EAAB CEO says act ushers in new era
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EAAB CEO says act ushers in new era
The President signed the Property Practitioners Act into law on 3 October, but he hasn't proclaimed a date yet when it will go into effect. This gives the regulator time to draw up the regulations that must accompany the new act and prescribe how it will be implemented.
Mamodupi Mohlala-Mulaudzi, CEO of the EAAB, says there are key critical areas in the Act that need to be looked at immediately with specific mention of transformation, the licencing regime, public awareness and the structural issues of the Board. She said that the Board intends to engage with the property sector on these matters over the next couple of months.
She said this on Friday afternoon during a panel discussion on the impact of the new Act on the real estate industry which took place at the Real Estate Industry Summit (REIS 2019) attended by hundreds of agents and industry role players in Sandton, Johannesburg. Also on the panel were Vuyiswa Mutshekwane, CEO of the South African Institute of Black Property Practitioners and Jan le Roux, CE of Rebosa.
"The Property Practitioners Act is a very critical and important piece of legislation that has been 30 years in the making. We at the EAAB are excited about it, it ushers in a new era for us," Mohlala-Mulaudzi said. She explained that the new Act will broaden the scope of the regulator to include more property-related professions. Previously only estate agents were regulated by this body, but under the new legislation a greater scope of property-related professionals, including bond originators and property developers will be regulated by the new Property Practitioners Regulatory Authority. "That will enable us to have a seamless licencing regime across the board," says Mulaudzi.
"Most importantly the new Act ushers in a new era of transformation," said Mulaudzi. The Act will require a property practitioner to be in possession of a BEE certificate to qualify for a Fidelity Fund Certificate. The Act also makes provision for a Transformation Fund and a Research Centre. "Transformation will happen," added Mulaudzi.Other innovations include that the new authority will also be mandated to perform inspections, "We've got our teeth back in relation to search and seizure," Mulaudzi said. The current annual licencing renewal cycle will also be extended into a three-year cycle.
Industry concerns about new Act
Mutshekwane said while excited about the focus on transformation in the new legislation she remains cautiously optimistic. A 'box ticking' approach with compliance legislation hasn't worked in the past to effect transformation. While applauding the BEE requirement set by the new Act, she would like to see that transformation efforts go deeper than just achieving better BEE statistics. She expressed the hope that the research centre will contribute to gaining insight in the blockages that up to now has kept the industry from becoming as transformed as it should. Mutshekwane said she wants to see transformation efforts translate into black-owned entities better better capacitated.
Le Roux said the Act could have done more towards promoting the transformation of the industry. He called the Act a mere renovation of the old legislation that he said should not have been signed in it's current format due to several oversights that will be hard to amend now. "It's a bit of a wasted effort that I hope the Minister and the department can make more palatable through regulations," he said.
Le Roux said the Act does make some positive changes to the current legislation, for example that the minister can declare certain practices unlawful such as for example the accreditation fees demanded by security estates - a practice that is hampering transformation by excluding some Le Roux said.
He added that the Transformation Fund is another positive development as capacity building requires funding. However, he cautioned that the new Act needs to look at setting formulas in place to regulate the Fund's contributions from the Fidelity Fund.
Another concern raised by the panel was whether the new act showed cognition of technological developments in the property industry with specific mention of digital property platforms and tech-driven disruptors. "Is this legislation future-proofing us to where we are going?" asked Mutshekwane. Le Roux said there's nothing in the Act that takes cognisance of technological developments. Mohlala-Molaudzi responded that she believes the door isn't closed to including regulatory measures with regards to tech-driven role players and she believes that it can still be addressed during the process of drafting regulations.
From the audience concerns were raised about the government's capacity to implement the regulations of the new Act properly. Past experience has shown that oft times the industry has excellent legislation, but proper enforcement is lacking.
In conclusion, all agreed that there is a lot of work that still needs to be done before the Act can be declared ready to be enacted.
Property Professional asked the EAAB to comment on the process going forward with relation to the drafting of the regulations and engaging with industry on this matter. We will keep you posted on this.