Has the Property Practitioners Bill missed the point?
Are consumers offered more protection?
Parliament passed the new Property Practitioners Bill on Tuesday 4th December 2018. This bill has been on the cards before 2011!
The Bill was supposed to finally provide buyers (consumers) more protection in the secondary housing market.
However, it appears the Minister of Human Settlements and his staff and the National Assembly totally missed the point!
Here is that portion of the Bill:
CHAPTER 10
CONSUMER PROTECTION
Mandatory disclosure form
- A property practitioner –
- may not accept a mandate unless the seller or lessor of the property has provided him or her with a fully completed and signed mandatory disclosure in the prescribed form; and
- must provide a copy of the completed mandatory disclosure form to a prospective purchaser or lessee who intends to make an offer for the purchase or lease of a property.
- The completed mandatory disclosure form signed by all relevant parties must be attached to any agreement for the sale or lease of property and forms an integral part of that agreement, but if such a disclosure form was not completed, signed or attached, the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser.
- A property practitioner who fails to comply with subsection (1) may be held liable by any affected consumer.
- Nothing in this section prevents the Authority from taking action against a property practitioner or imposing an appropriate sanction.
- Nothing in this section prevents a consumer, for his or her own account, from undertaking a private property inspection to confirm the state of the property before finalising the transaction.
This is the protection this Bill offers to buyers (consumers) who buy properties from sellers.
So what has changed?
Not much at all as far as the home buyer is concerned!
All of the items, 1 to 5, have been in operation for many years now! Furthermore, the majority of estate agencies and estate agents have been applying all five.
The Bill has changed the following:
- An estate agent now becomes a “Property Practitioner “.
- The EAAB (Estate Agency Affairs Board) becomes the “Property Practitioners Regulatory Authority”.
- The establishment of a Property Practitioners Ombud.
So where does this leave buyers (consumers)?
Still where he or she was before!
The voetstoots clause still protects the seller and disadvantages the buyer.
Consumers (home buyers) are mostly unaware of the fact that home inspectors exist in South Africa. Inspectors can advise them on the condition of the properties they may wish to buy. Most home buyers (consumers) are not aware that they do have a choice to have a home inspection or not!
A clause in the Offer to Purchase contract should advise consumers (buyers) that they have a choice of a home inspection!
Come on, you people in the Department of Human Settlements and the National Assembly! You have advised the Property Practitioners that home buyers have a choice to have a home inspection.
Property Practitioners do not encourage home inspections! Most still believe a home inspection on a property will mean that they will lose the sale! Homebuyers will not know they have a choice unless it becomes mandatory to include it in the offer to purchase!
Homebuyers are not going to read the Bill! The financial institutions who loan home buyers the money don’t care! They are not going to advise their clients that they have a choice!
What about making consumers aware that they have a choice! Is so difficult to implement?
NOTE:
Since the above was published the Department of Human Settlements has published the PROPERTY PRACTITIONERS REGULATIONS, 2020.
In the proposed regulations – 36. MANDATORY DISCLOSURE the regulation provide the protection for property buyers called the IMMOVABLE PROPERTY CONDITION REPORT which must form part of the Offer to Purchase which gives the buyer the choice to employ an expert to inspect the property:
Taken in part from the regulation in:
IMMOVABLE PROPERTY CONDITION REPORT:
1 Disclaimer
This condition report concerns the immovable property situated at [insert deeds office and physical description] (the “Property”). This report does not constitute a guarantee or warranty of any kind by the owner of the Property or by the property practitioners representing that owner in any transaction. This report should, therefore, not be regarded as a substitute for any inspections or warranties that prospective purchasers may wish to obtain prior to concluding an agreement of sale in respect of the Property.
The “report” mentioned above is the seller’s disclosure, not an inspection report!
It then goes on to say the following:
IMMOVABLE PROPERTY CONDITION REPORT
9 Buyer’s acknowledgement
The prospective buyer acknowledges that he/she has been informed that professional expertise and/or technical skill and knowledge may be required to detect defects in, and non-compliance aspects concerning the property.
The prospective buyer acknowledges receipt of a copy of this statement.
Note: the underlining above is not part of the regulations. It is there to emphasize that part of the regulation on this page!
At last, the regulations will actually make the buyer aware and give the buyer a choice to have an inspection or not!
Therefore, well done Minister Sisulu and your team at the Department of Human Settlements!
You heeded our written representations!
Inspected Once, Inspected Right!®
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