23 June 2023
With the introduction of the Property Practitioners Act, there have been some important changes to regulations regarding the responsibilities of the property owner in terms of properly disclosing the condition of their property. In this article we will unpack the importance of the Property Disclosure Form and why it has become mandatory in terms of the Act.
What is a Mandatory Property Disclosure?
This is a condition report that outlines the state of a property. It will detail damage, defects and the condition of a premises that may affect the value and safety. In terms of the PPA regulations, this has become a compulsory requirement that will be completed when entering into a Lease Agreement or Agreement of Sale. The Mandatory Disclosure Form will include, but not be limited to, the following:
- Any defects in the property that the Landlord is aware of, for example, defects in the roof, electrical system, swimming pool, air conditioning etc.
- They will also be required to include any additional information in terms of the above defects, for example, if there had been a repair to the roof which was covered under insurance and is still in the guarantee period
- Additional disclosures such as whether electrical plugs, doors, windows, ovens, alarm systems are in working order
- Any repairs that have been done to the property in the previous 12 months
- Whether the property is a part of a HomeOwners Association or a Body Corporate (in the case of Sectional Title)
- Whether the property is fitted with a prepaid electricity meter and if the rates and levies on the municipal account are up to date.
- Any additional information with regard to items that will need to be repaired before entering into a Lease Agreement with a Tenant.
- Acknowledgement and confirmation of information by the Landlord and the Tenant - the Landlord and the Tenant will be required to sign this document in acknowledgement of the condition, and, any defects or repairs (if any) that will need to be attended to at the property.
Why is the Mandatory Property Disclosure important?
Besides the fact that this form is required in terms of the PPA, this is a useful tool for any property owner. It aids in identifying any maintenance that is required and ensures from the get go that defects and damages are recorded and ensures transparency between all parties. It serves as an additional inspection checklist which will form part of the Lease Agreement - not negating the inspections done when a Tenant occupies or vacates a property. It will also help in determining the value of the property, in terms of a sale or possible rental income.
Consequences of non-compliance in terms of the PPA
Should a Mandatory Property Disclosure not be completed and signed by the Landlord, it will be interpreted that no defects were disclosed to the Tenant. This could result in major issues down the line during the tenancy. Should a case be opened by the Tenant at the Rental Housing Tribunal and it becomes evident that there was no disclosure form signed at the onset of the Lease Agreement, the PPRA (Property Practitioner Regulatory Authority) could impose a fine on the Landlord, and their duly authorized rental agent (if applicable).
