Articles

Two new Acts which regulate the Property Industry

The State President passed two Bills into law which will impact significantly on the property industry.

The effect of the Electronic Deeds Registration Systems Act can be summarised as follows:

The object of the Act is to improve security in the registration system, simplify it and speed up the registration process.

The Bill is divided into the following clauses:

  • Clause 1 provides for definitions.

(b)       Clause 2 provides for the development, establishment and maintenance of the e-DRS by the Chief Registrar of Deeds. The Chief Registrar of Deeds is empowered to issue practice and procedure directives for, amongst others, the functional requirements of the e-DRS; technical specifications for the e-DRS and the operation of the e-DRS.

(c)       Clause 3 provides for the validity of deeds and documents. A deed or document generated, registered and executed electronically and any other registered or executed deed or document scanned or otherwise incorporated into the e-DRS by electronic means is for all purposes deemed to be the only original and valid record.

(d)       Clause 4 requires any user of the electronic deeds registration authorised by the regulations to be registered in the manner and under the conditions as may be directed by the Chief Registrar of Deeds.

(e)       Clause 5 empowers the Minister to make regulations, on recommendation by the Regulation Boards established in terms of the Deeds Registries Act, relating to, amongst others, the procedures for the electronic lodgement of deeds or documents; procedures for electronic record storing by deeds registries; and the manner of identification of the person who prepares, executes, lodges, registers or stores any deed or document required or permitted to be prepared, executed, lodged, registered or stored in any deeds registry.

(f)        Clause 6 provides for transitional provisions relating to the continuation, by a Registrar of Deeds, of the registration, execution and filing of deeds and documents in a deeds registry until the e-DRS and related provisions or regulations are in place.

It is apparent, however, that implementation of this new procedure will take time as the Registrar of Deeds must still regulate how the process is to be implemented and until he has done so the current procedure will continue.

The Property Practitioners Act has now been signed into law. This Act replaces the Estate Agency Affairs Act 112/1976.

The Act not only regulates the conduct of Estate Agents, but a wider body of people termed  “Property Practitioners“. It applies to marketing, promotion, managing, sale, letting, financing and purchase of immovable property.

The Act introduces a regulating authority which replaces the Estate Agency Affairs Board.

The Act is also designed to transform the industry and open it up to Previously Disadvantage Individuals  and Chapter 4 of the Act deals with the Property Sector Transformation Code

The Act covers a substantial number of property related activities and the definition of a “Property Practitioner” illustrates this.

A Property Practitioner

  • means any natural or juristic person who or which for the acquisition of gain on his, her or its own account or in partnership, in any manner holds himself, herself or itself out as a person who or which, directly or indirectly, on the instructions of or on behalf of any other person—

(i)        by auction or otherwise sells, purchases, manages or publicly exhibits for sale property or any business undertaking or negotiates in connection therewith or canvasses or undertakes or offers to canvas a seller or purchaser in respect thereof;

(ii)       lets or hires or publicly exhibits for hire property or any business undertaking by electronic or any other means or negotiates in connection therewith or canvasses or undertakes or offers to canvass a lessee or lessor in respect thereof;

(iii)      collects or receives any monies payable on account of a lease of a property or a business undertaking;

(iv)      provides, procures, facilitates, secures or otherwise obtains or markets financing for or in connection with the management, sale or lease of a property or a business undertaking, including a provider of bridging finance and a bond broker, but excluding any person contemplated in the definition of ‘‘financial institution’’ in section 1 of the Financial Services Board Act, 1990 (Act No. 97 of 1990);

(v)       in any other way acts or provides services as intermediary or facilitator with the primary purpose to, or to attempt to effect the conclusion of an agreement to sell and purchase, or hire or let, as the case may be, a property or business undertaking, including, if performing the acts mentioned in this subparagraph, a home ownership association, but does not include—

(aa)    a person who does not do so in the ordinary course of business;

(bb)    where the person is a natural person and that person in the ordinary course of business offers a property for sale which belongs to him or her in his or her personal capacity; 2

(cc)     an attorney or candidate attorney as defined in section 1 of the Attorneys Act, 1979 (Act No. 53 of 1979); or

(dd)    a sheriff as defined in section 1 of the Sheriffs Act, 1986 (Act No. 90 of 1986), when he or she performs any functions contemplated in paragraph (a) of this definition, irrespective of whether or not he or she has been ordered by a court of law to do so; or

(vi)      renders any other service specified by the Minister on the recommendation of the Board from time to time by notice in the Gazette;

  • includes any person who sells, by auction or otherwise, or markets, promotes or advertises any part, unit or section of, or rights or shares, including time share and fractional ownership, in a property or property development;
  • includes any person who for remuneration manages a property on behalf of another;
  • includes a trust in respect of which the trustee, for the acquisition of gain on the account of the trust, directly or indirectly in any manner holds out that it is a business which, on the instruction of or on behalf of any other person, performs any act referred to in paragraph (a);
  • for the purposes of sections 34, 46, 48, 59, 60, 61 and 65 includes—
  • any director of a company or a member of a close corporation who is a property practitioner as defined in paragraph (a);
  • any person who is employed by a property practitioner as envisaged in paragraph (a) and performs on his, her or its behalf any act referred to in subparagraph (i), (ii), (iv), (v) or (vi) of that paragraph;
  • any trustee of a trust which is a property practitioner as envisaged in paragraph (d);
  • any person who is employed by a property practitioner as envisaged in paragraph (b) and performs on its behalf any act referred to in subparagraph (i), (ii), (iv), (v) or (vi) of paragraph (a); and
  • any person who is employed by a property practitioner contemplated in paragraph (a) or (b) to manage, supervise or control the day-to-day operations of the business of that property practitioner;
  • includes any person who is employed by or renders services to an attorney or a professional company as defined in section 1 of the Attorneys Act, 1979, other than an attorney or candidate attorney, and whose duties consist wholly or primarily of the performance of any act referred to in subparagraph (I), (ii), (iii), (iv), (v) or (vi) of paragraph (a), on behalf of such attorney or professional company whose actions will be specifically covered by the Attorneys’ Fidelity Fund and not the Property Practitioners Fidelity Fund;
  • for the purposes of section 61 and any regulation made under section 70, includes any person who was a property practitioner at the time when he or she was guilty of any act or omission which allegedly constitutes sanctionable conduct referred to in section 62,

but does not include an attorney who, on his own account or as a partner in a firm of attorneys or as a member of a professional company, as defined in section 1 of the Attorneys Act, 1979, or a candidate attorney as defined in that section, who performs any act referred to in paragraph (a), in the course of and in the name of and from the premises of such attorney’s or professional company’s practice, provided that such an act may not be performed—

  • in partnership with any person other than a partner in the practice of that attorney as defined in section 1 of the Attorneys Act, 1979; or
  • (ii) through the medium of or as a director of a company other than such professional company, and ‘‘advertise’’ for the purposes of this definition does not include advertising in compliance with the provisions of any other law;

Article by Peter Bowes , Conveyancer at BLC Attorneys

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