analysis<\/a> <\/strong>of the incoming Act, Justine Krige, director at law firm Cliffe Dekker Hofmeyr, said the PPA is a consumer-focused piece of legislation that has been designed to protect consumers in the property industry.<\/p>\n“In line with this, the PPA obliges property practitioners to deliver a ‘disclosure form’ to a seller\/lessor before concluding a mandate, and to a purchaser\/lessee before making an offer,” she said.<\/p>\n
The Act defines ‘property practitioners’ to include everyone involved in the selling, purchasing, letting, renting, financing and marketing of property. Krige said that the disclosure form must be signed by all parties and attached to the sale or lease agreement<\/strong>.<\/p>\nIf no disclosure form is signed and attached, the PPA provides that the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser.<\/p>\n
“A property practitioner cannot accept a mandate unless the seller or lessor has provided a fully completed and signed disclosure form.”<\/p>\n
The Act also requires that Fidelity Fund Certificates (FFCs) be made readily available for consumers to inspect. Attorneys and other legal practitioners with trust accounts are required to obtain a Fidelity Fund certificate each year.<\/p>\n
“FFC holders must have their certificate prominently displayed in every place of business where they conduct property transactions,” Krige said.<\/p>\n
“The FFC holder should also ensure that the prescribed sentence regarding holding an FFC is reproduced on any letterhead or marketing material.<\/p>\n
“Importantly, in any agreement relating to property transactions, the FFC holder must include a prescribed clause guaranteeing the validity of the certificate.”<\/p>\n
Every property practitioner must also:<\/p>\n
\n- \n
\n- Open and keep one or more separate trust account\/s;<\/li>\n
- Appoint an auditor;<\/li>\n
- Provide the Property Practitioners Regulatory Authority with all information regarding the trust account\/s and auditor appointed;<\/li>\n
- Deposit all trust money in the relevant trust account; and<\/li>\n
- Keep separate accounting records for the trust account\/s and have them audited.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n