BEE Changes in the Property Industry – August 2024

BEE has recently been a volatile topic in the real estate industry. In August 2024, the PPRA ruled that all estate agency firms must be “compliant” with their BEE status. This would have implemented a minimum BEE rating and had a detrimental impact on white real estate agency firms and the industry.

Rebosa, an industry stakeholder, disputed this ruling with the PPRA, stating that the term VALID cannot be construed as COMPLIANT, and in as much as transformation in the industry is critical, this ruling will turn the real estate industry into turmoil.

With huge relief, the PPRA announced that they accept the term “valid” in the context of BEE certificates, which does not imply “compliant.” No minimum score is required, but your BEE certificate must be obtained from a SANAS-accredited agency.

It is the responsibility of all estate agency firms to strive towards equality within the real estate industry and to promote and assist previously disadvantaged individuals so that they can enter the property arena not just as estate agents but as managers, principals, franchise owners and business owners.

To do that, skills must be applied, and how better to use the tools that the government is providing? As we know, the government in South Africa legislated Broad-Based Black Economic Empowerment, forcing businesses that want to expand their reach, obtain government contracts, and increase their BEE rating to comply with the BEE scoring card.  They did this by giving points to businesses that include black management positions, black skill development, and giving funding to black social funds.

The government reached out further to award points to businesses that only take on the services of providers with a high rating card.

The message is clear.  It is the responsibility of all South African business owners to ensure that their businesses follow the five basic strategies of BEE:

1. Increase Black Ownership:

Real estate agencies can seek out black investors or partners to increase black ownership in the business. The high weighting of the ownership element has a significant impact on the BBBEE score.

If your firm falls into the category that has a turnover of less than R10m/annum, then your firm will automatically be classed as Level 1 if you have 100% black ownership, and automatically classed as Level 2 if you have 51% black ownership.

2. Diverse Management:

Promoting or hiring black individuals into senior management and executive positions improves compliance in the management control category. Remember, it is not only management positions that are important, but that equality in positions throughout the business is transparent and shows consistent black percentages.

3. Skills Development:

Real estate agencies can invest in training programs for black employees, particularly in real estate skills, leadership development, and professional certifications. This not only improves their BBBEE score but also strengthens the agency’s workforce.

4. Supplier and Enterprise Development:

Agencies can partner with black-owned suppliers, such as maintenance contractors, interior designers, or property developers. They can also offer mentorship or support to black-owned real estate start-ups to boost enterprise development points.

5. Socio-Economic Initiatives:

Agencies can engage in community upliftment projects, like affordable housing initiatives, property literacy workshops, or supporting black-owned social enterprises that contribute to the development of disadvantaged communities.

How to apply BEE to your estate agency firm

As long as you, as a business owner focus on the upliftment of black people within your industry, you will increase your scorecard.

A higher scorecard will help when you want to achieve grants from SSETA for your property practitioners. Follow these five steps to achieving grants with SSETA:

1. You will apply to SSETA to register as a stakeholder, which can be done on their website. Once done, you will investigate the grants they offer and apply for grants, bursaries, or learnerships as an estate agency employer.
2. Submit a Workplace Skills Plan WSP and Annual Training Report ATR showing skills development is a priority element of your BEE score, especially in scarce skills areas like real estate for your black employees.

WSP: The Workplace Skills Plan

It is a forward-looking document outlining your staff’s planned training and development activities for the year. It identifies the skills gaps within the company and the training initiatives that will be implemented to address them.

ATR: The Annual Training Report

This backwards-looking report details the training activities undertaken in the previous year. It reflects whether the company met the training goals set out in the WSP.

3. Skills Levy is not necessary to apply for a bursary; it is a bonus if you pay the skills levy. These levies are obligatory for businesses with a monthly payroll of R500 000 or more.

SSETA will consider all applications and decide where to appropriate the grants.

Once you achieve your grant, you must complete monthly reports, supply proof of training and proof of payment of stipends to learners, and account for every cent paid to you for that grant. The grant monies may only be spent on increasing the learner’s knowledge and supplying him with tools to achieve success.

Acronyms:

PPRA: Property Practitioners Regulatory Authority
B-BBEE: Broad-based black economic empowerment
SANAS: South African National Accreditation System
SSETA: Services Sector Education and Training Authority
WSP: Workplace Skills Plan
ATR: Annual Training Report
SETA: Sector Education and Training Authority

Disclaimer:

Property Principal Services is not a SANAS-accredited service provider. To ascertain your ratings, you must obtain a rating certificate from a SANAS provider.