On 3 October 2019, the President promulgated the Property Practitioners Act No. 22 of 2019 which brings about an important era in the history of the timeshare sector.
The Estate Agency Affairs Board (EAAB) is redefining itself as the Property Practitioners Regulatory Authority. Transition provisions in terms of section 75 have been incorporated in the new Bill that will provide the Estate Agency Affairs Board (EAAB) ample opportunity for preparation in order to put in place the required measures to cater for the new Act. In terms of Section 77 an effective date will be pronounced.
The legislation now includes the entire spectrum of Property Practitioners involved in the purchase, sale and leasing of properties, the administration of properties and general dealing in property from funding through to the transfer of properties. This will however exclude attorneys and candidate attorneys; the Sheriff of the Court; A natural person who owns the property that in the ordinary course of their business sells the property belonging to him or her in their personal capacity.
VOASA’s engagement with the EAAB
On 20 November 2020, VOASA made a submission to the EAAB on behalf of the timeshare industry. A meeting was then held via Zoom on 26 November with the EAAB to discuss the proposals put forward.
In terms of the Property Practitioners Act assented to by the President on 19 September 2020, any person who “sells, by auction or otherwise, or markets, promotes or advertises any part, unit or section of, or rights or shares, including timeshare and fractional ownership, in a property development” will be Property Practitioners once the Act commences. However, the scope is excessively wide that it would find application on ordinary sectional title or timeshare owners selling their own properties or timeshares due to the transactions not being limited to agency relationships where the interests are sold for remuneration.
Pooling Schemes do not confer shares or rights in a property or property development on a person as anticipated in subsection (b) under the Definition of Property Practitioner in the Act. It was therefore proposed that there be an industry-wide exclusion from the application of the Act in respect of Pooling Schemes’ sales agents.
Furthermore, as the accredited qualifications are irrelevant to our sub-sector and will cause an unjust compliance risk and barrier of entry, it was proposed that timeshare sales agent members, in terms of the current definitions, are not required to qualify as “principals” or “non-principals” and that these qualifications will therefore not be required to issue their fidelity fund certificates.
The way forward
The EAAB will review VOASA’s proposal and revert with further engagement as to the progress. The Property Practitioners Bill still needs to go through a formal declaration in the Government Gazette that the new law is enacted. Section 77 of what is now the Property Practitioners Act provides that “This Act is called the Property Practitioners Act, 2018, and comes into operation on a date fixed by the President by proclamation in the Gazette“. The Act will therefore not become law before such promulgation occurs in the Government Gazette.