As the timeshare industry becomes more closely aligned with South Africa’s broader property regulations, understanding and meeting compliance requirements has become critical. The Property Practitioners Act introduces several responsibilities for timeshare practitioners, including trust account compliance, training requirements, and the need for Fidelity Fund Certificates (FFC). Here’s what you need to know to navigate this evolving landscape.
UNDERSTANDING TRUST ACCOUNTS
Trust accounts are designed to protect consumer funds, such as deposits or payments for property transactions. All property practitioners must have a trust account unless they’ve been granted an exemption.
Key Requirements:
- Open a designated trust account with a commercial bank and register it with the PPRA.
- Submit an annual audit report of the trust account within six months of the financial year-end.
- Maintain clear records of all transactions, including written instructions for disbursing funds.
Penalties for Non-Compliance:
Failure to comply with trust account regulations can result in escalating penalties, including fines of up to R25,000 and, in severe cases, the withdrawal of your FFC.
Exemptions:
Practitioners who do not handle trust money and whose businesses have a turnover below R2.5 million annually can apply for an exemption. This requires submitting an affidavit and undertaking not to receive trust money without prior notification to the PPRA.
TRAINING AND EDUCATION REQUIREMENTS
The integration of timeshare into the property practitioner framework has brought training requirements into focus. Practitioners must meet specific qualification standards to operate legally.
- Exemptions for Training:
Exemptions from training requirements are typically granted for 12 months. Practitioners needing additional time can apply for an extension by submitting their original application with updated dates. - Qualification Development:
A new qualification tailored to the timeshare industry is being developed. This will provide a practical, accessible pathway for practitioners to meet compliance standards and advance their careers.
FIDELITY FUND CERTIFICATES (FFCs)
The FFC is a critical requirement for all property practitioners. It serves as proof of compliance and enables practitioners to legally operate within the industry.
Current Exemption Status:
For the past two years, timeshare practitioners have been exempted from holding an FFC. However, this exemption is set to end in December. Practitioners should prepare to meet FFC requirements moving forward.
What You Need to Apply for an FFC:
- Proof of a designated trust account (or exemption).
- Evidence of compliance with training and education requirements.
PROPOSED REGULATORY CHANGES
Several updates to the regulations are in the pipeline, aimed at addressing practical challenges faced by property practitioners. These include:
- Longer Exemptions: Allowing exemptions for more than the current three-year maximum.
- Administrative Fees: Introducing fees to cover the costs of processing exemptions and other administrative tasks.
- Improved Fidelity Fund Certificates: Updating the certificate to include essential details, such as practitioner status and firm affiliation, for greater clarity.
COLLABORATING FOR A STRONGER FUTURE
The timeshare industry’s integration into the property regulatory framework presents both challenges and opportunities. Practitioners must work together to ensure compliance while leveraging the benefits of a more unified approach to regulation.
VOASA remains committed to supporting members through this transition, advocating for practical solutions, and providing timely updates on developments. By staying informed and proactive, timeshare practitioners can navigate these changes with confidence and build a strong foundation for the future.
For more information or assistance, reach out to VOASA. Together, we’ll shape a compliant, thriving timeshare industry.