The Consumer Protection Act (CPA) due to take effect in October 2010
If this is not complied with, the Act gives wide latitude to the consumer to seek legal recourse and compensation. Simon Raab, Southern Suburbs manager for Greeff Properties, says property marketers will find themselves “in a new ballpark” when this Act is implemented.
Raab warned that agents will have to take it upon themselves to ensure that sellers and, more particularly, buyers, have fully understood the meaning of the wording and legal effect of such wording contained within all mandate agreements and contracts into which they have entered. “The aim of the new Act is to promote a fairer, more accessible and more sustainable marketplace in which the less wellinformed and less educated clients are better protected.”
Furthermore, said Raab, if in any way the quality of the product or the service rendered falls short of generally accepted high standards, the customer will from November onwards, be entitled to claims, replacements or even to a total cancellation of the agreement. "Consumers will also have an opportunity to approach the National Consumer Commission instead of the Magistrate's or High Courts, which in itself will encourage more action being taken when damages can be proven.
"The wording of the Act makes it clear that all in the 'supply chain' can be held responsible. This, as I read it, implicates the agent as well as the manufacturer or, in the property world, the seller and/or valuer."
Steven Kay, MD of Home Inspection Services, says Section 55 of this Act places a responsibility on estate agents to ensure that potential buyers are fully informed regarding the condition of the property.
"The 'As Is' or 'voetstoots' clause in an Offer to Purchase will no longer protect estate agents from the perils of nondisclosure. This means that the challenge for estate agents is to provide full disclosure up-front to potential buyers."
Dr Andrew Golding, CE of Pam Golding Properties (PGP), says he believes the primary benefit of the Act will be enhanced protection for consumers against exploitation and unfair marketing and business practices. "Property buyers will also benefit from improved standards of consumer information and the setting of standards and national norms relating to consumer protection.
"I do believe that the Act is a good thing that will offer improved protection to the most vulnerable of consumers, who most often find themselves in unequal bargaining positions. Consumer issues will also be dealt with in a less fragmented way and the Act has sought to consolidate various pieces of legislation in relation to consumer protection. The regulations to be promulgated under the Act will provide greater clarity with respect to the implementation of certain of the Act’s provisions."
He says PGP has already commissioned a review of their standard documentation and business and marketing practices to ensure that changes are made where necessary and new processes implemented as required. "We believe that this review will be an ongoing process in light of the interpretation by our courts of the new Act’s provisions."
The CPA is set to have a massive impact on virtually every business in the country, including the real estate industry, says Peter Gilmour, chairman of RE/MAX of Southern Africa.
He says that, for example, the CPA states that a supplier cannot make any false, misleading or perceptive representations that any land or immovable property has characteristics, facilities and amenities that it does not have, or that it may lawfully be used for purposes that are unlawful or impracticable. "As per this particular clause, any false representation or inaccurate concepts, whether delivered knowingly or not, could, under the CPA, make it possible for the buyer, on appeal of the courts, to get the contract cancelled."`
Source: Department of Trade and Industry article featured in Estate Agency Affairs Board AGENT magazine
The Consumer Pprotection Act due to take effect in October 2010
The Consumer Protection Act (CPA), due to take effect on 25 October this year, will mainly force agents to ensure property sellers and buyers understand the wording and legal effect of all contracts they enter into.