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Property Condition Reports By Sellers & Landlords Are Affecting The Validity Of Sole Mandates

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Property Condition Reports By Sellers & Landlords Are Affecting The Validity Of Sole Mandates

1. Property Condition Reports - Is it at all "negotiable"? 
 
Since inception of the Property Practitioners' Act (PPA), estate agents (property practitioners) have sought a solution to the following scenario: 
 
When you have an executor/curator/investment seller, who has no knowledge of the property's condition at all, and who refuses to sign a property condition report. What then? 
 
In the light of the history of the Property Condition Report (which was introduced by the former Estate Agency Affairs Board (EAAB) to protect estate agents against claims of non-disclosure), according to Miltons Matsemela Attorneys, the Act has been interpreted to mean that if you are faced with a seller who is not willing to sign, for the above reasons, the estate agent could possibly use an addendum to address this, and still protect herself / himself. 
 
However, the PPRA have now send out a notice that the Property Condition Report: 
 
(1) serves to protect the consumer, and 
 
(2) they also confirmed that Property Practitioners who do not comply, face the risk of disciplinary sanction without exception. According to Annetjie van Rooyen of STBB Attorneys, the estate agent who did not receive a signed Property Condition Report by the time the mandate has been provided or effected, actions will be viewed in terms of article 67(1) of the PPA as a "minor contravention" and could receive a penalty of up to R15 000.
 
As such, and to finally answer the question that has been raised: If the seller or landlord (in a residential lease) does not want to sign off on the condition report, the estate agent may not market the property. 
 
In the PPRA's defence, sellers must simply be made aware of the fact, that these reports do not bind the seller in any manner at all. It is a declaration made to the best of the seller's knowledge and belief. It does not amount to a warranty of any kind.
 
According to Miltons Matsemela Attorneys, it is advisable to all Property Practitioners to turn down any mandates where the seller refuses to complete and sign such a report, with immediate effect. If an estate agent has a pending mandate, but no completed report, the estate agent needs to get one right away, or he or she will be forced to terminate the mandate. 
 
There are no exceptions, it seems.
 
Section 67 of the PPA states the following:
 
(1) A property practitioner must -
 
(a) not accept a mandate unless the seller or lessor of the property has provided him or her with a full completed and signed mandatory disclosure on the prescribed form; and
 
(b) provide a copy of the completed mandatory disclosure form to a prospective purchaser or lessee who intends to make an offer for the purchase or lease of a property.
 
(2) The completed mandatory disclosure form signed by all relevant parties must be attached to any agreement for the sale or lease of a property, and forms an integral part of that agreement, but if such a disclosure form was not completed, signed, or attached, the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser.
 
2. May an agent complete this on the seller's/landlord's behalf? 
 
Yes. But the SELLER/LANDLORD must still sign it off. It is a declaration by him/her, not the agent. 
 
3. Is there no way around this at all?
 
You could apply for exemption under Section 4 of the Act, but this is not practical at all as it would have to be for each and every such occasion.
 
4. Can the prescribed Mandatory Disclosure be at all amended? 
 
No. It must be used in its prescribed form. Do not change anything.
Author Miltons Matesemela Attorneys / STBB Attorneys
Published 28 Sep 2023 / Views -
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