The effects of the new Act by the Property Practitioners Regulatory Authority for property practitio

The effects of the new Act by the Property Practitioners Regulatory Authority for property practitioners in relation to practitioners deemed unqualified and are still interns, being removed from the system and not being recognized as compliant property practitioners.

By Matseleng Mogodi

This article was originally published by Real Estate Investor Magazine. 

How will this decision from the PPRA affect current property practitioners?

The great part has been the fact that more property practitioners have taken up-skilling themselves very seriously. For many years, one felt like finding some elixir or something that would encourage property practitioners to get on with it and become qualified. There's ample skill and knowledge in the industry, and this nonchalant attitude we have had as an industry has come to an end, and the best in property practitioners is coming through. It's important to note that even though one can be knowledgeable, when it is not accompanied by some form of qualification, it can negatively impact confidence and progress.

Opportunities come and go, and without a qualifying certificate, these opportunities do not wait, those that are ready to grasp these simply jump on and give it their best shot, without qualification, one tends to blame everyone and anything when the chips are down.

The continued need for property practitioners to educate themselves to avoid being sidelined by the regulatory body

We have seen and witnessed challenges at the PPRA when it comes to administrative issues and the out issuing of Fidelity Fund Certificates, which allow a property practitioner to operate legally. It has not helped to decry this weakness, because educating oneself is not for the benefit of someone else, or just to show a paper that one has passed, educating oneself extends to those that we surround ourselves with, and those that we offer our service to. Educating oneself gives one the confidence to hold their head up high and have a knowing that they are on the right track. Continuing to learn just adds to this mix, and increases self-confidence and the ability to impart knowledge to others. The Property Practitioners Regulatory Authority does not even have to sideline a property practitioner, the Code of Conduct and the Act do outline the do's and don'ts, and therefore anyone who joins the industry should know these, and there would be no experience of being sidelined or negatively impacted. The real estate industry has unfortunately been labeled a terrible industry, but we see more people fighting to get in and stay in, surely it can't be that bad.

Will this clamp down on bogus property practitioners who practice unlawfully and bring the industry's credibility into question?

This makes me think about computer viruses and internet scams. We have people that will always try to do the opposite and destroy what others are building. This is not innately for property, in most sectors, unlawful activity occurs. What this means though for property sector is that the number of bogus practitioners will come down, and the public will be more protected. Ironically, a lot of these so-called rogue agents, had become that way due to the ease of access into the industry, the entry barriers were quite low, the red tape, socio-economic challenges and just generally lack of foresight. Therefore, being pushed to qualify to be legitimate is something that has been welcomed by many, albeit the grim reality of having to study after many years. This will definitely improve the credibility of property practitioners whom some, may not have known what to do when things got really tough and they could not approach the Regulator for some assistance. The biggest and most applaudable from all this is the fact that the industry can now attract young people even more, because they would learn and look forward to building a bigger business for themselves.

How will this affect talent within the industry? Since some property practitioners are not qualified but know how to practice their skill in terms of selling property?

I have personally observed the enthusiasm and energy within the industry. Property practitioners who may not have believed in themselves are now confident and know they can make a difference and they can be self-sustainable. Even those having a strong aversion to property practitioners will be more comfortable doing business henceforth. A lot of clients have had a lot of distrust, but it has also been because of how some property practitioners have handled themselves in the past. With client confidence comes better business prospects, and good business encourages more professionalism and enhanced talent.

The responsibility placed on principals to ensure their agents up-skill themselves as well as agents taking adequate responsibility to ensure that they educate themselves

Owning a Real Estate company comes with massive responsibility. In the code of conduct, there's a clause that speaks about vicarious responsibility. This means that when a property practitioner commits an offence, the principal, by virtue of them being the employer also becomes liable. However, if the principal can show and prove that they have actually trained this property practitioner and despite any covert or malicious deeds being denied,  the principal can be absolved from the mess, and the property practitioner themselves would be criminally charged for their indiscretions. Going through the up-skilling process empowers property practitioners and validates their profession, thereby reducing the number of wrongful actions. Whether a property practitioner is qualified or not, they become personally liable, but through education, they realize the importance of knowing legislation and rules that govern their very existence as property practitioners.

What does this all mean for the public that is served by these property practitioners?

One of the very best outcomes of this new Act, for the consumer, is that before a buyer or tenant can continue with the property acquisition, the property practitioner is obliged to provide a Disclosure Document, which outlines the defects in the property. In the past, a lot of conflict occurred wherein the property practitioner would sometimes collude with the homeowner, and not fix defects, only to find that when the new buyer or tenant moves in, the property is in an abysmal state. Therefore, the Act ensures that the buyer and tenant, go into the agreement knowing all latent and patent defects within the property, so that they make informed decisions of whether to proceed or not. Should the property practitioner not disclose or carry out the exercise to know, then the property practitioner would be liable for the damages, but this will apply legally to matters concluded after the 1^st Feb 2022, unless if this document was already discussed and signed by both parties to the transaction.