Changes to Be Made to Estate Agents Deeds of Sale

An important change has been made to the legislation relating to the investment of trust monies and it is very important that all Estate Agents are aware of same and amend their documentation accordingly.

The Attorneys Act 53 of 1979 was replaced by the Legal Practice Act 28 of 2014, with effect from 1st November 2018. Section 78(2A) of the Attorneys Act 53 of 1979, dealing with the investment of trust monies on behalf of the client, is now replaced with Section 86(4) of the Legal Practice Act 28 of 2014.

Estate Agent’s Deeds of Sale should now refer to the Purchaser’s deposit being paid to the Conveyancer and invested in a trust bank account in terms Section 86(4) of the Legal Practice Act 28 of 2014, compared to previous Deed of Sales which referred to the Purchaser’s deposit being paid to the Conveyancer and invested in a trust banking account in terms of Section 78(2A) of the Attorneys Act 53 of 1979.

Previously, interest accruing on money invested in terms of Section 78(2A) of the Attorneys Act 53 of 1979 was payable to the person on whose behalf it was invested in its entirety. Under Section 86(4) of the Legal Practice Act 28 of 2014, 5% of the interest accrued on monies so invested must be paid over to the Fidelity Fund and vests in the Fidelity Fund. The remaining 95% is paid to the person on whose behalf the money was invested. This took effect from 1st March 2019.