Navigating the challenges property practitioners face with the PPRA

The property industry in South Africa is a cornerstone of economic growth, providing countless individuals and businesses with opportunities to invest and thrive. However, property practitioners – whether representing large agencies or operating as independent agents – face mounting challenges in navigating the requirements of the Property Practitioners Regulatory Authority (PPRA). This post highlights the five key issues affecting property practitioners with practical solutions to mitigate these difficulties.

1. Over-regulation of Property Practitioners

While regulation is necessary to ensure transparency and the protection of South African citizens, many property practitioners argue that the PPRA’s stringent compliance requirements place an undue burden on their operations. Over-regulation stifles efficiency, particularly for smaller agencies that lack the resources to manage complex administrative tasks.

Solutions:

• Engage with regulatory bodies such as the National Property Practitioners Council (NPPC), the Real Estate Business Owners of South Africa (REBOSA), and the Institute of Estate Agents of South Africa (IEASA) to seek clarity and advocate for regulatory reform.
• Consult with legal advisors specialising in property law to ensure compliance while minimising your administrative burden.

2. Delays in Fidelity Fund Certificate (FFC) applications

Property practitioners must hold a valid Fidelity Fund Certificate (FFC) to legally operate. However, practitioners face prolonged delays in obtaining or renewing these certificates, resulting in disruptions to their business operations.

Solutions:

• Ensure you have met the submission requirements. Double-check that your application is complete and includes all required documents (ID, proof of payment, qualifications, etc.). Missing information is a common cause of delays – ensure every required field is covered.
• Request a Temporary Confirmation Letter. Ask the PPRA for a formal acknowledgment of your submitted application. This can be used as proof of compliance while waiting for the official FFC.
• If you have paid the required fees, request a receipt and written confirmation of your pending status.
• Seek support from professional bodies like REBOSA, they often assist members with escalations and liaise directly with the PPRA.

3. Exemption application delays for amending the Mandatory Disclosure Form

Another area of concern involves delays in granting exemption applications for amending the Mandatory Disclosure Form (MDF). These delays create bottlenecks in property transactions, causing frustration for both practitioners and their clients.

Solutions:

• Confirm that you are using the current version of the Mandatory Disclosure Form that is in line with the prescribed form provided in the Property Practitioners Act (PPA). TPN’s Mandatory Disclosure Form is drafted exactly in line with the PPA and can be downloaded from the TPN LeasePack here.
• Ensure all required documents and information are included in the initial submission to avoid delays caused by missing details and documents. TPN suggests using a checklist to verify the application is thorough and meets all PPRA guidelines before submission.
• Contact industry organisations like REBOSA to assist in escalating delayed applications on behalf of their members.

4. Inconsistent communication and lack of clarity from the PPRA

One of the most pressing challenges is the inconsistency and lack of clear communication from the PPRA. Practitioners frequently report difficulty obtaining accurate information or receiving conflicting interpretations of regulatory requirements.

Solutions:

• Document and confirm all your communication. Always request written confirmation (via email) of any advice or interpretations provided by the PPRA to avoid relying on verbal guidance. Keep a detailed record of all correspondence, including names, dates, and specific advice received, to reference in case of conflicting information.
• Use industry networks for clarification. Collaborate with regulatory bodies like IEASA or REBOSA which often have direct communication channels with the PPRA and can provide accurate interpretations. Share experiences with other property practitioners to identify common challenges and successful approaches.

5. Macro and microeconomic considerations in the property industry

At a high level, property practitioners must juggle both macro and microeconomic factors when conducting business. Macro considerations refer to broader, external influences that affect the property market, such as inflation, interest rates, and government policies. Rising interest rates, for instance, impact affordability and reduce buyer demand, while ongoing economic uncertainty can increase risk aversion.

Micro considerations are factors specific to individual businesses and local markets. These include property location, consumer behaviour, and compliance with the PPRA’s regulations.

Solution:

• Stay informed about economic trends through industry publications and property market analyses to anticipate shifts in your business. TPN provides various reports that allow you to assess the industry regularly, such as the Vacancy Survey Report, Tenant Survey Report, and Rental Monitor. To get clarity on the latest trends in the market, download your TPN Report here.

Written by: Rowan Terry, Senior Legal Counsel, TPN from MRI Software