President Cyril Ramaphosa has signed two acts into law that will have a significant impact on the real estate industry, according to Shaun Rademeyer, CEO of MultiNET Home Loans.
The first is the Property Practitioners Act, which regulates the real estate market. It is replacing the old Estate Agents Affairs Act of 1936.
"The property industry has changed a lot since 1936; that is why a new bill was needed. The old bill was 'ancient' and did not really comply with all the changes in our society anymore," Rademeyer tells Fin24.
The new act will regulate "property practitioners" (the new name for estate agents, only including a much wider scope). It sets out various requirements for property practitioners to comply with in order to get licensed. Rademeyer says the act has been signed off by Ramaphosa, but a new property practitioners board and CEO still have to be appointed. From there they will be able to implement the regulations of the act.
"Estate agents used to fall under the Estate Agents Affairs Board, but that body is now going to be dissolved and replaced by the Property Practitioners Regulatory Authority. Their task would be to make sure much more qualified and reputable people work as property practitioners in the industry," explains Rademeyer.
The new act also provides consumers with more protection. For example, if a consumer has a complaint about how he or she was treated or information that was not provided, they can lodge a dispute with an ombudsman – who also still needs to be appointed.
"In the past, it was difficult for a person to deal with an estate agent who did not write all the clauses in an agreement correctly, for example, or when things went wrong with the property transaction, for instance if latent faults were not pointed out. Now the property practitioner must inform the buyer of all latent defects of the property. The property practitioner must now also submit a report and a property can no longer just be sold "voetstoots" (as is)," says Rademeyer.
The act has a wide definition of what a property practitioner is. It no longer relates only to estate agents, but could include bond brokers and people doing home inspections too, for instance. In his view, the new board would have to provide some more clarity. "Consumers can be glad that the new act gives them protection and a place to go and complain and resolve disputes.
The act aims to ensure that consumers will be dealing with a well-educated and trained property professional," says Rademeyer. "If they deal with someone who does not have a fidelity fund certificate, they can demand the commission be paid back. Furthermore, an attorney cannot pay anyone without such a certificate any commission monies."
The new act also makes provision for transformation in the industry and requires that government must only deal with property companies rated at level 1 or 2 BEE scores, for instance when using rental agencies for government property. Tenants will also benefit from additional safeguards that will regulate access to the rented property.
"With more renters and buyers seeking sectional titles that accommodate their lifestyles and modern living, this act will give tenants peace of mind and property practitioners more efficient processes to rely on," he explains.
The second act he mentions is the Electronic Deeds Registration System Act. He says this takes the real estate market and property ownership into the digital age. According to Rademeyer, with the new act the chances of documents going missing will be largely eliminated. Attorneys would now also not have to be physically present at the deeds office to submit documents.
"It will introduce an online platform for deed registration, offering users access to their deeds and the registration process, anywhere, anytime," says Rademeyer. "The slow and arduous process that has become synonymous with the registration and access of deeds at deeds offices could become a thing of the past."