Property & Real Estate Pack

All property practitioners (estate agents, managing agents, auctioneers, property developers dealing in property) must register with the Property Practitioners Regulatory Authority under the Property Practitioners Act 22 of 2019. Registration categories: intern property practitioner, property practitioner (candidate), full-status property practitioner, principal property practitioner. Applicants must pass the PPRA Professional Designation Examination (PDE) or hold an equivalent qualification recognised by PPRA. A valid Fidelity Fund Certificate (FFC) is required annually. Penalty: Performing property transactions without registration is a criminal offence — fine up to R1,000,000 or imprisonment up to 10 years (s65 of Act 22 of 2019).

The body corporate of a sectional title scheme must hold an annual general meeting within 60 days of the end of its financial year. At the AGM, the body corporate must: (a) present audited/reviewed financial statements; (b) approve the budget for the ensuing year; (c) elect/re-elect trustees; (d) appoint the managing agent (if any); (e) consider special levies if required. At least 14 days' written notice must be given to all members. A quorum of members holding 33.3% of the total participation quotas is required. Penalty: Failure to hold an AGM may result in a CSOS complaint or application to court for an order compelling compliance. Reference: s4(1) of STSMA 8 of 2011, PMR 17.

All community schemes (body corporates, homeowner associations, housing schemes for retired persons) must register with CSOS and pay the prescribed CSOS levy annually. The levy is calculated per unit/erf in the scheme and must be paid by the scheme executive (body corporate, HOA board). Current levy: approximately R40-R60 per unit per annum (as gazetted). The levy funds CSOS's dispute resolution services. Penalty: Failure to pay the CSOS levy may result in an administrative fine and inability to access CSOS dispute resolution services. Reference: s8-11 of Community Schemes Ombud Service Act 9 of 2011.

Property practitioners must conduct customer due diligence on all clients before or during the course of a business relationship or single transaction. CDD includes: (a) verify identity using an official document (SA ID, passport); (b) verify residential address; (c) for juristic persons — verify registration, identify beneficial owners holding 25% or more; (d) verify source of funds for transactions above R100,000; (e) conduct enhanced due diligence for domestic and foreign prominent influential persons (PIPs). Records must be retained for 5 years after the end of the business relationship. Penalty: Failure to conduct CDD — administrative sanctions or criminal prosecution. Reference: s21-21H of FIC Act 38 of 2001.

Estate agents and property practitioners are Schedule 1 Accountable Institutions under the Financial Intelligence Centre Act 38 of 2001. Each practice must develop, document, implement, and maintain a Risk Management and Compliance Programme (RMCP). The RMCP must include: (a) a money laundering/terrorist financing (ML/TF) risk assessment; (b) customer due diligence (CDD) policies and procedures; (c) record-keeping policies (retain for 5 years); (d) reporting obligations (STRs, CTRs, TPRs); (e) training programme for all staff; (f) compliance officer appointment. The RMCP must be reviewed and updated annually. Penalty: Non-compliance — administrative sanctions up to R50 million (s45C of FIC Act), or criminal prosecution (fine up to R100 million or imprisonment up to 15 years). Reference: s42 of FIC Act 38 of 2001, FIC Guidance Note 7.

Property practitioners must report suspicious or unusual transactions to the Financial Intelligence Centre within the prescribed period. A transaction is suspicious if: there are no reasonable business grounds; it involves unusually large cash amounts; the parties are evasive about identity or source of funds; or it may involve proceeds of crime, money laundering, or terror financing. Cash threshold reporting: all cash transactions of R24,999.99 or more must be reported. Terrorist property reporting: immediate reporting required. Tip-off prohibition: it is an offence to inform the client that an STR has been filed. Penalty: Failure to report — administrative sanctions up to R50 million; tipping off — fine up to R100 million or imprisonment up to 15 years. Reference: s29, s28, s28A of FIC Act 38 of 2001.

Before any property transfer can be registered at the Deeds Office, a rates clearance certificate must be obtained from the local municipality. This certifies that all property rates, taxes, and municipal service charges are paid up. The municipality has 60 days to issue the certificate from application. The certificate is valid for 120 days from date of issue. Property practitioners must ensure rates clearance is obtained during the transfer process. Failure to obtain rates clearance will delay or prevent transfer registration. Practitioners must also advise clients about ongoing rates obligations under the Municipal Property Rates Act 6 of 2004, including rates rebate entitlements for qualifying persons (pensioners, disabled persons). Reference: Municipal Property Rates Act 6 of 2004, s118 of Local Government: Municipal Systems Act 32 of 2000.

Any person who constructs a new home or converts a building for residential use must register as a home builder with the NHBRC and enrol each project before construction commences. Property developers and practitioners involved in new residential developments must ensure the builder is NHBRC-registered. Enrolment triggers the NHBRC 5-year structural warranty for the housing consumer. The NHBRC conducts stage inspections (foundation, wall plate, roof, completion). Penalty: Selling a home built by an unregistered builder or without NHBRC enrolment — fine up to R25,000 or imprisonment up to 12 months (s21 of Act 95 of 1998). Reference: s10-14 of Housing Consumers Protection Measures Act 95 of 1998.

Every registered property practitioner must hold a valid Fidelity Fund Certificate issued annually by the PPRA. The FFC is proof that the practitioner has contributed to the Property Practitioners Fidelity Fund, which protects consumers against theft of trust money. Applications open on 1 October for the following year. The FFC must be prominently displayed at the practitioner's place of business. Penalty: Operating without a valid FFC — fine up to R1,000,000 or imprisonment up to 10 years (s65). The practitioner may not perform any property transactions without a current FFC. Reference: s47-52 of Property Practitioners Act 22 of 2019.

Property practitioners who receive or hold trust money on behalf of clients must maintain a trust account at a registered bank in the Republic. The account must be designated as a trust account and kept separate from the practitioner's business account. Trust money must be deposited within one business day of receipt. Interest earned on trust monies accrues to the Fidelity Fund unless the amount exceeds the prescribed threshold and alternative arrangements are made in writing. An annual trust account audit must be conducted by a registered auditor and submitted to the PPRA within 4 months of the firm's financial year-end. Penalty: Failure to maintain proper trust accounts — deregistration and criminal prosecution. Misappropriation of trust funds — fine or imprisonment up to 15 years. Reference: s54-58 of Act 22 of 2019.

Landlords and managing agents must deposit a tenant's security deposit into an interest-bearing account with a financial institution within the Republic. Interest accrues to the tenant. Upon termination of the lease, the deposit plus interest must be refunded within 14 days if the landlord inspected the property, or 21 days if no inspection was conducted. The landlord may deduct only for: unpaid rent, damage beyond fair wear and tear, or breach of lease terms — with written itemisation. Penalty: Failure to comply — the tenant may lodge a complaint with the Rental Housing Tribunal. The Tribunal may order refund with interest and impose a fine. Reference: s5 of Rental Housing Act 50 of 1999 (as amended by Act 35 of 2014).

Landlords and managing agents must not engage in unfair practices as defined in the Rental Housing Act. Unfair practices include: changing locks without court order, disconnecting utilities to force eviction, unreasonable refusal to consent to assignment, discrimination based on race/gender/disability, unreasonable rent increases, failure to maintain the property in a habitable condition. Tenants have the right to lodge complaints with the Rental Housing Tribunal (provincial body) free of charge. The Tribunal may conduct mediation, issue rulings, and impose fines. Penalty: Contravention of a Tribunal ruling — fine up to R250,000 or imprisonment. Reference: s13-16 of Rental Housing Act 50 of 1999.

The body corporate (managed by trustees or a managing agent) must maintain proper financial records including: (a) a levy fund for day-to-day operational expenditure; (b) a reserve fund for major capital maintenance (minimum 10% of annual levy contribution or as determined by a 10-year maintenance plan); (c) proper books of account; (d) annual financial statements prepared within 4 months of year-end. A reserve fund plan must be based on a maintenance, repair, and replacement plan covering at least 10 years (PMR 22). Financial statements must be audited or independently reviewed unless exempt by special resolution. Penalty: Trustees may be personally liable for failure to maintain adequate reserves. Reference: s3(1)(b) STSMA, PMR 22, Prescribed Management Rules.

The Consumer Protection Act 68 of 2008 applies to lease agreements and property transactions where the landlord is acting in the ordinary course of business. Key requirements: (a) lease agreements must be in plain and understandable language; (b) tenant's right to cancel a fixed-term lease on 20 business days' notice with reasonable penalty (s14); (c) material defect disclosure — the seller/landlord must disclose known latent defects (voetstoots clause limited by CPA); (d) cooling-off period of 5 business days for direct marketing transactions; (e) prohibition on unfair/unreasonable contract terms; (f) mandatory written notice before any debit order changes. Penalty: National Consumer Tribunal may impose administrative fines up to 10% of annual turnover. Consumers may claim damages. Reference: Consumer Protection Act 68 of 2008, s14, s49, s55.

Property practitioners and managing agents process significant volumes of personal information (tenant applications, buyer/seller details, ID documents, financial records, marketing databases). Under POPIA, the practice must: (a) appoint an Information Officer and register with the Information Regulator; (b) obtain lawful justification for all processing (consent, contract, legal obligation); (c) issue privacy notices to tenants/buyers/sellers; (d) implement security safeguards to prevent data breaches; (e) respond to data subject access requests within 30 days; (f) notify the Information Regulator and affected persons of data breaches. Penalty: Administrative fine up to R10 million or imprisonment up to 10 years (s107 POPIA). Reference: Protection of Personal Information Act 4 of 2013.