Tag Archive | property

Property Practitioners Bill will protect buyers

Property market will see major changes…..

lindiwe sisuluMinister Lindiwe Sisulu has stated that what will be termed “home inspectors” will have a far greater role to play than the present process of various clearance certificates that are produced before the sale of home property can take place.

At present, a Property Practitioners Bill changing the landscape in respect of the way property changes hands is in the process of drafting by the department of human settlements, she told Parliament.

Also at present, buyers only have recourse to the Consumer Protection Act, which is both vague on affected issues and out of reach financially for many should recourse  be sought, she noted.

In relation to this problem now being experienced by many buyers, particularly in lower income situations, new legislation is in draft form revising the selling/buying process in the home property industry. This has come about mainly as a result of the fact that the Estate Agency Affairs Board (EAAB) now falls under the ambit of the department of human settlements (DHS).

Doing it better for the buyer

The wish of DHS, says the Minister, is to prioritise for new rules that will place a heavier onus on estate agents/realtors to provide a much deeper level of advice to prospective purchasers and to engage a properly trained and certified home inspector for the sale.

Consequently, it is hoped that there be will a raised level of awareness on the part of sellers and theirmechanic agents that more is required of them before a sale can take place. At the present moment, varying from province to province, just a gas, plumbing and electrical clearance is called for – and sometimes a “beetle certificate” for wood borers, anciently known as the deathwatch beetle, and non-existent in most parts of SA.

Not just a name

Yet to be fully drafted, this Property Practitioners Bill will shortly go to the State Law Advisor aimed at tightening up on many such aspects of the property market industry. The main stakeholder, the EAAB, appears to be working with DHS to achieve a number of objectives, such as re-naming estate agents as “property practioners” and increasing their responsibility for more informed advice to the buyer.

Part of the re-structuring is also that EAAB may become known as the Property Practitioners’ Regulatory Authority (PPRA) registering those acceptable on a criteria basis and upgrading the industry’s level of responsibility at law to avoid “commission hunters looking for a fast sale” at the expense of a truthful and an expert assessment of the property in question.

Getting it going

The new Bill, the department says, will upgrade many of the practices selling home property; will set out provisions for the establishment of this new authority; re-emphasize and tighten up on certain aspects of governance in the industry; regulate for property home inspectors/surveyors; and regulate for their registration by the new authority before they can be part of any sale process.

Where the big change will come, it seems, is in the area of generalised consumer protection, which it is proposed will fall under the common jurisprudence of the new authority rather than relate to the Consumer Protection Act.

It is suspected that many more possible registered “home inspectors” than that who potentially exist at the moment will have to be trained and registered by the new authority before the current volume of sales can be processed. This may call for the Bill to be introduced in stages.

Buyer beware

house for saleWhilst the practice in the past on property sales has been on the basis of voetstoets enabling sellers to walk away from known faults, this has left home purchasers particularly vulnerable and with only recourse to the courts, an expensive process.

In terms of the proposed Bill, a clause will apply setting out that the seller is exempt from the authority of the new body replacing the EAAB, leaving only the consumer as a possible aggrieved party subject the result of the appointment of a registered home inspector and a properly informed property professional.

Tightening up

The Consumer Protection Commission has stated that as things stand at present estate agents are responsible for all advice and a satisfactory outcome of a sale in terms of the Consumer Protection Act, yet the whole area is vague at law with many experts differing on expected outcomes.

It is hoped that the new proposals will clarify much in this area which has been described by the EAAB itself as a “legal quagmire” and to make the sale of a home a “less stressful and time consuming process” for the buyer.

Other articles in this category or as background
White Paper on Human Settlements shortly for comment. – ParlyReportSA
Rental Housing Amendment Bill goes for country coverage
Spatial planning bill ends long journey in Parliament – ParlyReportSA

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Competition Commission zeroes in on retailing

Minister on new Competition Commission focus…

large retailerThe Competition Commission is to announce the terms of the market enquiry into “parts” of the retail industry within the next few weeks, said Minister of Economic Development, Ebrahim Patel, in his budget vote speech to Parliament.

What “parts” exactly were not clear from his speech, Minister Patel only saying itebrahim patel would involve large supermarket chains, grocery stores and small retail outlets like spaza shops.

At present the Competition Commission has launched a market enquiry into both the private medical industry and liquefied natural gas distribution process and was now in discussion with the construction industry on a similar restitution package as “redress for their collusion and price-fixing.”

Property ownership focus

Unusually, Minister Patel’s speech was short and to the point but he did say on the Competition Commission would be looking into the retailing industry and property ownership area.

He said the inquiry would involve “The structure of the industry including retail outlets in townships, the tenancy arrangements in shopping malls that seem to squeeze smaller players out and the impact of the growth of large retail chains on competition, jobs and small business development.”

Announcement appears in vacuum

large retailer 2Nothing was said on Minister Patel’s plans for the Competition Commission in the budget vote speech from Minister of Small Business, Lindiwe Zulu, nor in Minister of Trade and Industry, Rob Davies’ speech, DTI having been split the Competition Commission but still interested in entrepreneurship and job creation.

Deputy Minister of Economic Development, Madala Masuku, said nothing at all on the subject the Competition Commission in her speech but did advise Parliament that the department had been on a series of provincial business studies over six months on how to create more jobs and build small businesses and better service to the provinces. That possibly is the basis of what is now happening as a result of what they saw.

Small business seems stifled

The structure of small business and the relationship to retail chain outlets, competitive pricing and rentals must have been part of such observations.spazza

Also minister, Lindiwe Sisulu, before being transferred to the post of minister of human settlements had told the select committee on economic development that “SMMEs contributed 57% of South Africa’s GDP and accounted for 56% of employment.  The National Development Plan (NDP) envisaged that 90% of jobs created would be coming from small and medium enterprises.”

Partnerships in retailing and distribution

She told parliamentarians that economies around the world had shown that jobs were not created by large corporations, but by SMMEs.    However, large corporations and big businesses should seek partnerships in South Africa so that they could assist the department in building small and medium enterprises and thus contribute to economic development, she said.

Manufacturing distribution was also an area discussed at length  in government small business workshopsdistribution recently attended by parliamentarians where it was seen that the large retailers have also control of country wide market distribution at retail level, only dealing with areas providing suitable economic return and more sophisticated road and rail infrastructure.

This market inquiry by Minister Patel therefore has an investigative ring to it rather than any direct attack on certain sectors in the retail industry.

Other articles in this category or as background

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