What does the arrival of the Property Practitioners Act mean for consumers?

As of 1 February 2022, the Property Practitioners Act, 22 of 2019 (PPA) came into effect. The Estate Agency Affairs Act is repealed and the Estate Agency Affairs Board is replaced by the Property Practitioner’s Regulatory Authority (PPRA)- a body we hope will more effectively protect consumers’ rights.

If you rent or buy a property, you now have a right to a list of the defects, which must be attached to your lease or offer to purchase. This signed disclosure form must be provided by the seller / landlord of the property to the estate agent when they sign the mandate.

Attaching a disclosure form to an agreement of sale was a practice that was undertaken by sensible estate agents in the past – however it was not expressly required except by the EAAB’s guidelines. The Act now makes this disclosure form a material part of the agreement. The new Act goes even further to provide that if the disclosure form is not attached, signed or completed the agreement must be interpreted to mean that no defects or deficiencies were disclosed to the purchaser – and this presumably also applies to a tenant. The consequence then, for failing to fill out this form or filling it out incorrectly, is that the seller and estate agent may be held liable by a buyer if any issues are discovered subsequent to the buyer moving into the property to repair the issue at their expense. This may also apply to tenants vis-à-vis the landlord.

If an undisclosed defect is discovered, the buyer can also demand repair at the seller / estate agent’s expense. The Act implies that a tenant or buyer can cancel the transaction if an undisclosed defect is discovered. The PPRA can also impose a sanction against an estate agent if they don’t attach a completed and signed disclosure form to the contract.

We often encounter leases which require the tenant to pay for the cost of drafting the lease. The Act outlaws this by making it clear that the expense of a lease or sale agreement as well as for the disclosure form, is for the account of a seller or landlord – as the case may be. It further requires that the PPRA must publish guideline agreements on its website.

The Act goes on to say that a property practitioner (estate agent) owes both the seller and buyer a duty of care. This places a much higher ethical duty on estate agents than before – the estate agent must act in the best interests of the seller as well as the buyer. This will require more regular and more careful communication to both parties and that estate agents withdraw from transactions where they are not acting independently.  It will certainly pave the way for consumers to hold estate agents liable where they have caused consumers to suffer loss or harm.

All three of these provisions illustrate that the Act ushers in a realization of consumers’ rights within the property sector and their effect is that they do away with the notion that estate agents only have a duty towards the seller, considering that they receive their mandate from them.

In sectional title estates, exclusive mandates to a single estate agency are no longer permitted. Property developers also need to register as property practitioners before being allowed to sell their properties.

How can our firm assist?

  1. The PPRA has not yet brought out a template disclosure form. We can assist sellers, estate agents and landlords with drafting customised or standardised forms.
  2. If you are a consumer and notice that any of your rights in terms of the Act have been disregarded, call us if you have a claim against a property practitioner or wish to cancel your agreement.
  3. We can provide practical training for property practitioners, whether online or in person.
  4. The Act contains a lot of drafting errors and gaps- we can help you try to make sense of it.
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