- A new property law that was introduced in February 2022 makes the South African property market more consumer-friendly.
- Benefits include increased regulation of people operating on behalf of buyers and sellers, and the compulsory disclosure of property defects to a prospective buyer.
- The law will also benefit estate agents and other property practitioners, by reducing the administrative and financial burden, and providing support to disadvantaged property practitioners.
A new property law has been introduced that makes the market friendlier to consumers. If you’re looking to invest in property, you will be pleased to know that the law introduces increased regulation and greater protection for you, the home buyer. Sellers also benefit. Here’s how:
Property law as of February 2022
The Property Practicioners Act (PPA), which was passed on the 1 February 2022, makes the following key changes to property law in South Africa:
- The category of property practitioner, which previously only applied to estate agents, has now been extended to other professionals related to property, such as home inspectors, brokers and bond originators.
- Disclosure of defects now compulsory. Home sellers and landlords will be required to produce a comprehensive property defects disclosure document for sales and rentals. This document will need to be signed by all parties.
- Certificates required for anyone who earns a commission or brokerage from a property sale or rental. This will be known as the Fidelity Find Certificate and it will need to be produced on request from a seller or landlord
- A new board has been established, known as the Board of Authority, which will govern the property profession and all it applies to (which, as mentioned, now extends beyond estate agents).
What does this mean for the consumer?
The PPA is very much a consumer-focused bill, for the following reasons:
- Increased regulation of property practitioners. Not only agents, but brokers, home inpectors and other property-related professionals will have to clean up their act.
- Compulsory disclosure of defects obviously provides greater protection for the consumer.
- The Fidelity Fund Certificate protects property sellers by regulating those who collect commissions from the sale.
Do estate agents benefit from the law?
Though primarily consumer-focused, the law will actually benefit property practitioners in a few ways:
- Previously, all property practitioners needed to have a trust account. Now you only need one if you’re handling trust funds. This relieves much of the administrative burden on property practitioners.
- Estate agents can now begin selling properties within six months of completing their Professional Designation Examination (PDE). Year-long internships are no longer required.
- Training and financial support will be made available to disadvantaged practitioners.
- Smaller agencies benefit, as estate agents will no longer need to pay accreditation fees for the rights to market a property. This means agencies with less resources can still be employed to market a development.
Take advantage of new protections
You can now house hunt with confidence, knowing you are better protected by the new laws that have been put in place.
In addition, you can increase your chances of home loan approval by employing a home loan comparison service such as ooba Home Loans. We can submit your application to multiple banks, which allows you to compare deals and choose the one with the lowest interest rates.
We also offer a range of tools that can make the home buying process easier. Start with our Bond Calculator, then use our Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.
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