MPs adopt Property Practitioners Bill

The National Assembly has adopted the Property Practitioners Bill which will repeal the outdated Estate Agency Affairs Act of 1976 and introduce far-reaching changes to the regulation of the industry.

Human settlements minister Nomaindia Mfeketo said in her speech during the debate on the bill that it was also intended to accelerate the transformation of the property sector.

It was geared to address the historic imbalance in the property market created by the legacy of apartheid, she said, and would promote the participation in the sector by previously disadvantaged individuals and companies.

The bill provides for the regulation of property practitioners and the replacement of the Estate Agency Affairs Board by the Property Practitioners Regulatory Authority. It also provides for the establishment of the property practitioner’s ombud office and the continuation of the Estate Agents Fidelity Fund as the Property Practitioners Fidelity Fund.

There were no objections by any political party to the adoption of the bill.

A transformation fund will be established to which both government and industry will contribute to help small black estate agencies and new entrants into the market. Small and medium property practitioners will be exempt from the requirement to submit audit reports and to establish trust funds.

During public hearings on the bill, black estate agents’ associations highlighted the need for training and the removal of barriers to entry. They pointed out that less than 6% of estate agencies were owned by blacks, who collectively earned less than 1% of the estimated R2.6bn in commission from the residential sector in 2016.

The bill seeks to put in place better monitoring mechanisms compared with the current act which provides inspectors with wide powers of search and seizure on premises without proper authority.

The bill requires that inspectors obtain a warrant to enter premises. It also provides for instances of disqualification to practice as a property practitioner.

ensorl@businesslive.co.za