Property Practitioners Bill: Negotiating Mandates & Department Response
NCOP Health and Social Services
19 March 2019
Chairperson: Ms L Dlamini (ANC, Mpumalanga)
The Select Committee meeting was called to receive provincial negotiating mandates for the Property Practitioners Bill [B21B-2018]. Members, with the mandate of their provinces, voted unanimously in favour of the Bill but several provinces had queries, required clarification or required amendments to the Bill.
Officials from the Department of Human Settlements responded to some of the issues by eight provinces as the Western Cape mandate had only been received that morning. Some issues overlapped, and, in particular, there were general concerns about the expectations of the conduct of partners in a transaction, exemptions from the Bill, appointment and disqualification of board members, research centres and the concerns raised by a stakeholder about the Bill.
Members felt that there was some confusion on the part of the Department’s legal team and did not seem to have a full and proper sense of the issues that Members had raised. The Parliamentary Legal Advisors and State Law Advisor seemed to have differing views from the Department’s legal team. Members noted a number of inadequacies, in particular on the stated timeframe for the implementation of the Bill, on its accordance with the Constitution, the interests of the stakeholders, and practitioner rights.
Committee Members concurred that the discussion on the concerns about the Bill should be postponed until 25 March 2019, both so that Members could better familiarise themselves with the Bill and so that the Department was more able to adequately respond, in writing, to the concerns raised.
Consideration of the Committee Legacy Report was delayed as the Committee had not concluded its business with the Property Practitioners Bill. Consideration of the Annual Report was delayed owing to technical issues in printing the Report.
The Chairperson informed the Select Committee that the Director-General of the Department of Human Settlements (DHS) was running late. The Committee would wait for his arrival. Subsequently, the meeting began ten minutes after the scheduled time.
The Chairperson reminded Members that they were dealing with the negotiating mandates for the Property Practitioners Bill. She indicated that the Committee had received mandates from all nine provinces. She thanked Members for those mandates.
She noted an apology from Minister NomaIndiya Mfeketo, with no reason given, but she assumed that she was attending Cabinet. She commented that the meeting was to be the penultimate meeting as a Committee. She noted that since Ms Mfeketo had become a Minister, she had had no time to attend Committee meetings. If she were in the Minister’s shoes, she would privatise the Committee as it simply did not see regular attendance by the Minister. One wondered what pressing issues the Minister had to attend to that resulted in her frequently being unable to attend. The Chairperson had noted that to raise the concerns of the Committee. She also noted that Ministers from other departments attended meetings, where necessary.
The Chairperson determined that the Committee go straight onto the next item, where Members would present their negotiating mandate on the Bill. Votes would follow in alphabetical order, starting with the Eastern Cape. Should Members decide to amend the Bill as a Committee, they would not be able to finalise those amendments in that meeting.
Ms P Samka-Mququ (ANC; Eastern Cape) said that the Eastern Cape voted in favour of the Property Practitioners Bill [B21B-2018].
Ms M Moshodi (ANC; Free State) voted in favour of the Property Practitioners Bill [B21B-2018] on the mandate of the Free State. There was amendments list which she was not going to read out at that time.
Ms L Zwane (ANC; Gauteng) voted in favour of the Property Practitioners Bill [B21B-2018], on the mandate of Gauteng.
Ms Zwane also voted in favour of the Property Practitioners Bill [B21B-2018], on the mandate of KwaZulu-Natal.
Ms T Mampuru (ANC; Limpopo) voted in favour of the Property Practitioners Bill [B21B-2018], by the mandate of Limpopo. Issues were raised but the Department had been able to answer all the questions.
The Chairperson voted in favour of the Property Practitioners Bill [B21B-2018] on the mandate of Mpumalanga.
Ms Moshodi voted in favour of the Property Practitioners Bill [B21B-2018], on the mandate of the Northern Cape, since Mr Stock (ANC) (Northern Cape) had yet arrived.
Mr C Hattingh (DA; North West Province) voted in favour of the Property Practitioners Bill [B21B-2018], on the mandate of the North West Province. He added that it should be noted that in voting in favour, the approval was subject to the consideration of proposed amendments. It was not a bracket approval.
Ms T Mpambo-Sibhukwana (DA; Western Cape) voted in favour of the Property Practitioners Bill [B21B-2018], on the mandate of the Western Cape. She added that she supported the Bill with amendments, which she was not going to read there and then.
The Chairperson thanked the Members. She noted that Mr Stock had just arrived and asked if he would like to say anything, but he did not wish to. The Chairperson announced that the Department would provide a brief overview of key aspects of the Bill in response to issues raised by Members, since the Department had been given the opportunity to look through the concerns that Members had submitted.
Mr Mbulelo Tshangana, Director-General, DHS, thanked Members for their comments, adding that it was proper to take the time to respond to them.
Mr Khwezi Ngwenya, Legal Adviser, DHS, announced that he would take the Committee through the Department’s responses to Members. He drew Members’ attention to page two of the Department’s response on issues relating to specific elements of the Bill. The Department had attended public hearings in various provinces and had tried to respond to them. The Bill provided an all-inclusive definition of property in section 14(g). In respect of section 4.1, exemption from application of the Bill, exemptions would be provided for and clearly prescribed.
Section 11 of the Bill contained a provision for the disqualification of board members. This section had been written in compliance with the corporate governance. Any disqualification would be managed in a very transparent manner. Section 35 provided a timeframe during which a person could launch a claim if one wanted to lodge a claim against the fund. Section 57.1(b) concerned buying a practice, where the Bill made provision for the purchaser’s choosing.
Section 8 concerned disqualification of the board members. The Bill provided for a number of instances in which a board member could be disqualified. Section 13.3 dealt with the meetings of the board. A majority of members were required at a board meeting. The Bill provided for the board to not have more meetings than necessary.
The property developer would also be included in the Bill, to the extent that property developers engage in and facilitate the property transaction. Anyone involved in the transaction was covered in terms of the definition of the Bill.
The Bill provided for a number of exemptions. If there were any issues that counted against a developer, one could apply to the Minister for an exemption.
Section 4 provided for ways in which a property practitioner could apply for an exemption. The Bill focused on the code of conduct and consumer protection.
Section 9 provided for exemption from the Act.
Section 10 specifically provided for consumer protection.
Section 22 dealt with the research sector. It provided for the scope of the research centre. The intent was to broaden the scope of the research methodology that would be used. The Bill would be implemented from an informed perspective, in conjunction with institutes of higher learning.
Section 27 concerned the validity of the validity fund certificate. It made provision for three years before expiry.
Section 47 required all directors to have Fidelity Fund Certificates (FFC) certificates.
Section 49 dealt with the provisions for FFC. If practitioners had done what was required to issue an FFC, and the Department could not issue one in time due to inefficiency, an FFC would be issued after a certain period of time regardless of prescribed time periods.
Section 61 dealt with the code of conduct expected. Practitioners should give consumers the code of conduct. Legislation provided more for how practitioners should conduct their business. Failure to conduct themselves in that manner was a sanctionable offence. Section 64 should provide for that more adequately. All those issues were dealt with. Subsection 64.3 dealt with advanced consumer protection.
Exclusion of non-SA citizens was provided for under section 49. Section 20 dealt with the transformation sector and outlined the role of the municipality. More clarity in terms of the mechanisms for doing so would be provided. Normally the regulations were promulgated by the legislative.
In terms of section 7, board member appointment, the Minister was required to call for applications and have open interviews for appointments to the board. Subsection 7.2 made provisions for compensation of skills required. Different forms of expertise were noted to that end.
Some provinces did not raise any specific issues. The Department had had an opportunity to attend public hearings across the country, and the primary issue, it had been found, was the speed of transformation.
The Department was lacking the Western Cape’s amendments, but the Department would endeavour to assist honourable Members on issues that would be raised in future. When officials had compiled the document, they had not received the Western Cape mandate and could not be included in the document.
Section 22 on the establishment of the research centre did not include where and to what end the centre was to be established.
REBOSA (Real Estate Business Owners of South Africa) had submitted a number of other issues and the Department had responded that it would take them into consideration. On achieving transformation objectives, the time and cost involved in achieving the FCC certificate was problematic as there were certain regulations that people needed to comply with.
The Chairperson thanked the speaker. She asked if the responses had included responses to public comments, which the Committee had called for.
Mr Tshangana replied that the Department had, in fact, focused on the comments by the provinces.
Mr Ngwenya replied that the hearings included submissions on issues raised by the provinces. Particular issues had been raised in common with the public, the Department was responding to both.
Mr Tshangana added that he had met the presidents of various entities and had involved the Department in their concerns. They were very much strategic partners in the implementation of the Bill.
The Parliamentary Legal Adviser added that the Department had tried not to fall foul of the property developers. Regarding public submissions, in respect of section 22, some clarity was needed in terms of the mandate. The Department had been diligent in assessing its references.
Mr Gideon Hoon, Principal State Law Advisor for the Office of the Chief State Law Advisor, added that he agreed with the treatment of references.
The Parliamentary Legal Adviser added that the reference to the legal practice could be further clarified.
The Chairperson commented that the Committee should be coming together as a legal team with one voice, as the Committee did not want the Bill to come back because the Committee had been wrongly advised by the legal team. She felt some degree of concern about that.
Mr M Khawula (IFP; KwaZulu-Natal) wanted some clarity on the process and timeframe of the implementation of the Bill. The Department was making the mistake that, having dealt with public issues, it could assume that Members had clarity on those issues. Members of the Select Committee had a different mandate from a Portfolio Committee. The Members still needed responses to those 18 inputs.
Mr Hattingh commented that it was not correct to state that all provinces supported the Bill. Support was conditional on their concerns being met. The issues raised had to be listened to. In addition, there was no response to the Free State questions about clauses 7(b) and 11. There was no response to some of the substantive issues raised by the Western Cape. It was not clear if the Committee had had an answer to that submission. Did the legal advisors, or did they not, agree to those changes? Should they just say that it was technical and brush it aside? In general, a lot of issues had not been properly addressed.
Mr Hattingh stated that the property practitioner definition was also very important, and it had to be given more consideration. He also wanted to read the presentation attached by the Western Cape. The RABOSA concern had not been properly addressed. In addition, in sub-section 48.2 every director and practitioner should be registered and have an FFC. If a company director committed fraud or embezzlement and his certificate was revoked, then the others in the company could not do anything. It could be quite damaging for business. Going back to Gauteng’s concern regarding sub-section 64.3, the Department’s response was not easy to understand. Could the Committee have some clarity?
Several people were having private conversations. Mr Hattingh asked if he ought to wait for some of the meetings to conclude.
The Chairperson called for order.
Mr Hattingh continued that if a property practitioner went into a house and stole something, the principal was, nonetheless, responsible. Whatever the practitioners did, the principal remained responsible. That was strict liability and challengeable in the Constitutional Court.
Ms Zwane wanted to know about the Bill in terms of Public Works. That Department would operate as a property practitioner but also as a trust legislator. What would happen in relation to other property practitioners? She also wanted to speak to the issue of exclusion.
The Chairperson interjected. She was not sure that that was pertinent.
Ms Samka-Mququ made a remark in her mother tongue.
The Chairperson commented that she had had the intention to advance issues from her province at the meeting but affirmed that it was important that the Committee looked at the issues arising from other provinces first. In the negotiating mandates, she assumed she was negotiating for her province. The Western Cape document had only been received that morning, so it was practically impossible to have its concerns in the response document. That said, Members would have to advise her on how to deal with those issues and, in particular, with issues raised by stakeholders. Members had the responses, but they were not technical people, and so needed some advice from the legal team. The Committee had applied for a meeting on the Bill.
The Chairperson asked how RABOSA would assist in the implementation of the Bill. But how? They were players and had interests. That was a concern for her. The Department would have to advise on how it wanted to implement the Bill in a fair and impartial way. On the issue of the criteria, when many people wanted to enter the industry, how did one implement transformation with the criteria currently in the Bill? Should the criteria be relaxed to allow people to enter in the industry? She added that she had participated in the public hearings in her province, and people were complaining that their houses had been taken. Consumer awareness was critical.
Ms Samka-Mququ supported the move for the Bill to be deferred to Monday. She did not see the State Law Advisor assisting them. The role of the State Law Advisor was to ensure that the Bill was in accordance with the Constitution and was properly drafted. He had to certify a Bill as being consistent with the Constitution: that was the role of the State Law Advisor. She proposed that the Committee postponed the meeting until Monday 25th March to ensure that Members had time to go through the Bill and be properly advised.
The Chairperson commented that they did indeed need to be advised. When the Committee had a meeting, Members needed to ensure that they knew which issues they agreed and disagreed with.
The Parliamentary Legal Advisor added that there were some issues that she needed to discuss with the Department, but that they had not managed to get together to discuss them. Some preparations had been made, but not in writing. Her own understanding was that the Department was advising the Committee.
The Chairperson stated that the Department could not verbally advise the Committee. The advice had to be in writing. Members needed to refer to documents.
Adv Hoon maintained that the Office of the State Law Advisor had certified the Bill as introduced. It would take a backseat until there was clarity on what amendments were being proposed. He had only received some responses and concerns that morning. To that end, he added that several issues raised were semantic issues since there was not always adherence to definitions, for instance. He could clarify those issues.
Ms Moshodi insisted that Members try to do their work intelligently. She proposed that the Committee deferred the meeting until Monday 25 March 2019, to go away and do the work and then come back with a proper sense of things.
The Chairperson emphasised that she would not be deferring the present meeting. That meeting had to be continued properly, as far as was possible. A later meeting would be convened to discuss the remaining issues at hand on Monday. Could the Department agree that it would respond properly in writing? Final mandates needed to be provided by that Friday. She recommended that the Legal Advisors also met.
Mr Tshangana announced that the Department would meet immediately after the meeting and go through the comments made by the Western Cape. Responding to Mr Hattingh, he said that the Department had been engaging with RABOSA and he would demonstrate which areas had been raised by them. He recognised that the Department could not make undue provisions for exclusions or exemptions, so that was something that was important to clarify. Blanket exclusions could be problematic, so they had to carefully determine when and where exemptions were appropriate. Whether they all liked it or not, they had to work with RABOSA because the organisation was in the industry. The reality was that the sector was untransformed. The Department did not want to make too many exclusions at the expense of transformation. In the past, the requirements for becoming an agent were not particularly stringent. Some had said that that should be dealt with through regulations, not through the Bill. It was important to raise that point.
Mr Hattingh commented that definitions and legislation needed to be clear in order for people to consider it. There should be clear and precise responses to each of the concerns tabled. Claims had been made that the Bill was anti-transformation. If one did not have money, one was kept out of the industry. The Bill put an obligation on a person to have a trust account. There had to be an explanation as to why the Department was against transformation. He added that he did not wish to go in detail at that time, but he would want a response, in writing, to those issues.
The Chairperson commented that she expected responses in writing by Wednesday 20 March 2019. The Committee would be meeting to discuss the finalised version of the Bill on Monday 25 March. It was clear what the Department needed to do. That was non-negotiable. She also asked the State Law Advisor for input. She thanked the officials from the Department who were then excused. Members still had one issue to deal with.
There was a 10-minute break.
The Chairperson then announced that there would be a consideration of the Committee’s Legacy Report and of its Annual Report. There would also be the approval of minutes from previous meetings. She made a request to finalise the Legacy Report the following week.
Draft minutes of meetings for 21 December 2018, 29 January 2019, 19 February 2019, 26 February 2019 and 5 March 2019 were approved by Members without amendments.
The Chairperson asked if Members had copies of the Annual Report to review. It transpired that Members had not been issued with copies of the report prior to the meeting since the Committee Secretary had not printed them in time.
The Secretary said that that the Annual Report had no content when she had tried to access it the previous evening. She had been unable to open the digital copy of the document.
The Chairperson informed her that she should not have prepared the report the night before and that she should be more diligent. The Chairperson informed Members that they would have to consider the report next week.
The meeting was adjourned.
- Property Practitioners Bill [B21B-2018]
- Property Practitioners Bill [B21A-2018]
- Real Estate Business Owners of South Africa, “Rebosa” input
- Negotiating Mandates on PP Bill by Provinces Report
- Limpopo: Final Mandate
- Eastern Cape Final Mandate
- Free State Final Mandate
- Gauteng Final Mandate
- KwaZulu-Natal Final Mandate
- Mpumalanga Final Mandate
- Northern Cape Final Mandate
- North West Final Mandate
Dlamini, Ms L
Hattingh, Mr C
Khawula, Mr M
Labuschagne, Ms C
Mampuru, Ms T
Moshodi, Ms ML
Mpambo-Sibhukwana, Ms T
Samka, Ms P
Stock, Mr D
Zwane, Ms L
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