The New Property Act and What it Means For You
The Property Practitioners Act (PPA), which came into effect on 1 February 2022, is helping buyers make more informed decisions when purchasing a property.
09/05/2022
The Property Practitioners Act (PPA),
which came into effect on 1 February 2022, is
helping buyers make more informed decisions when
purchasing a property. Among many significant
changes this consumer-focused piece of
legislation is bringing to the real estate
industry, a highlight is that it is now a legal
requirement for sellers to disclose all property
defects they are aware of, which has always been
best practice but is now mandatory.
“In
what is arguably one of the biggest investments
you will ever make, this new act ensures that
you have all the facts at hand before you sign
on the dotted line,” says Andrea Tucker,
Director of MortgageMe.
The property
defects disclosure form needs to be signed by
all parties and attached to the sale or lease
agreement. This places a legal obligation of
fairness to both the buyer and seller on the
agent, or the ’property practitioner’, a term
now used to describe estate agents as well as
commercial property brokers, bond originators,
lawyers, auctioneers, property developers and
other professionals in the property industry.
What does this mean?
The PPA compels
homeowners wishing to sell or rent their house
to make a written disclosure to every potential
buyer or tenant disclosing all known patent and
latent defects of the property. Some common
examples of patent defects, or those that can be
seen by the naked eye, include cracked walls,
broken windows, chipped paint, broken tiles,
rotting woodwork and any other obvious damage.
Latent defects, which are harder to
detect and often require the help of
professionals to recognise, include unsteady
walls, rising damp, leaking roofs and other
structural issues. Tucker says that, while not
mandatory, a home inspection done by an
independent property inspector makes good
professional sense on the part of the agent
selling the house, and the report can be used as
a disclosure document. Sellers who conceal
defects in their properties can be sued by
buyers for false advertisement. “A professional
property inspection will bring peace of mind to
buyers and increase trust between buyers,
sellers and the agent,” says Tucker.
The
Act also requires that every person or business
who earns a commission or a fee from the sale or
lease of a property holds a valid Fidelity Fund
Certificate (FFC) from the new Property
Practitioners Regulatory Authority (PPRA) and
can prove that they are tax and BBBEE compliant.
“This will assure buyers, sellers, tenants and
landlords that the agent they are dealing with
is a properly qualified property practitioner,”
explains Tucker.
What to look out for when signing an OTP
When signing an OTP, look
specifically for the mandatory disclosure form.
It must be provided to any prospective buyer,
signed by both the seller and estate agent
(property practitioner), and attached to the
sale agreement. If there is anything on that
form that concerns you, you are fully entitled
to undertake a property inspection to confirm
the state of the property before finalising the
sale. But it is in the best interests of the
estate agent to certify that the form discloses
any issues, as they can be held liable for not
complying with these requirements.
This
new act, created primarily to protect consumers
in the property industry, will go a long way to
ensure a more regulated industry, cutting down
the number of unregistered agents scamming
consumers out of deposits and other fees. “The
PPA will create more informed buyers, and
informed buyers make good decisions,” says
Tucker.
About MortgageMe
MortgageMe is an online bond aggregator. The online platform, launched in 2019, eliminates the time-consuming hassle and paperwork involved in the traditional home loan application process by initiating a super-fast digitised application process that automates tailored submissions to the country's major banks and lenders on a prospective property buyers’ behalf. MortgageMe’s instant access to South African lenders means the best rates are shared with the user side-by-side, allowing them to get a full, realistic picture before making their decision. For more information visit https://mortgageme.co.za/