Trust Account Exemptions - Does your Business Qualify?

Hello Property Practitioners!

The Property Practitioners Act has introduced a lot of new rules and regulations, which we will get into one step at a time, but one of the interesting ones, are trust account exemptions.

The Estate Agency Affairs Act previously made it compulsory for all real estate agencies to open and keep a trust account, which came with its one set of headaches, in the form of Audit fees, expensive administration, and the list goes on.

The rules have now changed to allow for exemption from keeping a trust account. The following criteria is provided:

1. If a Business Property Practitioner has Never received any trust monies;

2. If a Business Property Practitioner no longer receives trust monies;

3. If a Business Property Practitioner has appointed a Payment Processing Agent that specializes in the distribution of trust monies and will not keep their own Trust Account.

4. Body Corporate Managing Agents solely working from accounts opened i.t.o 21(4) of the Sectional Titles Schemes Management Act 8 of 2011.

The PPA also states that Business Property Practitioners are allowed to keep a separate business / savings account from their trust account, which must be registered with the PPRA.

There are advantages to not keeping a trust account, for example, if you are below the threshold for annual turnover and you do not have a trust account, you do not need your accounting records audited, instead, your annual financial statements can be compiled and reviewed by a professional accountant. This will save a Business Property Practitioner a lot of money!

If you want more information regarding trust account exemptions, or believe your business qualifies for exemption, please contact Agent Aid here for further assistance!

With Love,