Real estate agencies in South Africa are facing a new challenge imposed by the Property Practitioners Regulatory Authority (PPRA). The PPRA now mandates that all real estate agencies meet level 8 Broad-Based Black Economic Empowerment (B-BBEE) requirements, posing potential difficulties for a significant portion of the industry.
Under Section 48 of the recently enacted Property Practitioners Act, which took effect in February 2022, entities are prohibited from operating as property practitioners without a valid Fidelity Fund Certificate (FFC). Moreover, the act stipulates that an FFC cannot be issued without a BEE certificate.
B-BBEE compliance is categorized into Exempt Micro Enterprises (EME), Qualifying Small Enterprises (QSE), and Generic, based on annual turnover. EMEs, with turnovers under R2.5 million, represent the smallest category, while Generic businesses have turnovers exceeding R35 million.
Initially, only a valid BEE certificate was deemed necessary for FFC issuance. However, Nkambule clarified that the PPRA now requires a compliant BEE certificate, defined as scoring 40 points or more (equivalent to BEE Level 8). Certificates scoring below 40 points are considered non-compliant. However, should your Ownership not meet the required 40% compliance, you will need to obtain 55 points to obtain your BEE Level 8.
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