property practitioner act

How the Property Practitioners Act will impact sectional title schemes

On 1 February 2022 the new Property Practitioners Act will commence. While this new consumer-driven Act aims to provide protection for consumers when purchasing, leasing, financing, renting or property, the requirements will be quite taxing for property practitioners.

Below are a few changes of importance that the new law will bring to the industry.

Property practitioners & Fidelity Fund Certificates

The definition of a property practitioner is expanded in the new act and includes:

  • traditional estate agents, commercial property brokers & property managers
  • bond originators
  • home inspectors
  • homeowners’ associations
  • companies selling timeshare and fractional title
  • property developers

Practitioners will be required to have valid certificates which must be produced when requested by a client. In addition, the practitioner must also now have a valid tax clearance certificate and a BEE certificate.

Property defects

It will now be mandatory to have a property defects list attached to a sale or letting agreement in all property transactions. This will allow both parties, landlord/seller and purchaser/tenant to review the list before proceeding with the transaction. This document is referred to as the disclosure form.

The Act obligates practitioners to provide a disclosure form to the seller/landlord and the purchaser/lessee before receiving a mandate or making an offer on a property. Furthermore, the Act requires all the contributors in a property transaction, as listed above, to sign the disclosure form.

Although the disclosure form will be mandatory, no mention is made of what happens when no disclosure form is submitted and signed. The onus remains with the practitioner to demand that the form is attached to any documentation.

Administrative requirements

Practitioners will be required to manage their businesses differently from 1 February 2022 onwards. Monies relating to property transactions may only be kept in a trust account which must be professionally audited on an annual basis. The practitioners must provide all relevant information pertaining to the trust account to the appointed regulator.

Practitioners will be required to display their fidelity fund certificates in all their places of businesses; it must also be stated on their letterheads.

Impact on sectional title schemes

The Act will not affect the management of sectional title schemes directly except for individual owners when they want to buy, sell or lease their units. In that case, the owner will need to ensure that disclosure forms are completed and included in sale and letting agreements.

Property managers will need to make sure they are compliant with the requirements of the Act. It remains to be seen if there will be any conflict between the new Act and the Sectional Titles Schemes Management Act which allows for schemes to have their own bank accounts that are not trust accounts.

Where practitioners are involved in these transactions, owners will be best advised to check the credentials of those practitioners involved and ensure that documents are signed by all parties involved.

Property managers employed by managing agencies will also need to ensure they are compliant with the legislation. There is an opportunity to improve the standard of the industry and for consumers to limit the activities of non-compliant agencies.


The new Act places stricter controls on property practitioners and allows consumers to rely on more information relating to the properties they want to enter agreements on. Practitioners will need to extend their compliance checklists to include new legislation for every transaction in which they are involved.