The right to own property in South Africa is enshrined in Section 25 of the Constitution. The registration of rights to and over immovable property is regulated by the Deeds Registry Act, 1937, which sets out the registration requirements and processes necessary for the transfer of ownership or creation of real rights in respect of land, including the process whereby security is registered in favour of lenders (i.e. Banks).
Property Practitioners Regulatory Authority Act
There are four main provisions that the Property Practitioners Regulatory Authority Act covers:
- To establish the Property Practitioners Regulatory Authority
- To establish and monitor the Property Practitioners Fidelity Fund
- To control certain activities carried out by property practitioners
- To deal with any incidental or disciplinary matters
The Property Practitioners Regulatory Authority (PPRA)
The PPRA protects the interests of the public and ensures that property practitioners are compliant with the Act.
Trust Accounts
Every property practitioner must have a correctly balanced trust account. Service charges cannot be debited from this trust account and must be borne as a normal business expense. The correct registered name of the property practice with the PPRA must appear on all bank statements.
Trust accounts must be audited annually by an auditor registered with the Independent Regulatory Board (IRBA), and all reports must be submitted by the auditor via the auditor’s portal on the PPRA website.
Compliance
A property practice must be compliant in the following areas:
- Submission of audit reports
Failure to submit an audit report will result in the PPRA not issuing a new FFC (Fidelity Fund Certificate) to the principal nor their practitioners, even if their fees have been paid. This means the practice and its practitioners may not trade as property practitioners, and the seller is not obligated to pay commission until the practice is compliant.
- Not completing the required educational requirements within the stipulated time
Should a practitioner fail to complete the prescribed industry qualifications within the prescribed time, the practitioner will not be issued a new FFC. The property practitioner will also not be able to claim commission on any sale made by the practitioner.