PROPERTY PRACTITIONERS ACT: Transformation of the Real Estate Industry

“May your choices reflect your hopes, not your fears” (Nelson Mandela)

Transformation is still a term that sits uneasy with certain groups of people, especially people so set in their ways that any concept of change is seen as a disturbance and a distraction.  The truth is, it is all about how such efforts for transformation are conveyed to the masses.

In terms of transformation of the Real Estate Industry, the relevant authorities have found a way to incorporate transformational requirements together with other important provisions pertaining to the industry.

By doing it in such a manner, the concept of transformation remains a major purpose of the Act, but it is greatly supported by other provisions such as educational requirements, definitions of practitioners and creating a new board of authority to regulate the industry.

The following points should be focused on, in context, when interpreting the PPA:

Transformation: Transformation of the industry is encouraged in terms of Chapter 4 of the PPA.  An extract from the Act is as follows;

Property Sector Transformation  

• The Property Sector Transformation Charter Code as amended from time to time applies to all property practitioners.
• When procuring property related goods and services, all organs of state must utilise the services of property practitioners who comply with the broad-based black economic empowerment and employment equity legislation and policies. 
• The Authority must from time to time...
  • implement and assess measures to progressively promote an inclusive and integrated property sector;  
  • implement appropriate measures and assess the state of transformation within the property sector;  
  • create such mechanisms for the continuous monitoring and evaluation of the sector performance on the transformation imperatives and granting of incentives as may be prescribed; and  
  • introduce measures to be implemented, which may include incubation and capacity building programmes to redress the imbalances of the past.

Property Practitioners Regulatory Authority: Chapter 1 of the PPA effectively replaces the old familiar ‘Estate Agency Affairs Board’, with the newly established ‘Property Practitioners Regulatory Authority’.  Although the names of the two bodies differ, the main objectives remain the same in terms of their regulating functions.

Establishment of Property Practitioners Regulatory Authority 

• There is hereby established a juristic person to be known as the Property Practitioners Regulatory Authority.
• The Authority is a National Public Entity subject to the Public Finance Management Act, 1999 (Act No. 1 of 1999).
• The Authority is governed and acts through a Board known as the Board of the Authority.
• The Authority must provide regulatory mechanisms in respect of the financing, marketing, managing, letting, hiring, sale, property consumer education and purchase of property, and may do all that is necessary or expedient to achieve.

Defining a Property Practitioner: The definition of a Property Practitioner is notably extended in the PPA.  So much so that 2 pages of the 84 page document is dedicated to define any and all circumstances when a person can be classified as a Property Practitioner.  Some of the most important inclusions in this list are;

• any person who collects or receives any monies payable on account of a lease of a property or a business undertaking;
• any person who provides, procures, facilitates, secures or otherwise obtains or markets financing for or in connection with the management, sale or lease of a property or a business undertaking, including a provider of bridging finance and a bond broker, but excluding any person contemplated in the definition of ‘‘financial institution’’ in section 1 of the Financial Services Board Act, 1990 (Act No. 97 of 1990);
• includes any person who sells, by auction or otherwise, or markets, promotes or advertises any part, unit or section of, or rights or shares, including time share and fractional ownership, in a property or property development;
• includes any person who for remuneration manages a property on behalf of another;
• includes a trust in respect of which the trustee, for the acquisition of gain on the account of the trust, directly or indirectly in any manner holds out that it is a business which, on the instruction of or on behalf of any other person, performs any act classified as a property transaction.
  

Educational requirements and qualifications: The educational requirements for Property Practitioners have been independently regulated alongside the Estate Agency Affairs Act, in terms of the Standard of Training of Estate Agents Regulations, which was implemented on 15 July 2008.

For any person who thinks that a career in Real Estate is the ‘easy way out’ or ‘easy money’ as the term is often used, please consider the following when choosing Real Estate as an occupation.  

The following is more or less a guideline to the educational and administrative requirements to be eligible to earn commission on property transactions (rentals or sales);

• Initial registration with the regulatory body: Estate Agency Affairs Board, being replaced by the Property Practitioners Regulatory Authority (afterwhich the candidate will receive an Intern Fidelity Fund Certificate).
• Completing a 12-month internship under the direct supervision of a mentor (a full status agent as registered with the regulatory body).
• Completing a Portfolio of Evidence, under supervision of a mentor.
• Completing an Intern Logbook, to be submitted to the regulatory body after completion of internship.
• Completing a NQF 4 course in Real Estate (National Qualification Framework, Level 4) and subsequent obtaining of the NQF 4 qualification.
• Registering and writing of the PDE 4 (Professional Designation Exam, Level 4).
• Once this exam is passed, the candidate will have the formal qualification of NQF4: Professional Practitioner in Real Estate (PPRE), and a Full-status FFC will be issued.
• All PPRE’s are then required to maintain their qualification by means of the annual CPD program (Continuous Professional Development program).
• All PPRE’s are also required to renew their FFC each year (the Fidelity Fund Certificate). 

For PPRE’s who wish to take their business a step further, they can continue to complete their NQF 5 qualification, and subsequently write the PDE 5.  If an agent succeeds with this qualification, their designation will upgrade to NQF 5: Master Practitioner in Real Estate.

The Real Estate industry is on track to becoming a fully regulated and professional career option, with the necessary educational requirements in place to ensure a dependable and reliant service to the public.  Buying and selling a home is after-all one of the biggest transactions a person concludes in ones’ life – and it deserves to be managed by professionals.


Bronwyn Scholtz
Candidate Legal Practitioner (LLB)
Property Practitioner (NQF 4: Real Estate)