Bill to regulate property industry

Property developers, auctioneers and property managers have gone unregulated in the property industry for years, but a new proposed bill is set to change that.

A proposed property practitioners bill was tabled in parliament earlier in the week by minister of industrialisation and trade Lucia Iipumbu to address the gap in regulation within the industry.

According to Namibia Estate Agents Board (NEAB) manager Festus Unengu, the draft bill came after consultative meetings with estate agents, property developers, auctioneers and property managers across Namibia.

“The new players in the industry, like property developers and managing agents, are not regulated at all,” Unengu says.

The new bill aims to address these gaps and protect consumers.

“We hear horror stories of managing agents or developers taking people’s deposits and then the project doesn’t materialise,” Unengu says.

“The bill will establish a fidelity fund to safeguard these deposits.”

According to Unengu, the current act governing the property industry dates back to 1976, a time when the landscape was vastly different.
The proposed bill will see the establishment of a fund that will compensate consumers whose money has been stolen by property practitioners.

Unengu said the Fidelity Fund will be managed by NEAB and there is a fund that has been in existence.

“It’s an insurance fund similar to the one we already have for estate agents,” he explains, adding that property developers will be required to contribute to the fund and consumers will be able to claim compensation if they are defrauded.

Unengu also highlighted the importance of trust accounts for property practitioners.

“Every property practitioner must maintain two separate accounts: a business account for their operational expenses and a trust account to hold client deposits,” he says.

Unengu says consumer protection measures are already in place for some stakeholders.

“Even today, if a registered estate agent disappears with your deposit, you can claim from the existing Fidelity Fund,” he said.

The minister of trade says with the new bill, property practitioners will be required to have a Fidelity Fund Certificate before conducting and concluding any transaction.

“Once a Fidelity Fund Certificate is issued and a property practitioner then steals money held in trust, the consumer can claim this money back from the fidelity fund,” says Iipumbu.

“It is worth noting that this piece of legislation is consumer centric and aims to provide protection to the consumer within the property sector,” she says.

Gabriel Heita, a real estate agent, says the new bill would be welcomed in the industry.

“As a property practitioner – our new name now – I am happy with the bill. I did not become a property practitioner to make money, but to help people and be different,” says Heita.

He says the protection of consumers is to be applauded, as many suffer at the hands of real estate agents.

“I saw how people suffer at the hands of real estate agents. Some people are charging things that were not supposed to be paid for, or they will be sold a property without being told the hidden fees,” Heita says.

“This bill is a good one, because it’s consumer centric and now everyone who will be involved in a transaction is protected,” he says.
He adds that with the new bill there will be changes in the property sector.

“In the past, only the estate agents were regulated by the Estate Agents Act 112 of 1976, but with the new bill, even the property developers will be regulated, which is also good for the consumers,” Heita says.

He says consumers should make sure they use property practitioners that are registered and have valid Fidelity Fund Certificates.