1. What the Property Practitioners Act is

The Property Practitioners Act 22 of 2019 is the law that regulates the property sector in South Africa. It was signed in 2019 and came into force on 1 February 2022. It repealed the Estate Agency Affairs Act of 1976.

The Act is run by the Property Practitioners Regulatory Authority (PPRA). The PPRA issues Fidelity Fund certificates, keeps the register of practitioners and enforces the rules.

The Act covers four main areas: who counts as a property practitioner, the certificate they need, how they handle client money, and what they must tell buyers and tenants.

2. What is a property practitioner

Under section 1, a property practitioner is any person or business that, for gain and on behalf of someone else:

• sells, buys, manages or markets property or a business
• lets property or advertises it for rent, by electronic or any other means
• collects rent or other money due under a lease
• arranges or markets finance for buying, letting or managing property, such as a bond broker
• acts as an intermediary to get a sale or rental agreement signed.

The definition also includes anyone who markets units or shares in a development, and any person who for remuneration manages a property on behalf of another.

It does not include someone who sells their own property in their personal capacity, or someone who does not do this in the ordinary course of business.

2.1 Property practitioner or estate agent

"Estate agent" was the term used under the old Act. "Property practitioner" is the wider term that replaced it. Every estate agent is a property practitioner, but so are managing agents, rental agents, auctioneers, bond originators and others the Act lists.

Practitioners start as candidate property practitioners in training. They can then qualify as non-principal practitioners, and principals who run a firm need a higher qualification.

3. What the Act requires

3.1 A Fidelity Fund certificate

No one may act as a property practitioner without a valid Fidelity Fund certificate. Under section 56, a practitioner without one has no right to commission or any other payment for the work, and may have to pay back what they received. Our guide to the Fidelity Fund certificate covers who needs one, how to apply and the PPRA's current registration rules.

3.2 A trust account for client money

Section 54 says every property practitioner must open a separate trust account with a registered bank, appoint an auditor, give the PPRA the account details and deposit all trust money into it straight away. Trust money includes deposits and rent held for clients.

Section 23 lets the Minister set when practitioners can be exempted from keeping a trust account. Practitioners with a turnover below R2,5 million can have their accounting records independently reviewed by an accountant rather than audited.

3.3 The mandatory disclosure form

Under section 67, a practitioner must not accept a mandate to sell or let a property unless the seller or landlord has completed and signed a mandatory disclosure form. The practitioner must give a copy to anyone who intends to make an offer.

The signed form is attached to the sale or lease agreement. If it is missing, the agreement is read as if no defects were disclosed. A practitioner who skips it can be held liable by the affected consumer.

4. Penalties

Under section 71, a person convicted of an offence under the Act can be fined or sent to prison for up to 10 years. Acting without a Fidelity Fund certificate also means losing any right to commission for that work.

The PPRA also inspects practitioners and can act on complaints from consumers.

5. What the Act means for short-let managers

If you are paid to manage someone else's short-let property, the definition in section 1 can apply to you. Managing a property for remuneration, letting it by electronic means and collecting rent for an owner all appear in the definition.

The PPRA is not yet registering every category of practitioner. Until it does, others can apply for an exemption under Section 4. Our Fidelity Fund certificate guide explains the current position. Check with the PPRA which category you fall into before you take on clients.

Short-let managers in Cape Town also need to watch the City's draft rules. Our guide to the Cape Town short-term letting by-law covers registration and rating. If you are weighing up co-hosting against full management, see our comparison of co-hosts and property managers.

6. How to check if a property practitioner is registered

Use the PPRA Practitioner Search on the PPRA website. Search by name or firm to see whether a practitioner holds a valid Fidelity Fund certificate.

Ask to see the certificate before you sign a mandate or pay a deposit. If the practitioner cannot show one, they are not entitled to commission on the deal.

7. Running a short-let management business in South Africa

A management business earns a share of every booking, so it works best with a clear process for compliance, owner reporting and trust money from the start.

To see what a Cape Town property can earn, read our guide to how much you can earn on Airbnb in Cape Town. To build a management business with Houst behind you, see how a Houst partnership works in South Africa.

This guide is general information, not legal or tax advice. Speak to a qualified adviser about your situation.