Most people understand that reputable estate agents must be registered with the Property Practitioners Regulatory Authority (PPRA) (formerly the Estate Agency Affairs Board (EAAB)). What many don’t realise is that in addition to relevant qualifications and experience, an estate agent is mandated to have a Fidelity Fund Certificate (FFC); this confirms that they are both legally registered and compliant with industry regulations.
In this article, we’ll unpack what a fidelity fund is, look at the protection that the FFC offers and why it’s important. We’ll also outline how property practitioners apply for their certificates.
Fidelity Funds explained
Fidelity funds like the Property Practitioners Fidelity Fund or the Legal Practitioners Fidelity Fund are designed to protect clients if either their attorney or estate agent misappropriates money deposited with them for safekeeping.
Why staying compliant matters
Returning specifically to estate agents, a valid FFC is not just about following regulations: it’s about being credible, trustworthy and professional. For clients, the FFC assures them that they are dealing with a competent, compliant and registered property practitioner who has integrity and is guided by the industry’s code of conduct. Finally, only estate agents with a current FFC can operate and legally claim commissions.
Word to the wise: In addition to reputational damage, estate agents who don’t renew their FFC can face legal consequences and financial penalties.
Who does the FFC protect?
For consumers, the FFC helps to reduce the risk of corruption and property management fraud because practitioners are bound by the property practitioners’ code of ethical practice.
But that’s not all: if an estate agent either misappropriates or uses money from their trust account for nefarious activities, their clients can lodge a claim with the PPRA and get their money back.
Word to the wise: Protection from the Property Fidelity fund applies to all clients of registered, compliant estate agents, i.e. sellers, buyers, landlords and tenants.
Getting an FFC
Estate agents get their fidelity fund certificates through the PPRA’s online portal. Once registered, you will have to complete an application form, providing them with relevant details and documents. All property practitioners, regardless of status, must have fidelity fund certificates. This includes property interns, estate agents, and their principals. Also, if an agent’s principal has not already renewed their FFC or no longer has a valid FFC at the time of application, the agent will not be issued a new FFC.
Word to the wise: Transfer attorneys, as part of the conveyancing process, are also required to confirm that the estate agent involved in the property transaction has a current and valid FFC. If the agent doesn’t, they won’t be paid their commission and may have to return the funds to the client.
Not just estate agents: Other property practitioners must also have FFCs
Property practitioner is a suitcase term that includes a number of different professionals involved in property transactions. These include auctioneers, property managers, bond originators and transfer attorneys. Consequently, and in terms of the Property Practitioners Act No. 22 of 2019 (PPA), conveyancing attorneys and their staff who do work directly related to a property transaction (e.g. work with the trust account), must also have a valid FFC.
When estate agents apply for an FFC, what documents must they submit?
If you are an estate agent, when you apply for an FFC, you will have to submit the following documents:
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A certified copy of your South African identity document, and if not a South African citizen, an appropriate identity document, e.g. your passport and work permit.
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A current tax clearance certificate.
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Proof of your qualifications, i.e. your NQF Level 4 qualification if you are an estate agent, and if you’re a principal, your Level 5 qualification and proof of having achieved your professional designation.
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A letter from the estate agency confirming your employment with them, and it needs to be signed by both you and your principal.
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Intern or candidate estate agents must hold an intern FFC for a minimum of 12 months while they complete their qualifications and PDE. Interns must also submit letters confirming their employment and must include details of their estate agent mentor, who must have at least three years’ experience as a qualified, registered estate agent.
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Proof of having paid the relevant fees.
Fidelity fund certificate cost, and what they are used for
All estate agents must pay fees for their FFC, which are valid for three (3) years. However, the fees vary depending on the type of property practitioner and licence you are applying for. The costs can range from just over R1,700 up to just over R3,000 depending on the licence type. You can find the latest fee schedule on the PPRA website. The fees paid into the Property Practitioner’s Fidelity Fund cover the fund's administrative costs and reimbursements to consumers who have lost money due to estate agent fraud or misuse of funds.
Keeping your FFC current
Even though the FFC fees are payable every three years, estate agents must renew their certificates before the 31st of October every year to avoid penalties. If you don’t do this, your FFC won’t be renewed and could even be revoked. Here’s what they have to do:
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Pay the fees, if applicable and/or submit proof of having paid the fees
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Complete their continuous professional development (CPD) as set out by the PPRA
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Confirm or update business details
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Submit any documents that may be needed, e.g. a tax clearance certificate, proof of compliance with trust account regulations, etc.
Word to the wise: Set an annual reminder in your calendar – way ahead of 31 October – so that you’re not late. If you are, the penalty is R125 per month; repeat offenders risk losing their certificates altogether, which means that they will not be able to operate legally.
An FFC is a non-negotiable
For property practitioners in South Africa, therefore, holding a valid Property Practitioners’ Fidelity Fund Certificate is a non-negotiable requirement. It safeguards both professionals and consumers, ensuring ethical and legal real estate transactions. By staying compliant, practitioners protect their businesses and contribute to the industry's integrity.
A last word: Compliance is the foundation of a successful and trustworthy real estate industry. Estate agents who are properly registered and fidelity fund certified contribute to a safer business environment for everyone: buyers, sellers, landlords, tenants and property practitioners.
Have more unanswered questions? Here are some related questions – and answers – that might help…
Who regulates estate agents in South Africa?
Real estate agents are regulated by the Property Practitioners Regulatory Authority (PPRA).
What happens if an estate agent does not have an FFC?
It is a legal offence for an estate agent to operate without an FFC, which means that they cannot claim commission and they may be fined and/or suspended by the PPRA. In addition, depending on their conduct, they could face legal action by clients and, if they have falsely claimed to be - misrepresented themselves – as an estate agent, could face criminal charges.
How to check if an estate agent is registered in South Africa?
Ask your real estate agent to show you their FFC and double check that the date hasn’t expired yet. If you are still unsure, you can search for them on the Property Practitioners Association website.
