After warning FSPs, state now threatens estate agents on BEE
After ratcheting up pressure on licensed financial services providers (FSPs) to comply with transformation targets, government has turned its attention to real estate agents.
In a letter to the industry this month, the Property Practitioners Regulatory Authority (PPRA) has warned practitioners that failure to comply with BEE legislation “may result in the inability to obtain or renew a fidelity fund certificate (FFC)”.
It says that according to the Property Practitioners Act, “it is mandatory for all principal property practitioners to possess a valid BEE certificate”.
Skills development filings are due on Tuesday (30 April). It requires these filings to ensure that points for the skills element of the BEE scorecard can be “verified”.
Threshold
At a webinar held by the PPRA in March, the regulator’s legal manager and acting transformation manager, Deli Nkambule, made it clear that the PPRA “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).”
This was the first time this specific threshold was mentioned.?At the start of March, the PPRA issued a wordy and completely unspecific statement calling on “all stakeholders to drive transformation in the real estate sector”. No specific initiatives or timing or thresholds were included in the statement.
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Legal ?requirement
Property practitioners are not allowed to legally operate without a valid fidelity fund certificate.?These are issued every three years, with the next batch due in 2025. In 2022, it said it ‘required’ BEE certificates but issued fidelity fund certificates regardless of whether these were submitted or not.
Entities with annual turnover of under R2.5 million qualify as exempt micro enterprises and aren’t subject to this regulation.
Qualifying small enterprises are those with annual turnover of under R35 million. These (and large enterprises) will need to undergo a formal audit to obtain a BEE certificate at their expense.
The amended property sector scorecard effectively requires entities to be at least Level 8 contributors for them to be compliant.
To read the full article visit: https://www.moneyweb.co.za/news/south-africa/after-warning-fsps-state-now-threatens-estate-agents-on-bee/
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