Must I Hold a Fidelity Fund Certificate (FFC)?

The Property Practitioners Act 22 of 2019 requires certain people and businesses involved in property transactions to hold a Fidelity Fund Certificate, a FFC, issued by the Property Practitioners Regulatory Authority, the PPRA.

Who Must Hold an FFC?

In simple terms, if you earn an income from property-related activities on behalf of another person, you must hold an FFC.

This includes anyone who, for reward or gain:

• Sells property or businesses on behalf of others.
• Purchases property or businesses on behalf of others.
• Lets or manages property for others.
• Collects rental on behalf of others.
• Markets, arranges or facilitates property finance.
• Acts as an intermediary in the sale, purchase or leasing of property or businesses.
• Sells a business and the transaction includes property owned by that business.

Who Does Not Need an FFC?

• You are selling or renting out your own property as a private individual.
• You appoint an estate agency or property practitioner to market or manage your property on your behalf.
• You are an attorney acting within the normal scope of your legal practice.
• You are a candidate attorney or sheriff performing duties within the scope of your profession.

What Types of Property Practitioners Require an FFC?

The PPRA issues FFCs across a wide range of property practitioner categories, including:

• Real Estate agents.
• Business brokers.
• Managing agents.
• Property developers.
• Auctioneers.
• Facilitators and intermediaries.
• Bond and bridging finance originators.
• Payment processing agents.
• Property advertising platforms.
• Homeowners’ associations performing property practitioner activities.
• Body corporates acting through their committees.
• Timeshare and fractional ownership businesses.
• Attorney property practitioners.

Each of these categories holds a specified FFC.

Who Within a Firm Must Hold an FFC?

For a typical estate agency or property firm:

• The Principal Property Practitioner must hold an FFC.
• All directors must hold an FFC.
• All property practitioners or agents must hold an FFC.
• Staff who deal with the public regarding property transactions must hold an FFC.
• Staff who load or release funds from a trust account must hold an FFC.

Specialised Property Practitioner Categories

For specialised categories:

• The directors of the business must hold FFCs.
• Any employee or independent contractor who deals with the public regarding property practitioner activities must hold an FFC.
• Any person handling trust account transactions must hold an FFC.

Commissions and Your FFC

Section 56(5) of the Property Practitioners Act places responsibility on attorneys involved in property transactions. Attorneys may not pay commission or any other remuneration to an estate agency or property practitioner unless they have first been provided with valid FFCs for both:

• The property practitioner; and
• The property practitioner’s firm.

This requirement acts as a safeguard to ensure that only properly registered and compliant property practitioners receive commission. If either the practitioner or the firm does not hold a valid FFC at the time the commission becomes payable, the attorney is prohibited from making payment.

For this reason, property practitioners should ensure that both their own FFC and their firm’s FFC remain valid and up to date at all times.

The Bottom Line

If you are earning an income from property-related activities on behalf of another person, you will almost certainly need a Fidelity Fund Certificate.

Holding a valid FFC is not only a legal requirement, but it also provides consumers with protection through the Property Practitioners Fidelity Fund and demonstrates that you are operating within the requirements of the Property Practitioners Act.

Why take the risk of your agents or firms FFC not being compliant?

Don’t take the risk of non-compliant FFCs. A missing or invalid FFC can result in lost commission and unnecessary regulatory problems.

Let us manage your FFC compliance for you. Our FFC Compliance Service helps ensure that your firm’s FFCs remain compliant, giving you the confidence and peace of mind to focus on growing your business.

Disclaimer:

The information provided in this article is intended for general informational purposes only. While we strive to keep all updates accurate and up-to-date, the Property Practitioners Regulatory Authority (PPRA) regulations are subject to change, and may do so without prior notice. PropAcademy is not responsible for any inaccuracies that may occur, nor for any decisions made based on this information. We encourage readers to consult the PPRA directly or visit their official website for the most current information regarding educational regulations and compliance requirements.