The National Property Practitioners Council (NPPC) believes that the Property Practitioners Act, which sets to address issues of transformation, is an unprecedented step in the right direction in a sector where only a quarter of the over 40,000 practitioners are black. The Act was signed into law by President Cyril Ramaphosa in 2019 and comes into effect on 1 February this year.
Section 21 of the legislation seeks to address property sector transformation and to establish a Property Sector Transformation Fund. The Act states that the Property Practitioners Regulator Authority must implement and assess measures to progressively promote an inclusive and integrated sector, and also introduce measures which may include incubation and capacity-building programmes to redress the imbalances of the past, among others.
Section 21 also mandates the authority to establish the Property Sector Transformation Fund within six months of its establishment. The fund must be used to promote black-owned property firms and principals, and to promote and encourage the participation of the historically disadvantaged people due to non-compliance. “The council is even more optimistic that one of the four programmes that the fund is intended to facilitate is principalisation,” NPPC CEO Joseph Sakoneka told Vutivi News.
“This programme is meant to specifically capacitate black practitioners that are in the real estate space but are not able to scale. “It should, however, be noted that even if practitioners can be capacitated, the general public needs to give them mandates to facilitate immovable property transactions in order to be sustainable.” Sakoneka said that it was exciting that up to 5% of the money from the fund would be used for consumer education.
He said the transformation would address the many barriers of entry into the market and allow black practitioners to get a bigger slice of the property pie. “The list of challenges that SME firms face are many, and these include a lack of enterprise development, lack of access to market, and a lack of funding and other resources,” Sakoneka noted. “It is one thing to meet all the prescribed education and training standards, but if you do not have the skills to run the business, you will still remain small or medium-sized.”
In some estates, practitioners are required to pay high accreditation fees in order to be allowed to sell or rent properties on behalf of sellers or landlords respectively. “These anti-transformation practices continued for a very long time with specific legislation addressing them. What is important to note under the new Act is the fact that these practices are prohibited,” he also said.