PDE 4 capacitation workshop Pam Snyman CPRE April 2020
introduction STANDARD OF TRAINING OF ESTATE AGENTS REGULATIONS, 2008 Qualification: FET Certificate: Real Estate NQF Level 4 Professional Designation: Professional Designation Exam (PDE) PPRE (Professional Practitioner Real Estate)
THE EXAM • The 4 hour open book examination comprises both a knowledge component as well as a case study component. • Chapters to study: Chapters 12 – 20 and Ch 5 Statistical Measurement • The overall examination pass mark is 50% • Time allocation: Section A: Knowledge component - 1½ hours Sections B & C: Case study components - 2 hours
• Candidates are permitted to take books or papers of any kind into the examination room. You may take a dictionary in and may answer questions in the official SA language of your choice • No electronic devices of any nature, including cellular telephones, are permitted • Candidates should take a hand-held calculator to the examination (it does not have to be a financial/business calculator) • Candidates must bring the EAAB registration letter with them to the examination venue and must provide positive proof of identity - identity document, passport or valid driver's license
BREAKDOWN OF MODULES MODULE 1: Compliance MODULE 2: The Estate Agents’ Code of Conduct and Ethics MODULE 3: The Law and the Legislative Environment of Real Estate MODULE 4: Estate Agency Marketing MODULE 5: Statistical Measurement , Real Estate Economics and Finance
MODULE 1 : real estate COMPLIANCE The essence of Estate Agency Compliance is described in the following Chapters of the Real Estate Study Guide: Mod 1.1: Chapter 13 – Apply Business Principles to the Real Estate Function Mod 1.2: Chapter 14 section 3 – Legal and Regulatory Environments Mod 1.3 Chapter 16 section 4 – Law and Legislation regulating the Estate Agent and Estate Agencies
MODULE 2: CODE OF CONDUCT & ethics This module covers Chapter 20 (The Real Estate Code of Conduct and Ethics) of the Real Estate Study Guide. • The Estate Agents’ Code of Conduct is summarised along with a number of case studies. • The Code of Conduct for Estate Agents is an important component of the examination and candidates must ensure that they know, understand and be able to apply it in the real estate environment.
Module 3 : The Law and Legislative Environment The legal aspects of the real estate environment are discussed from the following chapters of the Real Estate Study Guide: Mod 3.1: Chapter 14 section 4 – Stakeholders operating within the Real Estate Environment Mod 3.2: Chapter 16 section 1 – The Principles of Contract Law and Real Estate Contracts Mod 3.3: Chapter 16 section 2 – Contracts specific to Real Estate Mod 3.4: Chapter 16 section 3 – Law and Legislation relating to Immovable Property Transactions Mod 3.5: Chapter 17 – Money Laundering Legislation as applicable to Accountable Institutions Mod 3.6: Chapter 19 section4 – The Sectional Titles Act as community scheme legislation
Module 4 : Estate Agency Marketing All the different aspects of marketing real estate are discussed in Chapter 19 (Market, Sell and Lease a Property) of the Real Estate Study Guide • The more important aspects are explained, summarised and illustrated by means of case studies and model examination questions
Module 5 : Property Economics, Finance and Statistical Measurement The basics of property economics and finance are discussed in the following Chapters of the Real Estate Study Guide: Chapter 5 s1 – Collecting, Organising and Representing Data Chapter 12 – Advise Role Players on Real Estate Financing Options Chapter 14 s1 – Demographics Chapter 14 s 2 – The Economic Environment affecting Real Estate Each of these aspects is summarised with the aid of practical examples, basic calculations and model examination questions. All necessary formulae are provided as well as examples of financial calculations. Tables are provided
MODULE 1: real estate COMPLIANCE Mod 1.1 ESTATE AGENCY BUSINESS Chapter 13 : Apply Business Principles to the Real Estate Function Mod 1.2 LEGAL COMPLIANCE Chapter 14 s 3 : Legal and Regulatory Real Estate Environments Chapter 16 s 4 : Law and Legislation: Estate Agent and Agencies
Module 1.1: BUSINESS ASPECTS OF ESTATE AGENCY Chapter 13: Apply Business Principles to the Real Estate Function Examples of questions: Define ‘budget’ and give its purpose 1. 2. Name two sources of capital funding 3. What are the different kinds of budgets that you would encounter in an estate agency enterprise? 4. Name the risks that estate agency enterprises face 5. Explain economic risk and how it affects an estate agency enterprise
Module 1.2 – LEGAL COMPLIANCE • Chapter 14 s3: Regulatory and Legal Environments & • Chapter 16 s4: Law and Legislation regulating the Estate Agent and Estate Agencies Regulatory Environment • As part of the Estate Agency Affairs Board’s statutory mandate and legislation, it is the requirement of all estate agents to be in possession of a valid Fidelity Fund Certificate (FFC). • The FFC serves as the estate agents ‘license’ to practice. It is imperative that the Principal of the firm renews his/her FFC and ensures that the Auditor’s Report has been submitted to the Estate Agency Affairs Board (EAAB) within a four-month period after their financial year-end. • Failure of the Principal renewing his/her FFC as well as the non-submission of the Auditor’s Report, will lead to the EAAB not issuing FFC’s for the employees of the firm.
Regulatory Environment (14s3) • Examples of questions: 1. Name 5 laws that affect the real estate function 2. Which two of the following statements regarding the Estate Agency Affairs Act are true: A: The Act grants the EAAB the power to frame and publish the Code of Conduct for Estate Agents.* B: The Act does not require estate agents to be issued with a valid Fidelity Fund Certificates since this is an EAAB requirement. C: The Act provides for the establishment of the Estate Agents Fidelity Fund.* D: The Act provides that consumers must register with the EAAB before selling their own immovable properties.
3. The EAAB has the right to withdraw and estate agent’s FFC in the event that: (two statements are correct) A: A principal estate agent has not had the agency’s books and trust account audited every month. B: An estate agent refuses to attend a disciplinary hearing after having been subpoenaed to do so.* C: An estate agent is found guilty of conduct deserving of sanction after having breached the Code of Conduct for Estate Agents.*
4. In the event that an estate agent is found guilty of conduct deserving of sanction, the EAAB may: (two statements are correct) Withdraw the agent’s FFC* A: B: Fine the person up to R25 000 per count* C: Sentence the offending estate agent to imprisonment for a period not exceeding 5 years. D: Impose both a fine and period of imprisonment
Legal Compliance (16s4): Trust money In terms of the Estate Agency Affairs Act 112/76 • To be paid into trust account immediately on receipt • Interest in accordance with mandate or sale/lease agreement • If silent, interest accrues to Fidelity Fund 50% and 50% to agency (Code of Conduct prescribes disclosure to concerned parties re interest) • Only allowed to pay out when legally entitled to do so, or instructed to pay out by conveyancer • If pay out before entitled, the trust account will show a shortfall which will have interest/audit implications
In terms of the Code of Conduct: • Agent may not influence client to pay interest to agent • Agent must disclose that unless parties agree, the interest accrues to EAAB • Trust moneys must be invested at the best interest rate at the financial institution where the trust account is kept • The full amount must be paid to entitled party
Module 1.3: Immovable property transactions (16s3) PROPERTY OWNERSHIP Real Right Public Legal Private Legal Circumscription Circumscription (Legislation & Regulations) (Agreement) Limited Real Right Limited Real Right Taxation Municipal Control Measures Servitudes Expropriation Mortgages Mineral Rights Long Leases
EXAMPLES OF QUESTIONS 1. What is the difference between Real and Personal Rights? 2. Give two examples of Public Legal Circumscription. 3. Name two types of servitudes and explain the difference between the two. 4. Which statement(s) is or are correct? A: A personal servitude accrues to a person in his capacity as owner of the specific property which the servitude intends to benefit. B: A praedial servitude is a right in favour of a specific individual. C: Purchasers will be bound to respect servitudes registered over properties, whether or not they actually knew of the servitudes at the time of the respective sales.*
MODULE 2: The code of conduct & ethics Mod 2.1 CODE OF CONDUCT AND SUMMARY Chapter 20 s2: The Code of Conduct for Estate Agents Mod 2.2 SHORT QUESTIONS RELATING TO THE CODE OF CONDUCT Mod 2.3 CASE STUDIES RELATING TO THE CODE OF CONDUCT
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