and Exemptions

Clause 2: Trust Accounts
A practitioner may apply for exemption from holding a Trust Account if they have never received or no longer receive trust monies.

Chapter 2: Transformation and Regularisation

Clause 3:

  • A Property Sector Transformation Fund will be formed. Please read Schedule 3, Cl 43, which states that the Fidelity Fund will supply the funding for this fund; conditions apply.
  • 75% of the bursaries will be distributed to this fund. The Authority will develop the distribution guidelines.
  • Regularisation: Note Cl. 3.4.2, which provides that a person who failed to register as an “estate agent” under the previous Act or failed to obtain a Fidelity Fund certificate under the previous Act when they were required to do so shall not be subject to prosecution or any disciplinary action in respect of such failure by the Authority provided that such person registers with the Authority within no more than six months of the effective date and subsequently obtains a Fidelity Fund certificate under the provisions of the Act and these regulations within no more than 12 months following the date upon which such person registers with the Authority.
  • Clause 41.42 deals with this in more detail.
  • 5% of grants will be spent on Consumer Education.

Chapter 3: Compliance, Enforcement and Dispute Resolution

Procedures are explained.

Chapter 4: Fees and the Fidelity Fund

Fee claims are explained with a maximum pay-out set at R2m. Please take the latest fee schedule from the PPRA website, as they may alter them as required.

Clause 15:

  • Every property practitioner who is a natural person shall, upon first becoming registered as a property practitioner, pay the Property Practitioners Fidelity Fund (“the Fidelity Fund”) a contribution of R
  • Every property practitioner who is a natural person shall, as of the calendar year 2020, pay the Authority a levy of R 2 340 set for three years or, if permitted by the Authority, pay R780 per
  • As defined in the Act, a candidate property practitioner shall pay R380 each year of their candidacy The candidacy period has exceeded two years. The candidate property practitioner shall pay the same levy applicable to every property practitioner mentioned in 15.1.1 or 15.1.2.

Chapter 5: Fidelity Fund Certificates

Procedures, penalties and deadlines are explained:

  • Renewals to be affected by no later than 31 October of that year, the practitioner must apply to the Authority for the issue of a fidelity fund

Clause 25.2: “Subject to any express provision to the contrary in the Act or these regulations, no person  who does not directly carry out to any material degree any activity or function of a “property practitioner” as defined in section 1 of the Act is required to register with the Authority or hold a Fidelity Fund certificate, even though such person may be employed       by or in any way be engaged with any property practitioner.”

An easy example could be an administrator or an accountant in a property management team or providing support services within a brokerage. Also, a technical manager in a property management team. Such roles are essential to the success of the property management or brokerage business. Still, those individuals do not, to a material degree, perform the functions contemplated in the definition of a property practitioner.

Conversely, the property manager who is responsible for all the roles/functions within the property management team materially performs the role defined in the definition of a property practitioner and will definitely require an FFC.

Similarly, the agents/brokers who negotiate and facilitate transactions will require an FFC, but their support admin staff will not.

Clause 26 states that FFCs will display the category of real estate in which you are competent. The Authority will determine the different categories. FFCs will be industry specific.

Clause 22: FORMAT OF FIDELITY FUND CERTIFICATE

Pursuant to section 47 (3) of the Act, it is prescribed that the form of a Fidelity Fund certificate will be as follows –

FIDELITY FUND CERTIFICATE

issued under the provisions of the Property Practitioners Act 22 of 2019

[Insert logo of the authority]

Property Practitioners Regulatory Authority Valid from date of issue to 31 December of the

undermentioned year

Holder:                                                                                   [insert the year at the end of which the fidelity fund certificate will expire]

[Insert the full name of the holder of the fidelity fund certificate]

 

[Insert the geographical address of the holder ofDate of issue:

the fidelity fund certificate]                                                [insert the date of issue]

 

Certificate number:

(Insert the number of the certificate)                              ______________________________

                                                                  The Property Practitioners Regulatory Authority

Industry:

(Insert e.g. “estate agency industry”, “business broking industry”, “bond broking industry” or similar)

Chapter 6: Trust Account

Requirements, declaration of interest, and winding up are discussed.

Chapter 7: Training, conduct and consumer protection measures.

Clause 33.2: PDE – The Authority is mandated to establish an exam after consulting with representative bodies.

Clause 33.2.3 – No person can write this PDE exam unless they have completed the set practical training course, which will contain a minimum of 6 modules over a minimum of 6 months (NQF).

Read this with the provisions of Cl. 33.1.2, 33.1.33 and Cl.41 (exemptions).

Clause 33.2.8: If you leave the industry for more than five years, you must take the required qualification on your return.

Clause 33.2.9.2: The Authority may, in good faith, conduct consultation with industry representative bodies to establish transitional provisions for the phasing in of some or all of the provisions of this regulation 33.

Clause 33.3: Further restrictions – Once qualified, a principal must oversee your documents for a further six months.

Clause 33.4: Candidate Estate Agent – On registration, you are a candidate estate agent and must act under the supervision of a fully qualified agent or principal. Candidate practitioners have 180 days (6 months) to become fully qualified.

Clause 33.5: CPD – 12 modules over a three-year rolling cycle, completing four per annum.

Clause 34: Code of Conduct – The Authority will implement a new code. We note here what we believe to be changed to the existing Code of Conduct.

Clause 34.2.1.3: A practitioner may not accept a mandate if the performance of the mandate requires specialised skill or knowledge for which they are not qualified.

Clause 35.1: Franchisee must adhere to the franchisor’ contractual requirements.

Clause 35.1.1.2: Property developers, including their Homeowners Associations or body Corporates, may not restrict access to certain property practitioners.

Clause 36:

Mandatory Disclosure – Defects must be fully disclosed to the purchaser by the agent on the owner’s behalf.

Provision of additional information – the owner, must complete the disclosure form, and should he respond with a “yes”, he must explain the status of that defect.

A document, “Statements in connection with Property,” is supplied, which must be adapted and attached to the contract. Other documents include a form that the owner signs certifying that the information supplied is correct and that the third person supplying the information completes, certifying that they are duly authorised. Finally, a buyer’s acknowledgement must be completed and signed.

Clause37:

Wording on letterheads agreements, letterheads and marketing documents must include “Registered with the PPRA”. A candidate is using or referring to the document; it must be stated that they are a candidate.

All contracts must contain the wording: “I, (name of agent), hereby warrant the validity of my FFC as at the date of signature on this agreement”.

Chapter 8: Administrative and other matters

Clause 38: The distinction between major and minor contraventions is detailed.

Clause 39.1.1: Identifies a Property Practitioner by the following services:

  • the sale, by auction or otherwise, by any person as part of the activities of operating a property development business, of any property or any interest, right or title in or to a property or a property development, provided that the foregoing shall not apply in circumstances where such sale, auction or other activity is conducted solely through the auspices of a property practitioner falling within subsection (a) (i) of the definition of “property practitioner” who is the holder of a current fidelity fund certificate issued under the provisions of the Act; and
  • An activity falling within subparagraphs (i), (ii), (iii) of paragraph (a) of the definition of “property practitioner” in the Act insofar as it pertains to business undertakings shall include any activity that relates to small, micro and medium enterprises, franchised businesses or new start-up ventures or newly created franchise concepts, whether such enterprise is sold as a whole as a going concern or as part of a business or through transferring the beneficial ownership in such

Any person facilitating or providing a service in the sale or lease of property in any way and does not use the services of a property practitioner must hold an FFC. Business undertakings shall include any activity, whether sold as a whole or going concern, or as part of a business, or by means of transferring the beneficial ownership.

Additional  Property Practitioner information supplied by PropAcademy:

“A property practitioner is any person who, for the acquisition of gain, directly or indirectly, on the instructions or on behalf of another:

  • sells, purchases, manages or publicly exhibits for sale any property or business undertaking;
  • leases or hires or publicly exhibits for hire any property or business undertaking;
  • collects or receives money payable for a lease;
  • provides, procures, facilitates, secures or otherwise obtains or markets financing for or in connection with the management, sale or lease of a property or business undertaking; and
  • renders services as an intermediary to affect the conclusion of an agreement to sell or let a property or business undertaking (except where this is not done in the ordinary course of the person’s business; where a natural person does it in their capacity, or where the person is an attorney, candidate attorney or sheriff).

Thus, the definition extends well beyond estate agents. It includes

  • auctioneers
  • property developers,
  • property managers,
  • franchisees,
  • providers of bridging finance and bond brokers (aside from financial institutions)

Anyone who falls within the ambit of the definition of a “property practitioner” is required under the Act to register as a property practitioner and obtain a certificate issued by the Fidelity Fund on an annual basis. Refer to Section 47(1) of the Act. Conveyancers are prohibited from paying any money to a property practitioner without receiving a copy of that property practitioner’s valid Fidelity Fund certificate.

Note: The PPA will not apply to the following persons who do not do any of the above-listed activities in the ordinary course of their business;

Persons who sell their property;

An attorney, candidate attorney, or sheriff.”

Who is a Property Practitioner

Taking the above into account, the following persons DO NOT need to register with the PPRA or hold a FFC:

  1. The Sheriff of the Court
  2. An Attorney or a Candidate Attorney can perform estate agent activities without registering with the Authority if he operates in the name of his law firm, from the premises of his law firm only and in the course of his law business. As soon as he operates a separate estate agency, advertises under another name, has employees who advertise under another name, and operates from a different address, he must register as an estate agent and comply with all aspects of the Act.  His employees are also liable for compliance with the education requirements of the Act.  An example of an exclusion would be if the attorney sells a property from an Estate he is winding up.
  3. A natural person selling his residence as long as it is his primary home.

The following persons MUST register with the PPRA and hold a valid current FFC:

  1. Sales & Rental Agents. The only change envisioned in the new Act will be that mandatory disclosure forms must be included in the sale and rental agreements.  If not, the agreement will be interpreted as no defects or deficiencies were disclosed.
  2. Again, the only change will include the mandatory disclosure forms for Auctioneers, like for Sales and Rental Agents.
  3. Business Brokers must comply with the Property Practitioners Act. This refers 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.
  4. Managing Agents are anyone who “collects or receives any monies payable on account of a lease of a property or a business undertaking; (and who) provides, procures, facilitates, secures or otherwise obtains or markets financing for or in connection with the management (of a property)”. Managing agents must comply with all the provisions of the new Act.
  5. Bridging Financiers must comply with the Act and its provisions.
  6. Bond Originators must comply with the Act unless they fall under the Financial Sector Regulation
  7. Timeshare and Fractional Any type of sale of property or property shares must comply with the Act.
  8. All Property Developers must comply with the Act.
  9. The new Act also includes those Trusts that do the work of a Property Practitioner – that is, market, buy, sell, let or auction a property.

Clause 40:

Document Retentions – Section 55 (1) (f) of the Act states all electronic communications sent and received by the property practitioner to a public member during business must be stored. If the communication is on social media and accessible to the public, it doesn’t have to be stored. (5 years)

Schedule 1 –

Lists administrative matters relating to exemptions

Manner and Form of Application:

Clause 41.1 Discusses how to distribute the exemption application to the PPRA.

Clause 41.2: Process of Exemptions –  All applications must be loaded to the PPRA web portal or sent to the PPRA email address or post or delivery. The PPRA has 60 days to respond unless the PPRA has good grounds to extend this time, and if so, they must advise the applicant. The period of 60 days may be extended for a maximum of 20 more days. If information is missing from the application, the 60 day period starts afresh. Should the PPRA fail to comply, the application is deemed approved. An application for exemption may be applied for by an individual or by an entity.

Clause 41.8:

Administration of exemption applications – Exemptions do not only apply to education, but to any aspect related to property, i.e. payment of FFC or non-executive directors may apply for exclusion from holding an FFC

Schedule 2

Administrative matters relating to registrations and Fidelity Fund Certificates

Clause 41:   A single FFC will be issued in respect of all capacities in which a property practitioner acts. FFCs will not state the status of the property practitioner. As a precondition to issuing an FFC, the Authority cannot require a practitioner to bring into compliance any matter pertaining to any period preceding the date upon which an FFC was previously issued unless a complaint is lodged.

Once FFC is approved, the PPRA must upload it to the agents portal within ten days. Conveyancers must hold the FFC of the agency and the agent before distributing funds. An FFC downloaded from the portal will constitute an original. Finally, The PPRA must give the practitioner 30 days notice before withdrawing an FFC and allow the practitioner to apply for an exemption.

According to the Act, you must renew your FFC every three years:

Clause 40:  (1) Every property practitioner, excluding a property practitioner referred to in paragraph (g) of the definition of “property practitioner” in section 1, must, within the prescribed period and in the prescribed manner, every three years apply to the Authority     for a Fidelity Fund certificate, and such application must be accompanied by the fees contemplated in section 34.

Schedule 3 – Grants from the FF

Clause 41.29 Fund must always hold a minimum of R400m. Excess funds shall be used for Transformation Fund.

Schedule 4 – General administrative matters

Clause 41.32 the Authority must upload email addresses or any delivery address for exemption applications on its website. Where a property practitioner acts for a business, then that business information must be reflected on all correspondence and marketing material of that property practitioner. The documents above must also state:

  • that the entity holds an FFC
  • whether or not the entity holds a trust account
  • the property practitioner name and confirmation that he holds a valid FFC

The Authority must give the practitioner 30 days to supply any information that the authority requests. Any person claiming theft, fraud etc., against an agent does not have to take steps against the practitioner. A recognised financial reporting framework must prepare financial accounting, and The SA Institute of Chartered Accountants must determine the type of audit required.

Schedule 5 – Transition

Clause 41.41:  An applicant shall not be precluded from registered in consequence of that person being in any way non-compliant with any of the provisions of the Act unless:

Subject to criminal prosecution

Previous FFC withdrawn as a result of failure to comply with regulations

A Property practitioner who has previously failed to register may do so now with no penalties as long as he does so within six months of the Act and receives the FFC within 12 months from the date of his registration.

The Authority will liaise with representative bodies to bring non-compliant practitioners to compliance. All existing FFC’s and qualifications achieved during the 12 months pre the effective date must be upheld.

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Disclaimer: PropAcademy has prepared these notes to the best of their knowledge and have taken advice from various experts. PropAcademy are indemnified against any misrepresentation or error that may occur herein.