Property Practitioners who now need to hold a Fidelity Fund Certificate, unless excluded, to practice in terms of the Property Practitioners Act, 22 of 2019, may have certain questions regarding the application process to obtain the Certificate, its issuing from the Authority and any disqualifications from issuing, its amendment, withdrawal, and lapse thereof.
A Property Practitioner needs to apply for a Fidelity Fund certificate every three years to the Authority within the prescribed period and accompanied with the prescribed fee. The ‘Authority’ relates to the Property Practitioners Regulatory Authority, established in section 5 of the Property Practitioners Act, 22 of 2019 (hereafter the “Act”) and a juristic person accountable to the Minister. When the Authority receives the application together with the prescribed fees, the Authority will issue the Fidelity Fund Certificate if the Property Practitioner meets all the requirements as specified by the Act or is not disqualified from being issued a Fidelity Fund Certificate. The Certificate will be issued in the prescribed form and valid until the 31st of December of each year.
Some of the parties who are disqualified from receiving issued Fidelity Fund Certificates are the following:
- Any person who is not a South African citizen and does not reside within the Republic.
- Any person who has been found guilty of the Property Practitioners Act, the repealed Estate Agency Affairs Act, or any legislation similar within five years at any time.
- Any person who is of unsound mind.
- Any person who has been dismissed from a position of trust at any time preceding five years.
When holding a Fidelity Fund Certificate, there could be times when the Authority may need to amend it. In writing, the Authority may inform the holder of the Fidelity Fund Certificate of its intention to amend the Certificate or any part thereof. The proposed amendment needs to be accompanied by reasons from the Authority, and the holder of the Certificate may respond to the proposed amendment(s) within a prescribed period.
When an amended Fidelity Fund Certificate is issued to the Property Practitioner, the Authority needs to accompany the amended Certificate any reasons for the amendment; supply any replies to the holder of the Certificate’s responses, and request the return of the original Fidelity Fund Certificate immediately. The date on which the Authority serves the amended Fidelity Fund Certificate on the Property Practitioner is the date which it comes into operation. If the Property Practitioner delays or prevents the Authority in any way to deliver or serve the amended Fidelity Fund Certificate, the amended Certificate will come into operation on the date which the Authority attempted to serve the Certificate on the Property Practitioner.
Any holder of a Certificate in terms of the Act is mandated to display the Fidelity Fund Certificate at all times; it is prominently featured in the place of business where property transactions are conducted so that consumers can inspect it without effort. Holders of the Certificate also need to ensure that any communication through marketing material and letterheads must be clear and legible. Lastly, a holder of the Certificate needs to ensure that the necessary clause is inserted in all relevant documents, ensuring that the Certificate is valid. Any relevant person who contravenes the above-mentioned rules will be guilty of an offence as per section 52(2) of the Act.
Holders of the Certificate should note that it can be withdrawn or lapse in certain circumstances. In terms of withdrawal of the Certificate, if the Authority is instructed by a court of law or any adjudicator, or by its initiative decide to withdraw a Fidelity Fund Certificate – it is allowed to do so in terms of certain provisions laid out in section 52(1) of the Act. Section 52(4) of the Act stipulates circumstances when the Certificate will lapse, such as the date of death of the certificate holder. When the Fidelity Fund Certificate is withdrawn or lapses in terms of section 52, the person who has the Certificate in their possession needs to return the Certificate to the Authority. If it is not possible, the relevant person will need to make a declaration under oath to state why the Certificate will not be returned.
Reference: Property Practitioners Act, 22 of 2019.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)