What is the Property Practitioners Act and How Will it Change Inspections in South Africa?

The Property Practitioners Act (PPA) will come into effect from 1st February 2022, President Cyril Ramaphosa has announced.

The Act, which will repeal the Estate Agency Affairs (EAA) Act, was originally tabled in March 2020 for public comment. At the time, no definitive date was given as to when the Act would come into force.

Industry commentators have said that the Act will bring a raft of significant changes to the property sector in South Africa, both for consumers and industry practitioners.

While it has been designed to protect consumers first and foremost, property practitioners have been urged to learn of the new changes if they haven’t already, lest they fall foul of the new regulations.

Commission and Brokering Requires Certification

The new Act will introduce the necessity for a valid Fidelity Fund Certificate for practitioners who broker or earn commission from sales and leases. Sellers and landlords can request this from their property professional at any time.

While already a part of the previous act, the new legislation will expand to include the need for tax clearance and BEE certification, with compliance a must for both individuals and businesses.

Property Defect Disclosure Documents are Mandatory

The Property Practitioners Act will now make property defect disclosure documents a mandatory requirement for sales and leases, whereas before it was optional, although always considered best practice.

Like other nations, the document will become a vital part of the sale or lease agreement, though buyers may still wish to solicit a professional to conduct a property inspection separate to the legislative requirements.

What is a Property Practitioner?

What does a Property Practitioner do?

The Act defines a property practitioner as someone involved in letting, purchasing, marketing, selling, financing or renting. In a move welcomed by many consumers, the Property Practitioners Act seeks to cover a diverse range of practitioners in the industry. Going beyond the former EEA act, which saw its definition of a practitioner fall squarely on the more traditional estate agent, the PPA includes legislation pertaining to the roles of home inspectors, homeowners’ associations, property developers and brokers, among others. 

What Does This Mean for Inspections?

Heavily featured in the new Act, property inspections amounting to a property defect disclosure document will become a mandatory requirement for sales and leases. With this new legislation making reports like this a must-have, how will property practitioners keep up with the demand?

Well, as is the case with many other paper-based processes in the property industry, technology is tipped to rise in prominence for inspections in South Africa, countering the need for even more paperwork.

David Hutchison, Sales Director at Property Inspect South Africa, comments: “Whilst the ramifications and the opportunities due to the introduction of the new Property Practitioners Act are still unclear, what is certain is the need for better property technology to provide compliant reports and property audit trails.”

Proptech Holds the Key to Efficiency

Failure to adopt technology could be detrimental in the wake of this new legislation, with a host of new mandatory documentation likely to swamp your average property practitioner. 

The benefits of adopting an end-to-end property inspection app are clear to see, chiefly among which is the ability to save time and money.

As well as full compliance, efficient workflows, and in-depth auditing, the other benefits are manifold.

“Dispute resolution, fairness in handling disputes, professionalism, time-saving and business risk reduction are all benefits of upgrading your inspection process, and your proptech in general.”

But property technology adoption in South Africa has been slow to catch on, not unlike most of the world’s property sectors.

Resistance to change has been a huge stumbling block over the years, though property technology is having its breakthrough moment with some leading property organisations in South Africa.

So too organisations across the world, who are now benefitting from smarter, digital tools and platforms that speed up many facets of the property process, and inspections are no different. However, it’s not without its risks, as David Hutchinson explains:

“Before making a switch, look out for systems with a proven track record, a clear vision for the future features that you actually need, as well as good quality APIs for future integrations in order to further streamline your business.”

If you’d like to explore how Property Inspect can help you with your business’ Property Practitioners Act 2022 workload, get in touch today or book a demo.

Download Property Practitioner Act PDF

Disclaimer: This article does not constitute legal advice and should not be used as such. If you require further guidance, contact a legal professional with expertise in the aforementioned Property Practitioners Act.