The new Property Practitioners Act coming into effect on Tuesday will now require that property developers have a licence to trade and also aims to better regulate and transform the industry.
Previously, there was no legislative framework regulating the activities of property developers except that provided by the National Home Builders Registration Council. This body does not necessarily regulate the activities of property developers but prescribes building structural standards, said Joseph Sakoneka, CEO of the National Property Practitioners Council.
The new regulations include the requirement of a trust account of which an audited report needs to be submitted annually to the Property Practitioners Regulatory Authority. Also, practitioners may not enter into an agreement whereby a consumer is obliged or encouraged to use a specific conveyancer in any property transaction.
“This grim picture of an untransformed sector was going to persist without a legislative framework that guides efforts to change the property landscape in the country. Transformation is not only the authority’s strategic objective but rather a national imperative.” However, the organisation said challenges come with new acts and regulations, adding that the red tape involved may not be good for business.