All about you and your FFC
This is #8 in our short series of instalments on all the new things to bear in mind with the coming into operation of the Property Practitioners Act on 1 February 2022.
This instalment summarises all the provisions that apply to Fidelity Fund Certificates.
- Every property practitioner is required to apply to the Authority for a Fidelity Fund certificate (‘FFC’) every three years. In the relevant year that the current certificate expires, the application must be submitted by no later than 31 October.
- The application must be accompanied by payment of the prescribed fee (R2,340 from 2020, escalating annually in accordance with the CPI). Late applications will attract a penalty.
- LOOK & FEEL
- The Authority will categorise property practitioners across the different industries within the real estate sector, and your industry will be reflected on the FFC. (The industry categorisation has not yet been done as at date hereof.)
- If an estate agent or agency practices in more than one industry, this will be indicated on the FFC.
- APPLICATION PROCESS
The regulations indicate that applications will be submitted online, via the Authority’s website. The Authority has not yet launched a new portal and the (now defunct) Estate Agency Affairs Board’s website is still operational.
- BE VISIBLE
- It is a requirement that the FFC must be prominently displayed in every place of business where the estate agent or agency conducts property transactions. Make sure to download and print your valid certificate from the website and put it up where everyone can see it!
- make sure that letterheads and marketing material reflect the prescribed sentence, namely “registered with the PPRA”; and
- that the prescribed clause guaranteeing that the agent or agency is in possession of a valid Fidelity Fund certificate appears on all agreements relating to property transactions, i.e., as follows: “[Name of property practitioner] hereby warrants the validity of his/her/its Fidelity Fund certificate as at the date of signature of this Agreement”.
- WHO MUST HAVE CERTIFICATES?
Section 48 of the Act contains a clear prohibition on any person or entity to act as a property practitioner unless he/she/it has been issued with a Fidelity Fund certificate and –
- in the case of a juristic property practitioner, every director, member or trustee of the property practitioner has been issued with a Fidelity Fund certificate (as may be applicable); and
- if the property practitioner employs any other person as a property practitioner, that employee has also been issued with a valid Fidelity Fund certificate.
- NON COMPLIANCE
- An agent who contravenes or fails to comply with this requirement will be guilty of an offence.
- Such agent must also repay any money received to the Authority which, in turn, will pay it to a seller or landlord concerned, provided the latter brings an application to the Authority for the return of the money within three years. (Failing this, the money becomes the property of the Fidelity Fund.)
Conveyancers appointed as ‘police force’
- Conveyancers are prohibited from paying any remuneration or other money to an estate agent unless that agent and agency has provided the conveyancer with a copy of his/her/its FFC that was valid during the time that the transaction was concluded and at the time of making payment.
- WHO IS DISQUALIFIED FROM BEING ISSUED WITH A FCC?Someone who:
- is not a South African citizen and a lawful resident of South Africa;
- has been found guilty of contravening the Act, the Estate Agency Affairs Act or any similar legislation in any other jurisdiction within the preceding five years;
- has been found in any civil or criminal proceedings by a court of law (locally or elsewhere) to have acted fraudulently, dishonestly, unprofessionally, dishonourably, or in breach of a fiduciary duty, or any other offence carrying a sentence of imprisonment without the option of a fine;
- is of unsound mind;
- is an unrehabilitated insolvent;
- has been dismissed from a position of trust at any time within the preceding five years by reason of improper conduct; has been prohibited by any legislation (enacted in South Africa or elsewhere) from practising as a property practitioner or occupying a position of trust;
- has been found guilty by a competent tribunal or court of unfairly differentiating or excluding (directly or indirectly) anyone on the basis of race, gender, sex, pregnancy, marital status, ethnicity, sexual orientation, disability, age, religion, language, birth, or other prohibited ground;
- is not in possession of a valid tax certificate;
- is not in possession of a valid BBBEE certificate;
- intends carrying on business as a property practitioner under a trade name identical or confusingly similar to the trade name of another property practitioner (who has already been issued with a FFC or such certificate has lapsed or been withdrawn); or
- is a director or member of a property practitioner which has had its FFC withdrawn by the Authority.
For questions and assistance, contact us on firstname.lastname@example.org