BEE rules for real estate agents in South Africa non-negotiable: property authority

 ·2 May 2024

The Property Practitioners Regulatory Authority (PPRA) says despite precedents set in the past, level 8 BEE compliance is now non-negotiable for all real estate agencies with a turnover of more than R2.5 million.

In April, Jan le Roux, CEO of the Real Estate Business Owners of South Africa (Rebosa), voiced his concern over what he called a surprise shift in the PPRA’s Broad-Based Black Economic Empowerment (B-BBEE) requirements for the next round of Fidelity Fund Certificates (FFCs) for 2025.

Section 48 of the new Property Practitioners Act (which came into effect in February 2022) states that no entity may act in the capacity of a property practitioner without a valid FFC, and it further makes it clear that an FFC may not be issued without a BEE certificate.

According to Le Roux, the only requirement is a valid BEE certificate issued by a SANAS-registered verification entity, and no minimum score is currently necessary.

He added that most BEE certificates from the previous FFC round were noncompliant, with the majority scoring below 40 points.

Despite this, Le Roux said the PPRA issued FFCs without the minimum requirement, mainly for information-gathering purposes.

However, this appears to have changed.

Legal manager and acting transformation manager at the PPRA, Deli Nkambule, explained that “the PPRA’s position is that it will not issue an FFC unless a compliant BEE certificate accompanies the application.

“The accepted level of compliance is 40 points or more (BEE Level 8). You will not be issued a BEE certificate if you score below 40 (making your BEE certificate non-compliant),” she said.

Le Roux said this is a major concern, especially for small businesses, sole proprietorships, “one-man bands or mom-and-pop shops,” as he calls them because it amounts to more than 50% black ownership.

Responding to Le Roux’s concerns, the PPRA CEO, Thato Ramaili, doubled down on Nkambule’s comments and said despite precedents set in the past, compliance to the BEE requirements for the next round of FFCs is non-negotiable.

“Regarding Rebosa’s points, while precedents may have been set in the past to allow additional time for industry alignment, it is imperative to underscore that compliance with regulations such as those set forth by the Property Practitioners Regulatory Authority (PPRA) is non-negotiable.

“PPRA plays a vital role in ensuring compliance, and it is incumbent upon all industry stakeholders, including REBOSA, to proactively work towards meeting these requirements,” said Ramaili.

He added that it is essential for all organisations within the industry to remain cognizant of compliance obligations.

“While individual businesses ultimately bear the responsibility for compliance, industry associations such as Rebosa have a significant role in supporting their members and facilitating compliance efforts.

“Despite the challenges posed by regulatory changes, it is encouraging to see the initiatives undertaken
by various entities within the industry to drive transformation,” he said.

Moving forward, Ramaili said the PPRA remains committed to working collaboratively with all stakeholders to ensure a smooth transition and uphold industry standards.

Read: BEE shock for real estate agents in South Africa

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