Property Practitioner

Until recently, there has always been a clear distinction between a property practitioner and a real estate agent. Where the Real Estate Agent (UK, SA), or Property Realtor (US) were primary involved with the renting or selling of commercial or residential property and acting as an intermediary negotiator between the willing buyer and willing seller, a property practitioner is mostly involved with property management and collecting of monies for property related expenses, especially for large complexes, apartments and estates.

The Property Practitioners Act (PPA)

However, for South Africa this has all recently changed in the last year, with the introduction of the new Property Practitioners Act, or PPA. The new Property Practitioners Act, which has gradually come into effect since 2022, intends to replace the current Estate Agency Affairs Act of 1976. Its intention is to provide consumer protection and to help standardize the dealings of all property practitioners.

Since the new legislation has come into effect, there appears to be some blurred areas, as to what the difference between the estate agent and property practitioner is.

One such difference is that estate agents can now become property practitioners, when they obtain the official Real Estate NQF, Level 4 National Certificate, as well as pass the PDE Level 4 exam, within 2 years. When this certificate is obtained, the estate agent then achieves the Property Practitioner in Real Estate (PPRE) status in South Africa.

This means that the Estate Agent or Realtor is also a Property Practitioner, which includes a much wider range of duties and responsibilities, including all of the duties they previously had as an estate agent.

Another notable change is that it is now mandatory for a seller to disclose all property defects that they are aware of.

What Is the Primary Purpose of the Property Practitioner?

With the introduction of the new Property Practitioners Act, this role has become much broader than it was before and it still includes all of the previous responsibilities; however the primary and most important role of the property practitioner is to uphold and protect the consumers interests.

What Is A Full Status Property Practitioner?

A Full Status Property Practitioner, also known as Principal Property Practitioner must have passed the NQF Level 5 National Certificate, in addition to the above mentioned NQF Level 4 certificate.

These qualifications are intended for any person, realtor or estate agent who wishes to be involved in the commercial or residential real estate industry. It proves that you have the knowledge, skills and competence to provide the kind of consumer protection that is required.

The role of the property practitioner can sometimes be over-whelming, when dealing with multiple buyers, sellers and properties at the same time. Agents and practitioners must both have a thorough understanding of the real estate market, the area or neighborhood in which they operate, as well as have good knowledge on the property they are selling. This is because they will have to answer many questions from potential buyers, regarding the property history, its features and the area it is located in. It is therefore of the essence that realtors and property practitioners respond immediately to buyer’s questions and requests.

With the introduction of the new Property Practitioners Act, which replaces the Estate Agency Affairs Act of 1976, an estate agent can assume the role of property practitioner when they obtain the NQF Level 4 National Certificate. Likewise, a Principal Agent can take on the role of Principal Property Practitioner when they pass the NQF Level 5 exam.

Although sectional title living can be rewarding it also presents challenges, particularly when residents break the rules. In many sectional title developments there are rules which govern certain conduct such as excessive noise, littering or damage to common property. When residents break a rule, a fine can be imposed. Or can it?

According to the Paddocks Club, a specialist sectional title and HOA training firm, neither the Sectional Titles Act nor the prescribed rules (the governing legislation) provide for the imposition of fines or penalties on apparent transgressors of a scheme’s rules. Therefore the default position is ‘no’.

However, it is possible for a body corporate to impose legally enforceable fines if the body corporate has properly adopted a carefully drafted rule which provides for fining owners and residents.

The procedure:

Carryn Melissa Durham who heads up Paddocks’ Private Consulting Division outlines the procedure which should be followed in respect of fines.

According to Durham, complainants should be required to lodge a written complaint or incident report to the trustees or managing agent. The owner and tenant should then be given a written notice of the particulars of the complaint in writing and a reasonable opportunity to respond to the complaint. The transgressor must be given sufficient information and adequate detail on the nature of the conduct as well as the specific sections of the Act or rules that were allegedly breached. The offender must be warned that if he or she persists with such conduct or contravention, a fine will be imposed.

If the owner or occupier persists with the conduct, the trustees should send a second notice pointing out that the contravention is continuing or has been repeated and invite the person to a trustee meeting at which the person can explain or defend their actions. The notice time of this meeting should be long enough for the person to prepare a defence. The rule must therefore include an opportunity and process for a hearing for the transgressor. The trustees must also take into account any representations received or made by the owner.

At the meeting the transgressor must be allowed to state their side of the matter, call witnesses in their support and cross examine any witnesses the executives might have to the transgression. The trustees should then discuss the evidence in private and decide whether or not to impose a fine.

Draft it Properly!

Paddocks points out that for a fining rule to be enforceable, it must be carefully drafted (preferably by an attorney who is well versed in sectional title law) and passed by the required consensus level i.e. either a special resolution for a conduct rule or unanimous resolution for a management rule and it must be filed at the deeds office.

Durham adds that the procedure that must be followed in imposing fines must be reasonably, fairly and equally applied to all owners and residents. She adds that it is important to note that an immediate fine cannot be imposed without following due process and that the fine imposed cannot be added to the contribution which an owner is obliged to pay in terms of section 37 (1) of the Act and claimed by the trustees as part of the monthly instalments payable by the owner.

For more information, insights and commentary regarding fines and their enforceability in sectional title schemes follow these links:

http://www.paddocks.co.za/paddocks-press-newsletter/the-validity-of-a-penalty-rule-and-enforceability-of-the-fine-implementation/

http://paddocksblog.com/2013/06/03/are-fines-in-sectional-title-schemes-legal/

http://www.paddocks.co.za/paddocks-press-newsletter/making-fines-stick-in-community-schemes/

SOURCE: www.privateproperty.co.za

While it is not compulsory for trustees in sectional title schemes to appoint a managing agent, and many small schemes do manage to run their scheme effectively without the help of one, it is generally recommended if the scheme has more than ten units that they do hire a managing agent rather than trying to do all the work themselves, says Mandi Hanekom, operations manager for Propell.

In medium to large sectional title schemes, the workload involved in managing the financial and day to day affairs can be overwhelming for the trustees, particularly since they most likely would be working during the day at their “everyday” jobs, she said.

“The fact that this work has to be done without compensation also makes a good argument for hiring a managing agent, as the agent will have to bear most of the work load.”

The Prescribed Management Rules state that, should a managing agent be hired, that they be appointed by written contract for an initial period of time (usually a year) and the notice period from either party would be one month’s notice, which is given in writing.

The managing agent’s duties must be specified in the contract of appointment, and these will usually include controlling, managing and administration of the common property, and any other obligations to public or local authorities on behalf of the section owners. Usually, the managing agents will also be tasked with collecting the levies each month.

“Managing agents are not to be confused with caretakers of buildings, however,” said Hanekom. “While some managing agents offer a day to day maintenance function, these are usually at an extra cost as they will then outsource any repair or maintenance work to their contractors and oversee the work done.”

When the decision is made to hire a managing agent, there are a few key things to check with them. The first would be to ask whether they hold separate trust accounts for each sectional title scheme. This is recommended as there is transparency with this type of arrangement, each transaction should be for that scheme only and should able to be checked by the trustees at any time they should require this, said Hanekom.

Managing agents are governed by the Estate Agency Affairs Board and should hold a Fidelity Fund Certificate, and the trustees are within their rights to ask for this. This is to ensure that the body corporate is insured against any theft of money, as managing agents deal with large sums in collected lev ies and payments having to be made each month, she said.

“Generally, if the administration and management work is done by a professional in this field and by someone who only does this work, the performance of the body corporate should improve and the financial situation of the scheme should be healthy and Propell, when enlisted to assist with any of their sectional title financial solutions, would work hand in hand with the managing agent to achieve this”, said Hanekom.

SOURCE: www.propertytribe.co.za