Property Practitioners Bill: proposed amendments

Human Settlements, Water and Sanitation

14 November 2018
Chairperson: Ms N Mafu (ANC)
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Meeting Summary

The Committee was taken though the cleaned A-List of the Property Practitioners Bill to see whether the proposed amendments that had been agreed on by Members the previous day had been amended accordingly.

Members agreed that what had been read to them was what they had proposed as amendments.

The Chairperson stated that now that the A-List had been approved, the drafters and the team would insert it into the Bill. It would come back to the Committee the following week on Tuesday so that Members could review and adopt it. Afterwards, the Bill would go to the National Council of Provinces (NCOP), which would decide on their own processes, depending on how much work the Committee had done.

Meeting report

Property Practitioners Bill

Adv Khwezi Ngwenya, Chief Director: Legal Services, National Department of Human Settlements (NDHS), took the Members through the proposed amendments to the Property Practitioners Bill.

Clause 1

On page 6 of the Bill after line 5, insert the following definition of accounting records:

“"accounting records" -

(a)        means information in written or electronic form concerning the trust accounts of the property practitioner as required in terms of this Act, including but not limited to, records of all transactions involving trust monies, general and subsidiary ledgers and other documents and books used in the administration of the trust accounts; and

(b)        in relation to the property practitioner’s business as such, means information in written or electronic form concerning the financial affairs of the business as required in terms of this Act or any other Act that may be applicable to the business of the property practitioner, including but not limited to, records of assets, liabilities, income and expenses, general and subsidiary ledgers and other documents and books used in the preparation of financial statements of the business.”

On the issue of “principal”, also on page 6, it had been agreed to add:

“principal” means a property practitioner who is a director of a company, member of a close corporation, trustee of a trust, partner of a partnership or owner of sole proprietorship that operates as a property practitioner;”

On page 6, from line 39, it had been decided to omit the definitions of "Ombud" and "Ombud's office," which was not a major issue.

On page 7, in lines 44 and 46, the key word was to omit "or business undertaking".

Also on page 7, in line 49, it was agreed to omit “in sale of execution."  There were also a series of technical drafting amendments involving omissions and substitutions on pages 7 and 8.

On page 8, after line 17, the following definition of “trust money” would be inserted:

"trust money" means --

(a)        “money entrusted to a property practitioner in his or her capacity as a property practitioner;

(b)        “money collected or received by a property practitioner and payable in respect of or on account of any act referred to in subparagraph (i), (ii), (iii) or (iv) of paragraph (a) of the definition of a "property practitioner;

(c)        “any other money, including insurance premiums, collected or received by a property practitioner and payable in respect of any immovable property, business undertaking or contract for the building or erection of any improvements on immovable property.”

Clause 6

On page 9, in line 55, it was agreed to omit "estate agents" and to substitute "property practitioners," and to do the same in line 56, and on page 10, in line 4.

Clause 7

On page 10, in line 25, after “in,” Members agreed to insert “rural and land reform,”. On page 10, from line 27, Members agreed to omit "Rural Development and Land Reform" and to substitute "Trade and Industry". This had been a specific request from Mr K Sithole (IFP) so as to include someone with expertise in rural land development.

Clause 8

On page 11, in line 7, after "citizen," it was agreed to insert "or a permanent resident, and who is not ordinarily resident in the Republic."

Chapter 4

The chapter had been rejected. That was the old chapter 4.

The Chairperson joked that Adv Khwezi was trying to give Members a heart attack by saying the Chapter had been rejected. The Members shared in laughter.

Clause 21

This clause would now read:

             (1)       “The Authority must, , open a Property Sector Transformation Fund into which grants contemplated in section 38 are paid.”

The Chairperson said “within six months of its establishment”  sounded fabulous. Also, on page 2, it should include people with disabilities.

             (2)       “The Minister may prescribe measures to promote economic transformation by facilitating the accessibility of finance for property ownership, property development and investment in order to enable meaningful participation of historically disadvantaged individuals including women, youth and people with disabilities.

            (3)        “The Authority must utilise the Property Sector Transformation Fund in such a manner as may be prescribed, which may include the following transformation and empowerment programmes:

(a)        “Principalisation Programme, to promote Black owned firms and principals.

(b)        “Regularisation Programme, to promote and encourage participation of the historically disadvantaged due to non-compliance.

(c)        “Consumer Awareness Programme, to promote awareness of property transanctions and business undertaking.

(d)        “Work Readiness Programme, to promote and enhance participation of the historically disadvantaged in the property sector.

            (4)        “The Authority must in consultation with the services Sector Education and Training Authority (SETA) develop special dispensation for the training and development of the historically disadvantaged, which must include recognition of prior learning.”

Clause 22

This reads:

            (1)        “The Property Sector Research Centre is hereby established.

            (2)        “The Property Sector Research Centre must conduct market research in partnership with the National Research Foundation and institutions of higher learning.”

In here, the institutions of higher learning are included, so that they are not excluded.

The next changes on page 7 were new clauses.

Clause 26

There was an issue that had been raised that after lodging a complaint, it would go to mediation then to adjudication, so it was proposed a time limit be included, so it now stated:

            (1)        “Any person may, in the prescribed form, lodge a complaint with the Authority against a property practitioner in respect of financing, marketing, management, letting, hiring, sale or purchase of property.

            (2)        “The Authority must, in writing, within seven days acknowledge receipt thereof and inform the complainant of the case number assigned to the complaint.

            (3)        “After receiving the complaint, the Authority may require the complainant to submit further information or documentation in relation to the complaint.”

Clause 28

Members had commented on the unfriendly part under Sub-section 5, so “informally” had been omitted and also been excluded everywhere it appeared in the text. Now it reads:

28.        “(1)       If --

(a)        a person on whom a compliance notice has been served in accordance with section 26 -

(i)         fails to comply with this Act as demanded in the compliance notice;

(ii)         fails to timeously comply with the compliance notice; or

(iii)        fails to timeously pay the fine determined by the Authority; or

(b)        mediation has been attempted in accordance with section 27 but has failed;

(c)        the serious nature of the complaint and the contravention in question warrants,

the Authority must cause a notice of adjudication to be served on the person concerned as prescribed.

            (2)        “The Authority must appoint an independent legally qualified person as an adjudicator to conduct an adjudication of a complaint in terms of this section, who for purposes of this section is referred to as the ‘adjudicator.’

            (3)        “The Authority may upon application from the adjudicator on good grounds appoint independent assessors to assist him or her.

            (4)        “Within 14 days of the appointment of the adjudicator, the adjudicator must -

(a)        give notice of the adjudication as prescribed to all parties concerned; and

(b)        set the matter down for hearing within 60 days.

            (5)        “The adjudication must be held expeditiously, subject to upholding the rules of natural justice and in accordance with prescribed procedure.

            (6)       

(a)        “The adjudicator must upon conclusion of the adjudication make a determination as to whether the complaint is upheld or not.

(b)        “If the complaint is upheld, the adjudicator must make an order which in the circumstances is appropriate, and such an order has the status of an order of a magistrate’s court and must be executed accordingly.

            (7)        “The order contemplated in subsection (6) may include—

(a)        a fine which may not exceed the amount determined by the Minister of Justice for the purposes of section 29(1)(a) of the Magistrates’ Courts Act, 1944 (Act No. 32 of 1944);

(b)        if appropriate in the circumstances, an order that the Authority pays not more than 80 percent of the fine as a compensation award to the complainant; and

(c)        any other appropriate order under the circumstances.

            (8)        “The adjudicator must upon finalisation of the adjudication process provide written reasons for any of his or her determinations or orders.

            (9)        “The Authority must keep the records of all hearings, including the order made and written reasons provided by the adjudicator, as prescribed.

            (10)       “Notwithstanding the provisions of subsection (2), property practitioners may consent to refer an inter-property practitioners’ dispute for adjudication by the Authority, and the Authority may provide such service on a cost recovery basis.

            (11)       Subject to the provisions of sub-section (7)(b), any fine paid pursuant to an order made by the adjudicator accrues to the Fund.”

Clause 29

29.        (1)        “Any person who is aggrieved by the decision of the adjudicator in terms of section 28 may appeal against such decision to the Adjudication Appeal Committee in the prescribed format.

            (2)        “The Authority must, within 14 days of the date on which it received the notice of appeal in terms of subsection (1), establish an Adjudication Appeal Committee consisting of three independent suitably qualified persons to hear the appeal.

            (3)        “Within 14 days of the appointment of the Adjudication Appeal Committee, the Adjudication Appeal Committee must --

(a)        give notice of the appeal as prescribed to all parties concerned; and

(b)        set the matter down for hearing within 60 days.

(4)        “The appeal must be held expeditiously, subject to upholding the rules of natural justice and in accordance with prescribed procedure.

            (5)       

(a)        “The Adjudication Appeal Committee must upon conclusion of the appeal make a determination as to whether the complaint is upheld or not.

(b)        “If the complaint is upheld, the Adjudication Appeal Committee must make an order which in the circumstances is appropriate, and such an order has the status of an order of a magistrate’s court and must be executed accordingly.

            (6)        “The Adjudication Appeal Committee must upon finalisation of the appeal process provide written reasons for any of its determinations or orders.

            (7)        “The Authority must keep the records of all appeals, including the order made and written reasons provided by the Adjudication Appeal Committee, as prescribed.”

Clause 46

The issue here was on to omit “annually” and substitute it with “three years.” After deliberation, it had been decided that it should be left to the Minister to prescribe the periods, and there were provisions for this.

The Chairperson wanted to find out whether from a drafting point of view, it did not exclude those who wanted to pay annually.

Adv Khwezi replied that it did not.

The Chairperson wanted to find out whether the regulations would be clear on this.

Adv Khwezi replied that they would

Clause 47

On page 25, in line 49, Members had agreed to omit “is in possession of” and to substitute “has been issued with”. On page 25, in line 52, they had agreed to omit “is also in possession of” and to substitute “has also been issued with”. On page 26, in line 8, there had been agreement to omit “be in possession of the” and to substitute “have been issued with a”.

Clause 49

On page 26, from line 51, it was agreed to omit subparagraph (viii).

Clause 53

On page 30, from line 17, Members had agreed to omit subsection (8).

Clause 54

On page 30, in line 60, it was agreed to omit “10” and to substitute “five”. Also on page 31, in line 19, “in one of the official languages” would be omitted.

Clause 55

On page 31, in line 61, after “payment,” it was decided to insert: “Provided that where all relevant conditions have been met, the conveyancer must pay the remuneration and other monies.”

Clause 62

On page 34, from line 42, Members agreed to omit sub-section (3).

Clause 64

On page 35, in line 13, it was agreed to omit “personally,” while on page 35, from line 19,it was agreed to omit sub-section (4).

Clause 66

On page 35, in line 52, it was agreed to omit “private”.

Clause 67

On page 36, in line 1, it was agreed to omit “Language of agreements,” and to substitute “Agreement” while on page 36, from line 4, members agreed to omit “in an official language that is requested by the purchaser or the lessee.”

Clause 69

This Clause was rejected (the original was dealing with transformation).

Clause 76

This clause dealt with schedules. In line 35, it was agreed to omit “and amendment”; on page 38, in line 36, to omit “laws mentioned in Schedule 1 are” and to substitute “Estate Agents Affairs Act, 1976 (Act No. 112 of 1976);” and on page 38, from line 36, to omit “or amended to the extent set out in the third column of that Schedule”.

Schedule 1

This schedule was rejected.

Long Title

Adv Khwezi referred to the Bill of yesterday, in the Long Title on page 2, there was a new insertion. From the fifth line, Members agreed to omit “to provide for the establishment, appointment, powers and functions of the Property Practitioner’s Ombud Office,” and to substitute “to provide for transformation of the property practitioners sector; to provide for the establishment of the transformation fund and establishment of the research centre on transformation;”

He said that that was all that Members had agreed to.

The Chairperson said that something was missing.

Adv Khwezi replied that on page 61, they had looked at the provision and had retained “franchising.” It stated:

61         (1)        “A franchisee property practitioner may not carry on business under the name of a franchise unless he, she or it personally is the holder of a Fidelity Fund certificate.

            (2)        “A franchisee property practitioner must disclose clearly and unambiguously in all his, her or its written communication, advertising and marketing materials that  he, she or it operates in terms of a franchise agreement, as well as the name of the  franchisor.

            (3)        “The Authority may withdraw the Fidelity Fund certificate of a franchisee property practitioner who carries on business in contravention of subsection (1) or (2).

            (4)        “The Authority may hold the franchisor responsible for prohibited or sanctionable conduct of the franchisee to the extent that the franchisee is responsible in terms of this Act.”

The Chairperson added that the Committee had decided not to omit the issue of franchising. Most of the important issues were in the new chapter on transformation, which she was happy with.

Mr P Khoarai (ANC), Mr M Bara (DA), Ms P Mabe (ANC), Mr M Wolramans (ANC) and Mr Sithole all agreed they were satisified with the changes.

The Chairperson said the drafters and the team would insert the changes into the Bill, so the Bill on Tuesday would have an A-List for the Committee to adopt. Members would still have time to look at it.

Mr Bara asked if there was a window to amend it, in case someone picked up something on it.

The Chairperson responded that Members had next week.

Ms Mabe wanted to find out if it would be going to the National Council of Provinces (NCOP).

The Chairperson replied that it had to go to the NCOP, which would decide their own process, depending on how much work the Committee had done.

The meeting was adjourned.

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