New property bill and its implications

Speculation was rife this week as to what the new Property Practitioners Bill 2016 will include, with many estate agencies and organisations raising concerns it could over-regulate the industry with a dire outcome.

The cabinet on Wednesday announced that the bill would be gazetted for public comment (probably in the next few weeks). It repeals the Estate Agency Affairs Act which is over 40 years old.

The cabinet said it "responds to the changing market conditions and dynamics, strives to create an enabling environment to enhance economic activity within the real estate market".

"It also addresses the need to enhance compliance and enforcement, as well as to ensure transformation in the sector and to regulate the conduct and behaviour of property practitioners."

Real Estate Business Owners of South Africa (Rebosa) chief executive Jan le Roux, says "as an industry we are happy this is happening. The current act is way out of date and there were many things that needed to be addressed."

One of the concerns Le Roux raised was the possibility of hard and fast compliance regulations that could stymie transformation goals.

Adrian Goslett, regional director and chief executive of RE/MAX of Southern Africa, said the bill should bring about positive change in the industry. "It will also force real estate brands to embrace transformation and bring about a demographic of real estate professionals that are more in line with that of the country."

Goslett says the EAAB had revealed that the bill would deal with several aspects, such as the transformation of the property sector, job creation, enforcing tax compliance, giving disciplinary hearing rulings the status of a judgment in a civil court and executing it accordingly.

Since the bill had not yet been gazetted, no one could respond on specifics. However there were some concerns.

Lew Geffen, chairman of Lew Geffen Sotheby?s International Realty, warned there could be "deleterious repercussions" to over-regulating the industry. "The statement from the cabinet this week says the bill ?strives to create an enabling environment to enhance economic activity within the real estate market?, but property is market-driven.

"...You can?t manufacture sale stock out of nothing and you can?t artificially stimulate job creation in the industry by legislating quotas or adding another link in the sale process, such as home inspectors, because the mandatory cost burden to consumers is already extremely onerous. It has also been stated previously that the main aim of the bill is to protect consumers.

"While this is indeed laudable, it seems superfluous because effective legislation already exists in the form of the Consumer Protection Act."

Samuel Seeff, chairman of Seeff, said while the new bill was welcomed, "we understand from the provisional drafts there are some elements we believe need to be refined..."

| via Pretoria News |

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