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Which Professional Designation should I be using?

The professional designations that may be used by qualifying estate agents

Below is a list of the designations set out by The Estate Agents Affairs Board (EAAB).

In addition to the below, there are restrictions to using these designations:

  • you must have a valid fidelity fund certificate, and
  • you must have passed the required exam.

If you were granted exemption against the PDE, you may not use the designation. You may, however, elect to write the exam should you wish to earn the entitlement.

PPRE

You may use this designation if you have passed the PDE 4.

MPRE

You may use this designation if you have passed your PDE 5.

PPRE MPRE

If you have passed both the PDE 4 and PDE 5, then you may use both designations.

Referring to practice note ETD01/2013 effective as from 19 March 2013.

How to find out if you are exempt from studying regulated Property Practitioner Courses?

Real Estate Course Exemptions

Any person wanting to become a Property Practitioner will have to complete his/her 12 month internship, NQF qualification, PDE exam.

Having to complete studies to enter the Real Estate space can be daunting, especially if you have spent years studying in a different field.  At PropAcademy we have de-mystified the Estate Agents Affairs Board (EAAB) exemption requirements and look forward to assisting you in obtaining an exemption in the regulated NQF qualification.

The EAAB requires that newcomers to the industry complete their 12 month intern logbook portfolio of evidence, your NQF Level 4 Real Estate and the Professional Designated Exam Level 4 (PDE4).

FET: NQF Level 4: 59097: Real Estate

Any person holding an accredited NQF6 qualification from a tertiary institution, regardless of what the qualification is, may be exempted from NQF4 Real Estate 59097.

NQF5 20188 Real Estate

Any person holding an accredited NQF7 qualification from a tertiary institution may be found exempt from NQF5 Real Estate.

Documents that PropAcademy will require to apply on your behalf:

  • Certified ID
  • Certified degree, certificate or diploma
  • Certified transcript of studies (Statement of results)
  • Certified matric certificate with a second language (not restricted to SA languages)
  • Updated CV which must include all qualifications studied
  • Proof of payment of the prescribed EAAB assessment fee

(All certifications must be no older than 3 months)

Intern Logbook

You must have held a FFC as a registered estate agent prior to 2013

PDE4 & PDE5

To qualify for the grant of the statutory exemption against the Professional Designation Examination (PDE) the applicant must have been issued with valid Fidelity Fund Certificates by the EAAB for a continuous (without a break) period of five years at any time prior to 15 July 2008.

Over 60’s Exemption

You must have held a valid FFC as an operating estate agent for 5 consecutive years

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 New Property Practitioners Act

The New Property Practitioners Act for Estate Agents

The new Property Practitioners Act, which will replace the current Estate Agency Affairs Act, was passed by the National Assembly and the National Council of Provinces, signed off by our President and, at time of writing, is awaiting only for stakeholders to be invited to comment on the Regulations, and then it will be gazetted.  Once gazetted the advert will give the effective date of the Act.

In terms of the new Act, the Board of Authority (the old EAAB or Estate Agency Affairs Board) will have to issue a new Code of Conduct to bring Code in line with the provisions of the new Act. In addition, the new Act will be accompanied by a set of Regulations that have yet to be published.

PropAcademy has not yet had sight of the Bill as passed, and so we do not yet know if the final version that will be signed into law by the President contains any changes to the earlier version of the Bill.

However, some of the provisions of the new law envisaged in the latest version of the Property Practitioners Bill we have seen contains some far-reaching changes for the property industry. We have therefore put together this guide to give you an indication of the changes you can expect. As soon as we know the precise contents of the new Act, we will update this blog. We therefore urge you to approach this blog in the spirit in which it is intended: as an opinion piece rather than a definitive interpretation of the new Act.

Many of the key differences between the old and new Acts will be changes in the terminology used in the profession.

  • Estate Agency Affairs Act (1976)
  • Intern Estate Agent
    Full Status Estate Agent
    Principal Estate Agent
  • Estate Agents Affairs Board
  • Fidelity Fund
  • Property Practitioners Act (2019)
  • Candidate Property Practitioner
    Property Practitioner
    Principal Property Practitioner
  • The Board of Authority (which falls under the Property Practitioners Regulatory Authority)
  • Property Practitioners Fidelity Fund

The Bill (before it was passed by the two houses of Parliament) also contained significant changes regarding who is to be subject to the provisions of the Act and who isn’t.  This is important and if any changes were made in the draft Bill, they were likely to be made here.

Who is subject to the Act’s provisions:

1.

  1. Sales & Rental Agents. The only change envisioned in the new Act will be that mandatory disclosure forms must be included in sale and rental agreements. If not, then the agreement will be interpreted as if no defects or deficiencies were disclosed.
  2. Auctioneers. Again, the only change will be to the inclusion of the mandatory disclosure forms for Auctioneers in the same way as for Sales and Rental Agents.
  3. Business This is new. Business brokers, who were excluded from the provisions of the old Act, must now comply with the Property Practitioners Act. This refers specifically to the marketing, promotion, managing, sale, letting, financing and purchase of immovable property, and to any rights, obligations, interests, duties or powers associated with or relevant to such property.
  4. Managing In terms of the new Act, a Managing Agent is 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 Another new role brought within the ambit of the Act. They too must comply with its provisions.
  6. Bond The issue around Bond Originators is a little unclear at this stage. Because Bond Originators are included in the Financial Sector Regulation Act, the presumption was that they would be exempt from the provisions of the Property Practitioners Act. However, in terms of the version of the Bill we have seen, they are also included. We anticipate clarification of this either as part of the Act, or the new Regulations.
  7. Timeshare and Fractional These type of property transactions are now also covered by the Act.
  8. Attorneys and Candidate Attorneys are exempt as long as they are acting as lawyers (rather than as Estate Agents) and working from their own business premises. That means that if they sell a property as part of a Deceased Estate or Litigation, they do not need to comply with the Act.
  9. Developers. Unless a developer is a natural person selling his or her own property, all Property Developers must comply with the Act.
  10. Trusts. The new Act also includes those Trusts that do the work of a Property Practitioner – that is buys, sells, lets or auctions a property on its own.

2. While many people and businesses are not included and must comply with the Act, there are several who are now specifically excluded. These include

  1. Attorneys and Candidate Attorneys can perform estate agent activities without registering with the Authority if he operates in the name of, from the premises of, and in the course of his law firm only.  As soon as he operates a separate estate agency, advertises under another name, has employees who advertise under another name, operates from a different address, then he is required to 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 that he is winding up.
  2. Sheriff of the Court
  3. Natural persons selling their own properties

There are also new requirements relating to Fidelity Funds. The most important of these are:

3. Fidelity Funds will continue to run under the Property Practitioners Fidelity Fund.

  1. The running costs of the Board of Authority (which replaces the old EAAB) including insurance premiums will also be paid from this fund.  In addition, the Authority can issue funds from the Fidelity Fund for:
    a) research in field of activity relevant to property practitioners;
    b) maintenance and promotion of the standard of conduct of property practitioners;
    c) grants for education and training, and
    d) transformation.
    We presume that these additional expenses will come into effect once a fund is set for potential claims from the public against insurance claims.
  2. Current Fidelity Fund Certificates (FFCs) must be displayed at the registered office of the Property Practitioner. Expired FFCs may not be displayed.
  3. The Authority must issue a FFC within 30 days. Failure to do so will result in the application deemed to have been approved and the Authority must upon written request by the applicant produce the certificate within 10 days.
  4. A five-year moratorium is to be applied to all prior contraventions of the Act. In other words, if the agent/agency contravened the Act five or more years ago, it can no longer be held against them.
  5. A conveyancer may not pay any remuneration or other monies to a property practitioner unless that property practitioner has provided the conveyancer with a copy of their Fidelity Fund certificate, valid at date of sale.

We have also listed some of the other changes of note in the Bill (which may or may not be included in the Act as promulgated):

  1. Inspectors appointed by the Authority will have the power to enter and inspect any business premises of a property practitioner without a warrant.
  2. Non-Executive Directors. There has been no change to the status and duties relating to non-executive directors. They may not be involved in the operations of the agency other than in departments that do not deal in property or with the public. They must hold a FFC and are exempt from education compliance.
  3. Ombudsman.  The new Act will make provision of a Property Practitioners Ombud Office  to be established. This will be a Section 21institution, similar to that of the Public Protector.
    The Property Practitioners Ombuds Office will consider and dispose of complaints lodged in terms of the Act in respect of the financing, marketing, managing, letting, hiring, sale and purchase of the property and to provide mechanisms for the resolution of those complaints.
  4. Language of Contracts. A purchaser/tenant/lessor/seller can request the agreement to be in any one of South Africa’s official languages, and this must be supplied by the seller.  Samples of contracts in all languages will be available on the Authority’s website.  An agreement is defined as a mandate, lease or sale agreement.
  5. Transformation. It seems that Human Settlements Minister Nomaindia Mfeketo wants to see the involvement of more black people in the property industry. One way in which this is to be achieved, is for all State institutions to be permitted to utilise the goods and services of only those property practitioners who comply with the Broad Based Back Economic Empowerment and Employment Equity legislation and policies.
  6. Grants. The Authority may authorise grants for various purposes, including: research, the maintenance and promotion of the standard of conduct of property practitioners; maintenance and promotion of the training standards of property practitioners; the education and training of property practitioners; the transformation of the property sector, and others.
  7. Automatic disqualifications A few new disqualifications have been added to the existing list. For example, to apply for a FFC you must have a Tax Clearance Certificate and a BEE Certificate.  You will also be disqualified if you are on the Treasury tender defaulters list.
  8. Record keeping You are required to keep all correspondence, legal agreements, copies of advertising and marketing materials for 5 years.  These can be stored electronically.
  9. Trust Account exemptions will be considered to assist transformation into the industry.  These will be determined on their merit and will be for a set period only.  Where annual income for any estate agency practice is R2.5m or below, the Trust Account no longer requires an audit from a registered auditor, the firm must ensure that their annual financial statements are signed off by a registered accountant.

We will be keeping an eye open for the gazetting of the new Property Practitioners Act and will update this blog with any changes should this be necessary.

If you have any questions or you would like to share your own experiences with the Property Practitioners Act, please feel free to post them in the comments below.

How to Qualify as a Full Status or Principal Real Estate Agent

Qualification Process for Real Estate Agents

It is quite a daunting process understanding real estate education regulations in South Africa, and the set qualifying process.  We are going to do our best to set this out for you in a way that you can easily understand the steps, and why they have been implemented.

Prior to 2008 estate agents were required to write an exam set by the EAAB, and that was it.  The EAAB was formed to regulate the conduct of estate agents.  The EAAB was established in 1976 in terms of the Estate Agency Affairs Act 112 of 1976 (‘the Act”), with the mandate to regulate and control certain activities of estate agents in the public interest.

The EAAB regulates the estate agency profession through ensuring that all persons carrying out the activities of an estate agent as a service to the public are registered with the EAAB. A Fidelity Fund Certificate, which is to be renewed each year is issued as evidence of such registration and confirmation that such person is legally entitled to carry out the activities of an estate agent.

South African Qualifying Association (SAQA) is the body that issues qualifying certificates from school to Doctorates.  ServiceSETA (SSETA) falls under SAQA and controls the NQF4 and NQF5 real estate qualifications.

Here is a high-level overview of each step. Should you want additional or detailed information about any aspect of the process, simply click on the links provided.

The Qualifying Process – Step-by-Step

Step 1: Preparing for the Journey

Before you can study to become a qualified estate agent, you must:

Step 2: First Steps – Intern logbook

  • Start your intern logbook. This must be completed in 12 months. Click here for details of how PropAcademy can help you to meet this deadline. If you miss the deadline, you may find yourself facing disqualification, having to start all over again.
  • You can check your due date for submission of your logbook by logging in to the EAAB portal and clicking on “Qualification Status”.

Step 3: NQF4

To become a full status real estate agent, you must be competent in the outcomes-based NQF Level 4 Real Estate requirements as set out by the SSETA and be found competent in your PDE4 exam.

  • Check whether you qualify for NQF4 exemption. Click here to check your qualification against the EAAB Matrix. If you think you qualify for exemption, apply for this (this can take two months).
  • If you are not exempt, determine whether you need to complete:

If you are doing the NQF4 or the NQF4 RPL course, and cannot provide proof that you have passed Mathematics and a 2nd South African language at a Matric level, then you will need to purchase the relevant bridging courses through PropAcademy. The NQF Level 3 Functional Mathematics Course and/or the NQF Level 3 Literacy Course.

Step 4: Professional Designated Exam Level 4 (PDE4)

To become a Full Status estate agent, you must write and pass the EAAB’s PDE4 exam.

This is a 4-hour open book exam written through the EAAB. Check the next exam date by clicking here. Bookings for this exam open 6 weeks prior.

  • As soon as you receive your NQF4 competency certificate from SSETA, book for your PDE4 exam with the EAAB.
  • Brush up on the knowledge you will require to pass the exam, this course has maintained it’s 100% pass rate.
  • Write and pass this exam.
  • Go out and celebrate – you are now a Full Status Estate Agent!

Step 5: CPD Points

To maintain your status, you will need to earn CPD points. Click here for details about the CPD process and complete your non-verifiable CPD points online by registering here.

Step 6: Achieve Principal Status – NQF5

To become a Principal Property Practitioner, you must be found competent in NQF5 Real estate. You do not have to have written your PDE4 exam to begin your NQF5 studies, however this exam must be completed. To start your NQF5 studies you must have completed your NQF4.

  • Check whether you qualify to be exempt from NQF5. Click here to check your qualification against the EAAB Matrix. If you think you qualify for exemption, apply for this (this can take two months).
  • If you are not exempt, determine whether you need to complete:
  • Another celebration is called for – you are now a Principal Property Practitioner! Just one more step to go to maintain your status…

Step 7: Professional Designated Exam Level 5 (PDE5)

Your journey is coming to an end. Armed with your NQF5, you have just two years to write and pass your PDE5 to maintain your Principal Status. Bookings for this exam open 6 weeks prior.

  • Check the next exam date by clicking here and book your seat through the EAAB.
  • Brush up on all your real estate knowledge to sit for the four-hour PDE5 exam. Our 100% pass rate is still intact.
  • Write and pass your PDE5 exam
  • Your journey is complete

EAAB & ServicesSETA Qualification Process Infographic

To make it a little easier for you to keep track of the qualification process, we’ve put together this handy infographic which you are welcome to download, print and share.

Real Estate Qualifications Flow Chart

Click the image above to download and save it to your computer or print it out so you can refer to it at any time.

The Qualifications Flow Chart | Who is PropAcademy? | How to Register for a Course | Enter the Lucky Draw

Hint: Read our blog – it contains interesting hints and tips. For more detailed information, download our eBook “Estate Agents Affairs Board (EAAB) & ServicesSETA (SSETA) Qualification Guide”.

We hope this makes the EAAB & ServiceSETA qualification process for real estate agents a little easier to follow, but if you have any questions, please post them in the comments below or contact us and we’ll gladly assist you on your path to becoming a qualified estate agent. And if you found this guide helpful, please like and share it with your friends and colleagues.