BEE affidavits – this is what you should do

MAIN IMAGE: Duncan de Groot, Executive Chairman of EVASA

Staff Writer

There has been a fair amount of confusion around the use of BEE affidavits for the Fidelity Fund Certificate (FFC) application process. Several estate agents are of the view that they can use the Exempt Micro Enterprise (“EME”) certificate generated by the CIPC, or can alternatively depose to a general EME affidavit, and submit this as proof of a valid BEE Certificate, as required for their FFC application, as their turnover is less than R10 million per annum.

According to Duncan de Groot, Executive Chairman of EVASA (Empowerment Verification Agency of South Africa), the CIPC certificate is indeed valid for an EME under the generic codes, which defines an EME as any entity with a turnover less than R10m per annum.

“However, the amended Property Sector Code puts different revenue thresholds on an EME status.

The amended Property Sector Code includes in its scope of application the following property services:

  • Property Management
  • Facility Management
  • Broking
  • Estate Agents

“This means that any Property Practitioners that fall into this Scope of Application must comply with the amended Property Sector Code and cannot utilise the generic Codes of Good Practice for their BEE compliance,” De Groot explained.

“For an estate agent, the EME threshold is R2.5m, as opposed to R10 million in the generic codes. If your turnover exceeds R2.5m in your previous financial year, then you cannot use the Property Sector Code EME affidavit. You will need to undergo a BEE verification to receive a valid BEE certificate.

“Coupled with this, the threshold for a Qualifying Small Enterprise (“QSE”) in the generic Codes is R50 million per annum. In the Property Sector Codes, the threshold for an estate agent to qualify as a QSE is R35 million per annum,” he said.

This is summarised in the table below:

It is noted that an estate agent that qualifies as a QSE because of their turnover, and who has black ownership of 51% or greater, can also utilise an amended Property Sector Code QSE affidavit as their valid BEE certificate, and does not need to go through a verification.

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