The latest amendments to the Property Practitioners Act in South Africa makes it compulsory for Property Practitioners to have a valid BEE Certificate. Without it, they will not be able to renew their Fidelity Fund Certificate (FFC). This means all Property Practitioners now need a valid BEE Certificate to operate.
In accordance with Section 48 of the Property Practitioners Act it is imperative to note that no entity may operate as a property practitioner without possessing a valid Fidelity Fund Certificate (FFC). Moreover, the Act specifies that the issuance of an FFC is contingent upon the possession of a Broad-Based Black Economic Empowerment (B-BBEE) certificate.
A low threshold for annual turnover
As of the latest regulatory update, it is now mandatory for all real estate agencies with an annual turnover exceeding R2.5 million to furnish a SANAS accredited B-BBEE certificate of at least a level 8 when applying for the renewal of their FFC.
Thato Ramaili, CEO of the Property Practitioners Regulatory Authority (PPRA), emphasized that adherence to B-BBEE requirements for the upcoming round of FFC renewals is not up for negotiation.
Property Practitioners warned to act now
In light of these regulatory changes, we strongly encourage all real estate agencies to take immediate action. To maximize scoring on the B-BBEE Scorecard as per the Amended Property Sector Code 2017, businesses must develop and implement a range of strategies during this current financial period of 2024/25. This preparation will position your business for a successful B-BBEE rating in the subsequent financial period of 2025/26.
What is the urgency?
BE WARNED: ATTEMPTING TO IMPLEMENT ANY SYSTEM AND/OR MEASURE TO ENSURE COMPLIANCE SHORTLY BEFORE YOU MUST APPLY FOR THE RENEWAL OF YOUR FFC WILL FAIL, AS THESE MEASURES SHOULD HAVE BEEN IMPLEMENTED IN THE PREVIOUS FINANCIAL YEAR.
Failure to comply may result in penalties and impact the ability to conduct business within the real estate sector. According to Section 50 of the Act, the PPRA reserves the right to refuse the issuance of an FFC to any individual or entity who:
- Is not a South African Citizen or does not lawfully reside in the Republic.
- Has been found guilty of contravening this Act, the Estate Agency Affairs Act, or any similar legislation within the preceding 5 years.
- Has been convicted in a civil or criminal proceeding, wherein their actions were deemed fraudulent, dishonest, unprofessional, dishonourable, or in breach of fiduciary duty, or if they were sentenced to imprisonment without the option of a fine.
- Is an unrehabilitated insolvent or of unsound mind.
- Has been dismissed from a position of trust due to improper conduct.
- Does not possess a valid Tax Clearance Certificate.
- DOES NOT POSSESS A VALID BEE CERTIFICATE
- Fails to comply with the prescribed standards of training.
- Lacks the practical experience determined by the Authority.
For further clarification or assistance regarding B-BBEE certification, contact Baartman & Du Plessis Attorneys.
