Duties of a Stand-In Principal

The Impact of using a PPs Stand-In Principal

Appointing a stand-in principal does not reduce the legal obligations of the position. The stand-in assumes full accountability for compliance, management, and operations. Any breach can result in penalties, suspension, or loss of the Fidelity Fund Certificate, which would stop the agency from trading.

Important Notice:

Please review this document carefully. It explains the duties of a principal and your obligations to your PPs stand-in principal. Discuss any unclear points immediately before signing the principal employment agreement.

Principal Obligations

• FFCs: The principal must ensure valid Fidelity Fund Certificates for the firm and every property practitioner at all times; trading without these is illegal.
• Staff & Agents: All agents and interns must be properly registered, supervised, and kept compliant with education and qualification requirements set by the PPRA.
• Operations: The principal oversees all daily operations, including staffing, marketing, financial controls, and adherence to the Property Practitioners Act and other laws.
• Supervision: All work by agents and interns must be reviewed, documented, and signed off to confirm compliance with the Code of Conduct and training standards.
• Trust Account: The principal controls the trust account, ensuring correct handling of client funds and arranging monthly audits, approved exemptions, or PPRA facilitators as required.
• Candidate Training: Interns must receive structured mentorship, regular guidance, and signed confirmation of progress toward full qualification.
• CPD: Non-principal agents must complete their annual Continued Professional Development hours, and the principal must monitor completion.
• Policies & Procedures: Internal policies for marketing, advertising, record-keeping, and risk management must be created, approved, and enforced by the principal.
• Legislation:
  • POPIA: Policies must protect personal information and be included in the firm’s compliance documentation.
  • FIC: A director must act as FIC Reporting Officer to ensure anti-money-laundering checks and full documentation for every transaction.

Your Obligations to Your Stand-In Principal

To ensure smooth operations and full compliance while working with a stand-in principal, please meet the following requirements:

• PPRA Registration Compliance
  Provide all documents requested by PPs promptly, including an up-to-date organogram of your business showing any associated real estate firms.
• Fidelity Fund Certificates – FFCs
  Display valid FFCs in the registered office at all times in preparation for any PPRA audit.
• Staff and Agents
  Supply employment contracts, KPIs, budgets, commission structures, and performance goals for all staff and agents to PPs.
• Intern Training
  Basic online training will be provided by the principal. Agents are responsible for purchasing qualifications and courses from accredited providers and must meet all training deadlines.
• Contracts and Transactions
  The principal must sign off all candidate agent contracts and will contact stakeholders for each transaction to confirm satisfaction. All contracts must include FIC documents before commission can be paid. Commission payment advice must be signed by agents before release. Contracts must be stored on a shared online filing platform such as OneDrive where PPs will have unlimited access.
• Financial Records
  Share financial records monthly or whenever requested by the stand-in principal. This includes the business’s current account, conveyancing records, rental records, and all management system data.
• Trust Accounts
  Trust accounts will be audited monthly by the stand-in principal’s appointed accountant, with fees payable by the real estate firm. This requirement does not apply where a trust account exemption exists or where a PPRA Payment Processing Agent is used.
• Branding and Marketing
  Must comply with the PPRA Code of Conduct and be overseen by the principal.
• FIC Compliance
  The FIC RMCP contract must be signed and reviewed annually. A FIC Reporting Officer must be appointed and their appointment displayed in the registered office. All agents and staff must complete annual FIC training, with training records securely stored for audit purposes.

Disclaimer:

This article is for general information only. PPRA regulations may change without notice. PPs accepts no liability for errors or decisions based on this content. Please consult the PPRA or its official website for the latest compliance requirements.