PROPERTY PRACTITIONERS BILL, 2018 PRESENTATION TO THE PORTFOLIO COMMITTEE ON HUMAN SETTLEMENTS 26 JUNE 2018 By: Khwezi Ngwenya

TABLE OF CONTENTS Purpose. Background. Object of the Bill Content of the Bill Current status of the Bill Way forward.

PURPOSE OF THE PRESENTATION To brief the Portfolio Committee on Human Settlements on the Property Practitioners Bill,2018. The principal object of the Property Practitioners Bill, 2018 (''the Bill'') is to repeal the Estate Agency Affairs Act, 1976 (Act No. 112 of 1976) (''the Act''), which was meant to provide for the Estate Agency Affairs Board, the Estate Agency Fidelity Fund and for the control of certain activities of estate agents in the public interest.

BACKGROUND Over the years, new market conditions dictated a paradigm shift from the traditional practices of estate agent and estate agency; There is an increase in number of new role-players in the property market, e.g. bond originators, bridging finance, etc.; There is a need to align the new legislation to the new market conditions; The current legislation is archaic and out of sink with the democratic dispensation; There is a need to align the new legislation to the constitutional imperatives; There is a need to comply with good corporate governance ethos and principles.

BACKGROUND (CONTINUATION) The Bill was gazetted for public comment process in the Government Gazette on 31 March 2017 under Notice No. 247 of 2017 for period of 30 calendar days. During this process the department received written submissions. Thereafter the Information Sessions were held from 20 June 2017 to 06 July 2017 in all nine (9) provinces with aim to enrich public comment process. The department conducted a workshop from 27 July 2017 – 28 July 2017 where it considered and incorporated those comments that enriches the Bill.

OBJECTS OF THE BILL To transform the property market by ensuring that it is reflected of the SA demographics; To create alignment and synergy to the constitution and other relevant legislation, i.e. PAJA, CPA, etc.; To enhance corporate efficiency; To embark on a drive to professionalise the real estate industry.

CONTENTS OF THE BILL Chapter one of the Bill deals with the definitions, objects, application and establishment. The Bill define “ Property Practitioners” to include everyone involved in the selling, purchasing, letting, renting, financing and marketing of property. Chapter two of the Bill provides for the governance and structures of the Property Practitioners Regulatory Authority (PPRA). The Bill provides for the composition, appointment, disqualification, dissolution, termination, management of conflict of interest, code of ethics, powers and duties of the members of the Board and committees of the Board.

CONTENTS OF THE BILL (CONTINUATION) Chapter three of the Bill provides for the appointment of the Chief Executive Officer, staff of the Authority and management of conflict of interest within the Authority and delegation of functions and powers by the CEO. Chapter four of the Bill provides for the establishment, appointment, resources, powers and duties of Ombud. It provides for the establishment of Property Practitioners Ombud Office, appointment of Ombud, staff and resources of Ombud, lodging of complaints, mediation and adjudication. It further provide for the accounting and reporting by the Ombud.

CONTENTS OF THE BILL (CONTINUATION) Chapter five of the Bill provides for compliance and enforcement measures. It further provides for the appointment, powers and duties of inspectors to ensure compliance. It provides for procedure of lodging complaints or non compliance. Inspectors are empowered to search premises and seize documents from property practitioners where there is non compliance with the Act. They are empowered to issue compliance notices for non compliance for a person to comply within a specific time. In the compliance notice the authority may determine a fine to be paid by the person concerned.

CONTENTS OF THE BILL (CONTINUATION) Chapter six of the Bill provides for the funds of the Authority and financial year of the Authority. Chapter seven of the Bill provides for the continuation of the Estate Agency Fidelity Fund under the new name “Property Practitioner’s fidelity fund”. It provides for the management and control of the Fidelity Fund, regulates the investment of monies and payments of funds from the Fidelity Fund. Chapter eight regulates the application for a Fidelity Fund certificate and prohibits rendering service without the Fidelity Fund certificate.

CONTENTS OF THE BILL (CONTINUATION) Chapter nine regulates the conduct and behaviour of Property Practitioners through the code of conduct, sanctionable conduct, prohibition of undesirable practices and measures concerning control and supervision of candidate Property Practitioners. It also regulates franchising in the industry. Chapter ten of the Bill regulates consumer protection and provides for a mandatory disclosure form, language of agreements, consumer education and information.

CONTENTS OF THE BILL (CONTINUATION) Chapter eleven of the Bill deals with the general matters which include, promotion of property sector transformation, making of regulations, penalties, delegation of powers by the Minister, legal proceedings against the Authority, the use of the name of the Authority and transitional provisions. S69(3)(c) stipulates that the Authority must from time to time introduce measures to be implemented which may include establishment of a transformation fund, incubation and capacity building programmes to redress the imbalances of the past.

CONTENTS OF THE BILL (CONTINUATION) Further S69(4) states that The transformation fund envisaged in subsection S69(3)(c) shall aim to promote economic transformation by facilitating the accessibility of finance for property ownership, property development and investment in order to enable meaningful participation of historically disadvantaged individuals including women and youth.

CURRENT STATUS The Bill was presented to the Cabinet on 06 December 2017 and the Cabinet approved the submission of the Bill to Parliament. The Bill was subsequently introduced into Parliament by the Honourable Minister in terms of Rule 241 (1) of the Rules of the National Assembly.

Thank you