Selling or leasing property? Take note of the new Property Practitioners Act

Feb 15, 2022 | FYI's

Selling or leasing property? Take note of the new Property Practitioners Act

INTRODUCTION

The Property Practitioners Act (“PPA”) has come into effect on 1 February 2022. The PPA aims to ensure a healthy property market, to regulate property practitioners and to protect consumers. An important example of consumer protection is the compulsory inclusion of a property defects disclosure form (“disclosure form”) for both property sales and rentals. Regulatory changes focus on matters such as trust accounts, certification, who qualifies as a property practitioner and the Property Practitioner Fidelity Fund.

CHANGES

·   MANDATORY DISCLOSURE FORM

For both sales and leases a completed disclosure form (in a format prescribed by section 36 of the Property Practitioners Regulations, 2022) and signed by all the parties must now be attached to the agreement and forms an integral part of the agreement. It may be noted that this form only refers to “sellers” and it is therefore unclear which format is to be used for lease agreements.

Under the PPA from 1 February property practitioners may not accept a mandate from either a seller or landlord where there is no comprehensive disclosure form. The PPA is silent on whether companies are included in this. If they do accept the mandate, their actions may result in liability towards the affected consumer. If the disclosure form was not completed, signed or attached to the agreement, the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser. The disclosure form is not a substitute for any inspections or warranties, which means that the buyers or tenants can still insist on these in the agreement.

·   TRUST ACCOUNTS

Previously, all property practitioners needed to have a trust account, involving bank charges and an annual audit, even if they did not handle trust monies. Under the new PPA property practitioners only need a trust account if they actually handle trust monies. If not, they must have a valid exemption…….

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SELLING OR LEASING PROPERTY TAKE NOTE OF THE NEW PROPERTY PRACTITIONERS ACT – M Smet


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