Prohibition of Debit orders, stop orders and overdrafts on Trust Accounts

The Property Practitioners Regulatory Authority (“the PPRA”) has noted with concern instances where business property practitioners are authorising debit orders, stop orders and monthly subscriptions on trust accounts opened in terms of section 54(1) and/or section 54(2) of the Property Practitioners Act, 2019 (“the PPA”). 

Business property practitioners are hereby reminded that trust accounts are established solely for the purpose of holding monies on behalf of third-party clients and must be administered strictly in accordance with the PPA, the Property Practitioners Regulations (“the PPR”), and sound fiduciary principles. 

Accordingly, all business property practitioners are advised as follows: 

1. No debit orders, stop orders or monthly subscriptions may be authorised against a section 54(1) or section 54(2) trust account. 
2. No overdraft, loan, credit card or other credit facility may be linked to, attached to, or operated through a trust account under any circumstances. 
3. Trust accounts may not be overdrawn for any reason whatsoever, including as a result of bank charges, debit orders, payment reversals, or processing delays. 
4. Trust monies may only be utilised for the specific purpose for which the funds are held on behalf of a client and in accordance with the mandate or underlying transaction. 
5. Trust accounts may not be misused for the payment of personal expenses, business operational expenses, staff-related expenses, subscriptions, insurance premiums, software or platform fees or any other day-to-day business expenses unrelated to the administration of client trust monies. 

Property practitioners are reminded that they act in a fiduciary capacity in relation to trust monies and are required to exercise the highest degree of care, accountability and financial discipline in the management of such funds. 

All principal property practitioners are urged to immediately review the configuration and operation of their trust accounts and ensure full compliance with the requirements of the PPA and PPR. 

Issued By: 

PROPERTY PRACTITIONERS REGULATORY AUTHORITY