The implementation of the Consumer Protection Act has been postponed to the 1st of April 2011 as the Minister of Trade and Industry is still in the process of finalising the regulations to the Act.  They are also putting in place the structures required to implement the Act, namely the Consumer Commission and the Consumer Tribunal which will deal with complaints and disputes.

The Consumer Protection Act brings about a fundamental change to our common law which up to now has regulated contracts concluded between suppliers and consumers.  It also deals with the protection of consumers in general.

It has created basic 'Consumer Rights' - such as the right not to be discriminated against on the basis of for example sex or race in the conclusion of contracts, and outlaws 'unconscionable conduct' on the part of a supplier of goods or services and protects consumers against unfair or misleading marketing practices.

Estate agents will be well advised to familiarise themselves with the provisions of the Act as they will now also have a legal duty of care towards buyers in addition to their duty in terms  their mandate to their sellers.

In terms of the Consumer Protection Act, an estate agent must ensure that his or her marketing of a product (i.e. the property to be sold) ties up with the actual nature and quality of the property that is sold.  The days of 'Sales Talk' is over and if an agent is aware of a defect or potential problem with a property, they would be duty bound to bring this to the attention of the buyer, failing which they may face a claim against their agency by virtue of their false or misleading conduct. 

By way of example, if an estate agent makes a statement to the effect that a property is zoned commercial when this is not the case, and if this has a material effect on the value of the property purchased, the buyer may well in terms of the CPA have grounds to claim the difference between the purchase price paid and the actual market value of the property from the agent.

It is thus critical that estate agents make themselves fully acquainted with the nature and extent of a property, and of defects which are reasonably foreseeable before they take a property on their books.  It may also be a good idea to obtain an indemnity from a seller to protect the agent against sellers who may not have made a full disclosure to them at the time that the property is listed with the agency and the mandate is signed.

Estate agents should also review their mandates with sellers to make sure the terms thereof are just and fair, if not, they may have difficulty enforcing commission claims.