Under South African law, estate agents and property practitioners are held to strict compliance standards — especially when it comes to their entitlement to commission. One of the most critical of these requirements is holding a valid Fidelity Fund Certificate (FFC) at the time of performing any estate agency service.

Without it, an agent is not legally entitled to any payment or commission, even if a sale is successfully concluded. The Property Practitioners Act is clear on this point: if an agent operates without a valid certificate, they risk not only losing their commission but also triggering a series of legal consequences that can affect sellers, conveyancers, and the transaction itself.

In this article, we explain exactly when an estate agent is not entitled to commission, what happens to funds already paid, and why all parties involved in a property transaction should verify FFC compliance upfront.

When Are Estate Agents Not Entitled to Commission?

An estate agent or property practitioner is not entitled to receive any commission or payment unless they hold a valid Fidelity Fund Certificate (FFC) issued by the Property Practitioners Regulatory Authority (PPRA). This requirement applies strictly at the time the services are performed — not only when the transaction is finalised.

In terms of the Property Practitioners Act, this means:

• If an agent facilitates a sale, lease, or other property-related service without holding a valid FFC at the time of that service, they are legally disqualified from claiming commission.
• It is irrelevant whether the agent is experienced, whether the sale was successful, or whether the client was satisfied with their performance. No certificate = no commission.
• The rule applies to both the individual agent and the agency or firm they represent. Both must hold valid FFCs for payment to be legally permitted.

This provision is designed to protect consumers and uphold the integrity of the profession. By ensuring that only compliant agents are financially rewarded, the law creates accountability and enforces adherence to ethical and regulatory standards.

Why a Valid Fidelity Fund Certificate Is Non-Negotiable

The Fidelity Fund Certificate (FFC) is a legal prerequisite for operating as a property practitioner in South Africa. Issued by the Property Practitioners Regulatory Authority (PPRA), the FFC serves as proof that the agent or agency is properly registered, compliant with statutory requirements, and eligible to receive payment for services rendered.

The importance of the FFC lies in its role as a consumer protection mechanism. It ensures that:

• Agents are accountable to a regulatory body and have met professional standards;
• Consumers are protected by the Fidelity Fund, which compensates clients who suffer losses due to the dishonesty or negligence of an agent;
• The industry maintains ethical conduct and transparent business practices.

The Act provides no leeway for non-compliance. An agent who performs property services without a valid FFC — regardless of whether it lapsed, was not renewed, or was never obtained — cannot later fix the issue by applying retroactively. If the certificate was not valid at the time of service, any commission paid must be forfeited.

This strict stance protects clients from unregistered practitioners and encourages ongoing compliance from those in the industry.

What Happens if an Agent Acts Without a Certificate?

If an estate agent or property practitioner provides services without holding a valid Fidelity Fund Certificate (FFC), the consequences are immediate and serious — both for the agent and for any funds already received.

According to the Property Practitioners Act, the following applies:

• The agent is not entitled to any payment or commission, even if they successfully concluded a transaction.
• Any money received must be paid over to the Property Practitioners Regulatory Authority (PPRA). This includes commissions already transferred to the agent or agency — they are legally obliged to return the funds.
• The rightful recipient of the money (usually the seller) must then apply to the PPRA to recover the funds. This must be done within three years of the date the payment was made.
• If the rightful party does not claim the funds within three years, the money is forfeited to the PPRA, with no further opportunity for recovery.

This process not only results in a loss of income for the agent but can also delay payments to the seller and disrupt the transfer process.

Importantly, the responsibility does not fall on the client to verify FFC compliance. It is the legal duty of the agent to ensure that their certification is valid and up to date before rendering any service.

Conveyancers Cannot Pay Without Valid Certification

The obligation to ensure Fidelity Fund compliance doesn’t end with the agent. Conveyancers — the attorneys responsible for registering property transfers — are also bound by law to confirm that valid Fidelity Fund Certificates (FFCs) are in place before making any commission payments.

Specifically, a conveyancer may not release payment to an agent or agency unless:

• The individual agent who was involved in the transaction holds a valid FFC, and
• The estate agency or firm they represent also holds a valid FFC, and
• Both certificates are valid:
  • At the time the transaction was concluded, and
  • On the date of payment.

This double-check protects all parties and prevents the illegal disbursement of commission. If the conveyancer is not furnished with valid certificates, they are legally prohibited from paying — even if the transaction has registered at the Deeds Office.

For estate agents, this means that FFC compliance is not just a regulatory box to tick. It directly affects your ability to be paid for your work. For sellers and buyers, it provides an additional layer of protection, ensuring that only qualified, registered practitioners benefit from a sale.

The Three-Year Rule – Unclaimed Commission Is Forfeited

If an estate agent receives commission without holding a valid Fidelity Fund Certificate, that money must be paid over to the Property Practitioners Regulatory Authority (PPRA). However, the Act also provides a path for the rightful party — usually the seller — to reclaim those funds.

The seller, or any other person legally entitled to the money, must:

• Submit a claim to the PPRA;
• Within three years of the date the funds were paid over by the agent or agency.

If no claim is lodged within that three-year window, the money is forfeited to the PPRA permanently. This means the rightful owner loses all legal entitlement to the funds, and they become part of the Authority’s general resources.

The purpose of this provision is twofold:

• To prevent unlawful enrichment by non-compliant agents, and
• To encourage sellers and conveyancers to act promptly when FFC violations come to light.

For sellers, this underscores the importance of working only with registered agents. For agents, it’s a costly reminder that operating without a valid FFC can result not only in lost income but in serious reputational damage — and potential claims against them.

Protect Yourself – Check Compliance Before Paying

Whether you’re a property practitioner, a seller, or a conveyancer, it’s critical to confirm Fidelity Fund Certificate (FFC) compliance before any work is done or any commission is paid.

For estate agents and agencies, this means:

• Ensuring that both individual and agency FFCs are valid, up to date, and cover the relevant time periods.
• Keeping documentation ready to present to clients and conveyancers upon request.

For sellers, it means:

• Asking for a copy of your agent’s FFC before signing a mandate.
• Confirming that the agency representing you is properly registered.

For conveyancers, it means:

• Verifying both certificates before releasing commission — even after registration of transfer.

To make things easier, VDM Attorneys assists estate agencies and property professionals with full FFC compliance, including:

• Renewal reminders,
• Application support, and
• Ensuring your documents meet PPRA standards.

VDM Attorneys – Conveyancers You Can Trust

As registered and highly experienced conveyancers, VDM Attorneys works closely with estate agents, sellers, and buyers to ensure every transaction complies with the Property Practitioners Act — especially when it comes to FFC requirements and commission payments.

If you're involved in a property transaction and need trusted legal support, speak to the conveyancing team at VDM Attorneys in Sandton.