Do I need to register with the PPRA? Code of Conduct

The College of People Management and Development_Do I need to register with the PPRA_Summary_Code of Conduct

Do I need to register with the PPRA? Code of Conduct

Over the next few weeks, I will be discussing the Code of Conduct.  It appears that there are still many property practitioners (PP) who do not understand or remember their ethical obligations in terms of the Code of Conduct.


In this week’s blog, I will discuss the duties applicable to all PP’s.  These duties are contained in Regulation 34.2.  A summary of Regulation (Reg) 34.2 follows below:


  1. Reg – as a PP, you may not do anything that is or may be contrary to the integrity of PPs in general. The purpose of this clause is to highlight to PPs that there is a certain standard of behaviour required and as a PP, you may not do anything that is contrary to this expected standard of behaviour.
  2. Reg – in terms of this Reg, you are required to protect the interests of your client at all times, but with due regard to the interests of all parties concerned. If a seller has given you a mandate, then you need to protect the interests of the seller, for example, by obtaining the highest price possible and not putting pressure on your seller to accept an offer because you want to get your commission.  As a PP, you also need to be mindful of the interests of other parties, for example, potential buyers.
  3. Reg – this Reg requires you to not accept a mandate if the performance of the mandate requires specialised skill or knowledge or the PP has not completed the required qualifications. An example would be a PP that sells or lets residential property and has a client that wishes to give them a mandate to sell a commercial property.  The PP should not accept such a mandate as the sale of the commercial property would require specialised skill that the PP may not have.  The PP may be assisted by another PP that has the specialised skill or knowledge, but this must be disclosed in writing to your client.
  4. Reg – every PP must perform their duties with the care and skill that might reasonably be expected of a PP.
  5. Reg – in terms of this Reg, you may not use anyone or any entity as a front, so for example, you may not buy your client’s property through a company without your client knowing that the buyer is your company. The PP may wish to buy their client’s property but not want the client to know, so that the PP can try and but the property at the lowest price possible.  This would be prohibited in terms of this Reg.
  6. Reg – this Reg prohibits a PP from soliciting or influencing any person who is entitled to trust funds under the control of the PP, to pay any of the interest that has accrued on those trust funds, to the PP.
  7. Reg – further to point 6 above, the PP must disclose, before receiving any money in trust in respect of a sale or lease, that unless they agree in writing to whom interest earned on such funds must be paid, that the interest may accrue to the Fidelity Fund. This means that it is the PP’s responsibility to disclose that the interest will accrue to one or both of the parties and that they must request it in writing.  In general, most PP’s will have a clause in their documentation indicating to which party interest must be paid.
  8. Reg – in terms of this Reg, any money held any trust by a PP, must be invested at the best rate available in the circumstances. This does not mean that the PP must try and identify which financial institution pays the best interest rate, but rather the best rate that the PP is able to get at the financial institution where the PP keeps their trust accounts.  In addition, all interest earned, must be paid to the person entitled to that interest.
  9. Reg 34.2.2 – this Reg requires the PP to keep confidential any information relating to the business affairs, trade secrets or technical methods of a client or any party to the transaction. It is no one else’s business.  Keep the information to yourself!


Next week we will discuss Reg 34.3 – Duties applicable to estate agents.  Note the reference to estate agents and not property practitioners!


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