PPRA warns against favouring HOAs

For several months, the Property Practitioners Regulatory Authority (PPRA) has warned estate agents engaging in undesirable business practices that they are in contravention of section 63 and regulation 35, read with section 62 of the Property Practitioners Act (PPA).

Section 63(1) of the PPA states that arrangements in which a Home Owners Association, for example, receives money or another form of reward for providing an advantage to one agent over the other or excluding another agent is an undesirable business practice.

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While several agents were reported, the PPRA’s investigation and enforcement department seemed to drag its heels in conducting actual investigations, leading many to assume the threat was empty.

That’s changing as the first volley of inspections was conducted at estate agencies marketing properties at an estate in Pretoria, with several agents receiving compliance notices and R5 000 fines.

“This undesirable practice is not only anti-competitive but untransformative, which is misaligned with the objectives and aims of our legislative mandate. We urge agents to stop participating in these practices, and for those who don’t, we will expand the scope of these investigations in the new year”, said PPRA acting CEO Thato Ramaili.

What can the PPRA do?
In the notice, the authority states that failure to cease these undesirable business practices constitutes a breach of the code of conduct applicable to property practitioners, which failure shall constitute sanctionable conduct as contemplated under section 62(1)(e).

Impose a fine
The PPRA adjudicators have powers bestowed on them as per section 30(7) of the Act to impose a fine or any order under the circumstances. The penalty in this case is R5 000 payable to the authority.

Revoke your FFC
Further note that the PPRA has, in terms of section 62(3) of the Act, the authority to withdraw your Fidelity Fund Certificate, impose a fine as determined by section 29(1)(a) of the Magistrate’s Court Act, 32 of 1944 and a reprimand after following a due process as outlined in sections 3 and 5 of the Promotion of Administrative Justice Act, 3 of 2000.

Name and shame
The PPRA is required by section 62(3)(c) of the Act to publish your name and transgressions on its website if you are found guilty of the sanctionable conduct as prescribed by section 62 of the Act.
“While a R5 000 fine might not seem much to certain agents, and they may not care whether their transgression is published on the PPRA website, what should be of serious concern is the fact that the PPRA adjudicators may well withdraw an agent’s FFC,” said Jan le Roux, the CE of Real Estate Business Owners of South Africa (Rebosa).

Prosecute HOAs
In instances where HOAs act as property practitioners, they also have to register as such and could be prosecuted for participation in undesirable practices in terms of the regulations.

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