New property bill comes under fire

Johannesburg - Efforts to transform the property industry are being thwarted by the very laws touted as encouraging change.

That was the warning from some in the industry at hearings held in Durban on the new Property Practitioners’ Bill.

Department of human settlement officials reminded guests at the start of hearing that transformation was one of the pillars of the bill and that it was part of efforts to correct apartheid distortions.

Quoting from President Jacob Zuma’s state of the nation address, William Jiyane, a deputy director-general in the department, pointed out that less than 5% of the country’s R7 trillion-plus property industry was in black hands.

But the message did not wash with some of the estate agents and other the delegates present.

Edwin van Niekerk, KwaZulu-Natal chairperson of the SA Property Owners’ Association, initially struck a conciliatory note in his submission to the hearing.

The industry, he said, was happy to do its bit to bring more black people into the fold, he said.

However, he then went on to castigate the department for, in his view, the bill’s failure to lift the compliance burden on the industry: “What I see is barriers to transformation,” he said.

A key issue Van Niekerk – who is also a director of Maxprop, a KwaZulu-Natal-based property company – raised was the requirement in the bill for all agency directors to have a principal-level fidelity fund certificate.

This required a laborious three-year process, said Van Niekerk, who proposed that, instead, only one director in a firm should be required to hold a principal certificate.

“The question is: How is the bill enabling transformation?” he asked the hearing.

Advocate Jan Tladi, a legal adviser to the Estate Agency Affairs Board, replied that a committee had been set up and “a whole range of measures are being contemplated to mitigate those barriers”.

Tladi also mentioned a planned human settlements academy, which was expected to ease the training burden on estate agencies.

Jan le Roux, CEO of the Real Estate Business Owners of SA, said the bill “paid lip service to transformation”.

He said apart from requiring practitioners to have a BEE certificate – “they think they are waving a magic wand with certificates” – the bill offered little else to advance transformation beyond requiring the board’s successors to promote transformation in the sector.

He queried whether the draft law was constitutional, saying estate agents were being forced to have a certificate merely to operate.

He was disappointed that the bill opened the way to add new compliance burdens.

The high costs of maintaining such accounts was “killing small business”, particularly one-man bands and newcomers; yet, for the most part, served no purpose, said Le Roux.

The SA Institute of Black Property Professionals offered a measured reaction to the bill.

“We welcome any move to professionalise the industry. But if this is the intention of the legislation, it must be properly written,” said Mashilo Pitjeng of the institute’s policy committee.

He said the institute would support standards that were specific on ownership, enterprise development, skills development and employment equity.

One of striking differences between the bill and the act, estate agents agreed, was the inclusion of auctioneers, developers and property managers with agents, under the catch-all “property practitioners”.

Although this had been expected in some quarters, the further addition of mortgage originators, home inspectors and property facilitators made the definition too wide, said some.

Tladi told the hearing the bill allowed for the minister to exempt some service providers, but he offered little further clarity.

In the meantime, these disciplines can brace themselves for a host of new compliance requirements.