In terms of the Real Estate Practice Act, Black economic empowerment (BEE) participation will soon be an obligation in the real estate industry.
Piet Le Roux, CEO of the business organization Sakeliga, is not in favor of the new legislation. He explains that those who previously met the necessary requirements could act as real estate professionals but with the new developments they will now have to have a BEE certificate as a prerequisite.
Le Roux believes that disguising participation in BEE processes as a professional requirement is blatantly harmful, unconstitutional and unfair. He points out that this is unacceptable political interference with the freedom of the industry and the prosperity of the industry for clients as well as the economy.
The new legislation provides that the Real Estate Practices Regulatory Authority may not issue a Fidelity Fund Certificate to any person who does not have a valid BEE certificate. No person may, therefore, act as a real estate practitioner without a Certificate of Fidelity Fund being issued to him or her.
According to reports by Maroela Media, when talking about a real estate practitioner, it includes not only real estate agents, but also auctioneers, landlords, leasing or selling property advertisers, property managers, developers, financiers and their agents, part-time marketers as well as all the directors of legal entities conducting these activities.
“The implication is clear. The law imposes BEE on everyone who has anything to do with the industry. The first step is to make BEE part of the licensing requirements for the industry. The next steps will be to require specific BEE levels or penalize and other penalties where BEE levels are not achieved,” explains Le Roux.
Although the Property Practitioners Act was signed in September, the law will only come into effect on a date proclaimed by the president in the Government Gazette. That date has not yet been announced.
“If the goal of BEE is fair empowerment and economic prosperity for everyone in South Africa, it will fail completely. There is a public consensus on this. Today it is common to hear how analysts, businesspeople, politicians, economists and lawyers from all communities in South Africa criticize BEE. However, despite the obvious problems with BEE, the policy is being applied more sharply and sharply, and included in more and more laws. Of these, the signing of the Property Practices Act is the latest example,” Le Roux believes.
According to a statement, on November 26, Sakeliga will host a workshop for members of the real estate industry at its Centurion headquarters with a view to legal action. “Business leagues are currently investigating the possibility of contesting the constitutionality of these BEE requirements before the law comes into force,” the statement states.