The Property Practitioners Regulatory Authority (PPRA): What You Need to Know
Did you know that over R 9 billion worth of property transactions happens every year? The Property Practitioners Regulatory Authority (PPRA) is the body that regulates the property industry in South Africa. It plays a pivotal role in ensuring trust, fairness, and transparency in this property market.
The Property Practitioners Act, 2019, replaced the Estate Agency Affairs Act of 1976, introducing modernized rules. It expands the scope of regulation beyond estate agents to include auctioneers, bond originators, and property managers. Key changes include:
- Inclusivity: A focus on empowering historically disadvantaged groups through training and opportunities.
- Transparency: Mandatory disclosure of property defects and fair financial practices.
- Accountability: Broader powers for the PPRA to investigate complaints and impose penalties.
But what is the PPRA’s purpose? How does it impact the real estate industry?
What Does the PPRA Do?
The PPRA ensures compliance with the Property Practitioners Act, 2019. It requires property practitioners to meet high standards of professionalism and accountability. But who exactly qualifies as a property practitioner under the act?
What is a property practitioner?
What is a property practitioner?
The Property Practitioners Act (PPRA) defines a property practitioner as a person who deals with property and related matters in their ordinary course of business. If you’re making money through property owned by another person, you need to be a property practitioner. Therefore, if you’re doing any of the following, you need to register:
- Selling, purchasing, managing, or exhibiting for sale property or a business
- Leasing or hiring property or a business
- Collecting or receiving money payable for a lease
- Providing financing for the management, sale, or lease of property or a business
- Acting as an intermediary to conclude an agreement to sell or let property or a business
Who needs to register as a property practitioner?
The PPRA’s definition of a property practitioner is broader than the definition of an estate agent under the EAAA. It includes a wide range of people, such as:
- Auctioneers
- Estate agents
- Bond originators
- Bridging finance institutions
- Home inspectors
- Commercial property brokers
- Property developers
- Homeowner associations
- Property managers
- Companies that sell fractional title and timeshare
In 2022, over 44,000 practitioners registered with the PPRA—a 10% increase from the 40,000 registered in 2020. This growth reflects the authority’s broader definition of property practitioners.
All property practitioners must register with the PPRA. A valid Fidelity Fund Certificate (FFC) is a requirement and must be obtained annually.
What is the code of conduct of property practitioners?
The Property Practitioners Code of Conduct outlines the rules that property practitioners in South Africa must follow. It ensures professionalism, fairness, and transparency in property transactions. The code is part of the Property Practitioners Act, 2019, and all registered practitioners must comply. The key responsibilities of a property practitioner include:
| Responsibility | Description |
|---|---|
| Obtain a Fidelity Fund Certificate (FFC) | Renew annually to ensure legality of services provided. |
| Adhere to the Code of Conduct | Uphold honesty, transparency, and client confidentiality in all dealings. |
| Maintain Trust Accounts | Ensure that all client funds are kept in a separate, trust-designated account. |
| Avoid Conflicts of Interest | Declare any potential conflicts and act in the best interest of the client. |
| Disclose Property Defects | Provide full disclosure of any material defects in the property to buyers or tenants. |
Here are the key points:
- They must always act in the best interest of their clients
- Avoid conflict of interest
- Disclose all defects for property sales or rentals
- Act honestly, ethically and with integrity
- Confidentiality – client information must not be shared or leaked
- Fair marketing practices – advertisements must be truthful and not misleading.
- Proper handling of finances – Practitioners must keep client funds in a separate, trust-designated account.
- Compliance with legal obligations such as a valid FFC and cooperation with the PPRA during investigations and audits
- Continuous professional development – Practitioners must stay updated on industry laws, trends, and best practices by completing required training.
if a property practitioner is not living up to the code, a complaint can be filed. In 2023, the PPRA resolved over 1,500 complaints.
In addition to regulating practitioners, the PPRA empowers consumers by providing resources to understand their rights during property transactions. For example:
- Consumer awareness campaigns help identify red flags in property dealings, such as unregistered practitioners or hidden costs.
- The PPRA website offers downloadable guides on buying, selling, and leasing property.
- It runs first time buyers webinars and workshops to educate first-time buyers on navigating the market.
- Failure to adhere to the Code of Conduct can lead to disciplinary action by the PPRA. This could include fines, suspension, or being barred from practicing.
Complaints against a property practitioner
A complaint against a property practitioner can be filed on the PPRA website (link to online complaints here). At the bottom you will see a checkbox and a button. Once clicked a form will pop up for you to write your complaint. The PPRA provides a six-step complaint process:
- Compile relevant documentation: including contracts, emails, and evidence.
- Talk to the Practitioner: Try resolving the issue directly.
- File a Complaint: Submit forms on the PPRA website.
- Investigation: The PPRA reviews the case and may request more information.
- Decision: They determine outcomes, such as fines or suspensions.
- Communication: Decisions are shared with all parties.
This process resolves most cases within 90 days, ensuring fairness.
Conclusion
By regulating over R9 billion in annual property transactions, the PPRA protects consumers and strengthens industry trust. With education programs and strict enforcement, it ensures practitioners uphold high standards. For more details, visit the PPRA website or review the Property Practitioners Act, 2019.
The PPRA’s rigorous regulations and consumer education initiatives create a fair and transparent property market in South Africa. Whether you’re a seasoned investor or a first-time buyer, understanding these guidelines ensures smoother property transactions. For more insights, visit the PPRA website.
Happy investing!
