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BEE Now A Requirement In The Property Professionals Act What Does That Mean For The Real Estate Industry?

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Johannesburg, 03 March 2022 : The enactment of the Property Practitioners Act on 1st February 2022 has brought many exciting changes to the property sector including the requirement now for all property practitioners to have valid B-BBEE certificates and be B-BBEE compliant.

BEE was first introduced in the form of legislation in 2003. Government through the Department of Trade and Industry (Dti) introduced the revised Codes of Good Practice in October 2013. The revised Codes aim to enhance the implementation of B-BBEE in a meaningful and sustainable manner and contain principles and guidelines that will facilitate and accelerate the implementation of B-BBEE. The purpose of the Codes is to assist and advise the public and private sectors in the implementation of the B-BBEE Act.

The objectives of the codes of Good Practice are to:

  • Increase the proportion of black ownership and control of entities.
  • Increase the proportion of black women participation in entities since they have been marginalized for a long time.
  • Increase the up skilling of black employees and the unemployed.
  • Broaden the pool of economic opportunities and job creation.
  • Increase the inclusion of community and broad-based enterprises and co-operatives in economic opportunities.

SALIENT FEATURES

All Property Practitioners fall under the Property Sector Codes which is regulated by Government Gazette no 40910 dated the 9th of June 2017.

Exempt Micro Enterprises (EME’s)

EMEs are defined as businesses with an annual turnover below R2,5million. These businesses are exempt from calculating a full B-BBEE scorecard. They are only required to produce an EME B-BBEE affidavit

EME’s are automatically given a level 4, but 100% black owned EMEs are given a level 1, and 51% black owned EME’s are given a level 2.

Qualifying Small Enterprises (QSE’s)

QSE’s threshold qualification is an annual turnover between R2.5 million and R35 million.  QSE’s that are 100% black owned are given a level 1, and 51% black owned QSE’s are given a level 2 and these QSE’s only require to give an affidavit to their customers.  All other QSE’s require that a BEE verification audit be done by a SANAS accredited agency

QSE are required to comply with Ownership as a compulsory element and either Skills Development or Enterprise and Supplier Development.

Generic Entities

These are businesses that have an annual turnover above R35 million. It is a requirement that a BEE verification audit be done by a SANAS accredited agency, they are also required to comply with all the priority elements which are: Ownership, Skills Development and Enterprise Supplier Development.

If a Company does not achieve the minimum score in one of the priority elements, the calculated BEE level will decrease by one level. For example, if your company has no black ownership but reaches level 4, it will be dropped down to level 5.

BEE STATUS LEVELS AND THEIR SIGNIFICANCE

Level Point Achieved Procurement Recognition*
1 100 135%
2 >95 but <100 125%
3 >90 but <95 110%
4 >80 but <90 100%
5 >75 but <80 80%
6 >70 but <75 60%
7 >55 but <70 50%
8 >40 but <55 10%
Non-Compliant <40 0%

Procurement Recognition* – Multiply each Rand spend with supplier by the corresponding percentage depending which level have been achieved to get points under Enterprise and Supplier Development.

THE BEE SCORECARD

The Various Elements of a QSE Scorecard are:

  • Ownership
  • Management & Employment Equity
  • Skills Development
  • Enterprise & Supplier Development
    • Procurement
    • Supplier development
    • Enterprise development
  • Socio Economic Development

Each Element has certain targets to be met and have subsections, for ease of reference below is a QSE Scorecard with all the relevant targets. By way of an example certain points have been included to show how an overall score has been achieved. This is done to indicate how a company can achieve at least a level 8 without ownership points

As a recognised leader in the bond origination industry, MultINET Home Loans acts with integrity in dealing with employees and business partners. Our core values of honesty and transparency are the foundation for a transformation strategy leading the way to even greater success.

As the only level 4 BEE compliant mortgage originator in South Africa, Multinet Home Loans is leading the way in transforming the mortgage origination sector and is available to assist

practitioners in navigating their own transformation journeys. Should you need a better understanding of the compliance requirements, or you need assistance in ensuring your compliance we can assist you www.multinet.co.za 0860 545 444 info@multinet.co.za

Shaun Rademeyer, CEO MultiNet Home Loans

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More Info on BEE NOW A REQUIREMENT IN THE PROPERTY PROFESSIONALS ACT WHAT DOES THAT MEAN FOR THE REAL ESTATE INDUSTRY? here: https://multinet.co.za

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.