In 2022, the Property Practitioners Act ("PPA") introduced the possibility for property practitioners to apply for exemption from holding their own trust accounts in certain circumstances, following due process.
Since the Act came into effect, PayProp has worked closely with the Property Practitioners Regulatory Authority to develop a fully-defined pathway for rental agents to secure an exemption. Although the exemption application procedure was clearly set out in Regulation 2 of the Act, the process required further streamlining to avoid possible unintended consequences.
The good news for PayProp clients is that we are currently the only duly registered payment processing agent under the Act, making our users uniquely eligible for exemption as long as you meet the prescribed criteria and follow the prescribed process!
This gives PayProp-powered agents a privileged pathway to exemption. Securing an exemption also streamlines the audit process for property practitioners, saving you many hours and much stress every audit season.
Securing an exemption
As a result of our work with the Property Practitioners Regulatory Authority (PPRA) and the kind assistance of our auditors PwC, we can now report that we have agreed the following procedure for PayProp clients to secure an exemption:
- First, your agency must request an Annexure 6 letter and an agreed upon procedures (AUP) letter from us. If our requirements are met, we will issue the Annexure 6 letter at the same time that our auditors issue the AUP letter as detailed below. Our requirements are:
- Your agency’s PPRA PIN
- A copy of your firm’s valid Fidelity Fund Certificate (“FFC”)
- Our auditors will issue an AUP letter confirming the relevant trust account information.
- Once received, you must submit this AUP letter together with the Annexure 6 letter that PayProp provides to your own auditors. This enables them to prepare the winding-up audit report that they must submit to the PPRA.
- The auditors’ cost of issuing this AUP letter will be borne by PayProp for the first application, subject to the PPRA not amending its Schedule 9 requirements for payment processing agents. If the first application is unsuccessful, the cost of AUP letters for second and subsequent applications will be charged to you.
How long will the exemption process take?
As part of the streamlining process, it has been agreed that Annexure 6 and AUP letters will be issued on a quarterly basis, i.e., shortly after:
- the end of February
- the end of May
- the end of August
- the end of November
This is because PayProp must provide the relevant trust environment information to our auditors at the end of the quarter so they can issue the AUP letter.
Our Annexure 6 letter and PwC's AUP letter will be dated the last day of the preceding quarter. If your exemption application is approved by the PPRA, they will consider the date on our Annexure 6 letter and/or PwC’s AUP letter to be the effective date of your exemption and backdate their exemption letter accordingly.
Not a PayProp client? To find out how you too can become exempt, book a demo with one of our platform experts.
