The Property Practitioner's Act, No. 22 of 2019 (the "Act") requires every property practitioner to apply every three years to the Property Practitioners' Regulatory Authority (the "Authority") for a Fidelity Fund Certificate ("FFC") in order to practice as such.
The Act states that an FFC may not be issued unless the applicant submits a valid Broad-Based Black Economic Empowerment ("B-BBEE") certificate.
To clarify confusion around this requirement, on 13 March 2024 the Authority clarified that an FFC may not be issued to a Property Practitioner without it reaching a minimum level 8 compliance under the B-BBEE legislation. This effectively means that all Property Practitioners are required to be B-BBEE compliant (albeit at the lowest compliance level under the B-BBEE legislation).
The B-BBEE requirements under the Act aim to promote equity and redress past racial and gender discrimination and imbalances in the broader real estate industry in South Africa.
The Act also expands the ambit of "property practitioner" to include property managers, auctioneers, franchisees, property developers, providers of bridging finance and bond brokers.
This shift in the Authority's enforcement of the Act may have significant implications on small real estate businesses, particularly sole proprietorships in this sector.
These requirements are already being challenged by various industry players and lobby groups, such as Sakeliga and other affected businesses, objecting to the requirement to obtain a compliant B-BBEE certificate.
As such, actors within the property sector should be cognisant of this new revision, with the Authority making plans to enforce stricter provisions to allow for optimal business.
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