The Property Practitioners Act 22 of 2019: An Overview of the Act

Mohamed Raees Hussain | Attorney

The Property Practitioners Act, 22 of 2019 (the Act) came into effect on 1 February 2022, bringing with it a host of changes    centered around transformation in the property market, regulation of Property Practitioners, and consumer protection

Notably, any person contemplated in the definition of a “financial institution” in terms of section 1 of the Financial Services Board Act, 97 of 1990 (repealed by the Financial Sector Regulation Act, 9 of 2017), will not be considered as a Property Practitioner.

Some of the significant aims and objectives of the Act are:

1. The regulation of Property Practitioners

• Property Practitioners code of conduct
• Chapter 7 of the Regulations sets out the code of conduct for Property Practitioners.
• The Act together with the Regulations provide for sanctionable conduct and undesirable practices which Property Practitioners must avoid, failing which they will be subjected to penalties (fines and reprimands) by the Property Practitioners Regulatory Authority.

• The Property Practitioners Regulatory Authority (the Authority)
• The Authority is empowered to appoint inspectors who will be tasked with conducting inspections at a practitioner’s business premises.
• The Authority will also be responsible for ensuring compliance with the Act and regulating the conduct of practitioners.

• Property Practitioners Fidelity Fund
• The existing fund will continue to function and will now be known as the Property Practitioners Fidelity Fund.
• The core purpose of the fund is to compensate persons who suffer loss as a result of theft of trust money by practitioners.
• Property Practitioners must make an annual fee payment to the fund in order to obtain a Fidelity Fund certificate.

2. Providing for dispute resolution in the property market and protection of the interests of consumers

• The Property Practitioners Regulatory Authority
• Any person may lodge a complaint against a Property Practitioner for an act or omission with the Authority. The complaint must be in writing and contain all relevant information pertaining to the issue.
• The Authority will investigate the complaint and may refer same for mediation / adjudication.

• Defects disclosure document
• The Act obliges Property Practitioners to deliver a disclosure form to the seller or the lessor before concluding a mandate and to the purchaser or lessee before making an offer.

• Property Practitioners Fidelity Fund
• The Fund will provide compensation to persons who suffer loss as a result of theft of trust money by practitioners. In this regard, the fund can make payment of a maximum amount of R2,000,000.00 per cause of action.

• Displaying the Fidelity Fund certificate
• It will be mandatory for the Fidelity Fund certificate to be prominently displayed in every office where business is conducted by a Property Practitioner.

3. Promoting historically disadvantaged individuals in the property market 

• The Property Practitioners Regulatory Authority
• A significant object of the Act is transformation of the property sector and in this regard, the Authority is mandated to assess and implement measures to progressively promote an inclusive and integrated property sector.

• Property sector transformation fund
• The Authority will establish a fund which will receive grants from the Property Practitioners Fidelity Fund and other sources with those funds being utilised to promote transformation in the property sector.

From the above, it can be seen that the legal framework for regulating a just and equitable property market has been put in place, however, with the Act only recently coming into effect, i.e., on 1 February 2022, it is yet to be seen how the objectives of the Act will be achieved.