Are estate agents at risk of losing their Fidelity Fund Certificates?

Estate Agents will have to provide the PPRA (Property Practitioners Regulatory Authority) with a valid and Compliant (Level 1 to 8) B-BBEE Certificate when applying for their new Fidelity Fund Certificate.? Up to date a Non-Compliance B-BBEE Certificate was accepted, however Estate Agents have now been notified that they will have to provide a valid and compliant B-BBEE Certificate or be at risk to lose their Fidelity Fund Certificate.

All Property practitioners are regulated by the Property Practitioners Regulatory Authority (PPRA) in accordance with the Property Practitioners Act no 22 of 2019 (“the Act”) which came into operation on 1 February 2022.? One of the purposes of this act is to provide for transformation of the property market to benefit historically disadvantaged individuals.

According to Section 50(a)(x) of the Act, the Property Practitioners Regulatory Authority must withhold a property practitioners Fidelity Fund Certificate if the property practitioner is not in possession of a valid and compliant BEE certificate. Property Practitioners must apply to the Authority for a Fidelity Fund Certificate every three years and a property practitioner may not use or display a lapsed Fidelity Fund Certificate. Any person who fails to obtain a Fidelity Fund Certificate and still operates as a Property Practitioner is guilty of an offence.

The Property Sector Charter Code determines how property practitioners can obtain a valid BEE Certificate or affidavit. According to the Property Sector Charter Code, Estate Agents with a turnover below R 2,5 million per annum automatically qualify for a Level 4 BEE certificate.? If their turnover exceeds the R 2,5 million threshold, and they have less than 51% black ownership, they must obtain a valid BEE certificate based on all elements of the B-BBEE scorecard, from a SANAS Accredited Verification agency.

Contact us at Elevate Advisory Partners – [email protected] to do a GAP analysis and strategy for you to obtain your valid B-BBEE certificate.