Many, many wrongs and hardly a right in sight

Many, many wrongs and hardly a right in sight

MAIN IMAGE: The first slides from the EAAB’s presentations on their plans to assist with transformation in the property sector. On the left the one made to Parliament last year and on the right, the one showed recently at engagement workshops for PDI’s.

Jan le Roux

There are many barriers to entry in the real estate industry – ongoing compliance issues coupled with the costs related thereto favour bigger established businesses and seriously inhibit start-ups.

This is a long-held view of Rebosa, which has been communicated to all asunder during Rebosa’s continuous efforts relating to the unfortunate passage of the Property Practitioners Bill as is. This Bill, in itself, is in many ways a stumbling block to transformation – not the silver bullet as some purport it to be.

Property Professional reported on this transformation initiative of the EAAB and a torrent of mails/ comments followed, to Property Professional and in social media.

Rationally no one can argue that there is not a dire need for transformation in the industry. Appropriate, sensible initiatives will have support.

To start with, what is wrong with the approach and announcement by the Estate Agency Affairs Board (EAAB) of their Transformation PDI Resolution.

The first logical step should have been to determine what inhibits transformation, and to then put into effect solutions to alleviate same.

This did not happen.

It is fair to say that the EAAB may have identified some of the challenges (we have no knowledge of this process as we were not made aware of any industry consultation or research done) and subsequently implemented a number of steps, which it clearly assumed would promote transformation.

It appears that everything that seemed easy to do and readily available has been lumped into the “transformation package”. There is no evidence to suggest that the steps announced will in any significant way promote transformation, and it certainly does not address all the relevant issues – that is for another article.

The EAAB announced this initiative at national stakeholder engagement workshops with the primary objective of ensuring the rapid, meaningful and sustainable transformation of the real estate sector to be more representative of South African demographics. (The EAAB presentation for the Transformation PDI resolution workshops 2nd Phase is on the Rebosa website.

Here some confusion starts. From an EAAB presentation to Parliament (click here to view) it is clear that the intention was to announce an amnesty. The “amnesty” was however announced without a start and cut-off period. It also appears that this is not a “blanket amnesty” as the EAAB have stated that special dispensations will be granted on a case by case basis and on the terms and conditions allowed by the Board. If it is an amnesty one would assume that a cut-off date will follow, or that same would run out when the Bill becomes law.

If this announcement is not the intended “amnesty” one can understand some of the comments of unhappy agents, as it would then imply that black agents will be treated differently indefinitely. This hopefully was not the intention and will hopefully be rectified.

Another error was the exclusion of white agents in the process.

The EAAB will apply the last paragraph in Section 27 of the Act to effect this initiative. It reads: ”Provided that if in respect of any person who is subject to any disqualification referred to in this section, the board is satisfied that, with due regard to all the relevant considerations, the issue of a fidelity fund certificate to such person will be in the interest of justice, the board may issue, on such conditions as the board may determine, a fidelity fund certificate to such person when he or she applies therefor.”

By limiting the announcement to previously disadvantaged individuals (“PDI’s”), the EAAB is actually stating that a white person cannot be issued with a FFC “in the interest of justice”, as per Section 27 – whatever the circumstances.

(Incidentally, important to note is that contrary to Rebosa’s proposals, the discretion the EAAB has as per Section 27, has not been carried forward in the Bill. Once the Bill becomes law, the Minister will have the power to exempt, but the “Authority” (body that will replace the EAAB) will no longer have this discretion.)

How can this approach by the EAAB be anything other than wrong, unconstitutional and unnecessary? Had Rebosa, a pro transformation stakeholder, been given an opportunity to contribute, we would have urged that an amnesty, applicable to all and limited by a cut-off date, be announced. That would have gone a long way towards addressing the phenomenon of thousands of agents trading illegally. All agents could have been afforded the opportunity to apply for an FFC in “the interest of justice”. Agents with special circumstances (and the Apartheid legacy is one) could have been accommodated in various ways. Any exceptions in terms of educational qualifications would have been restricted to a “catch up period” as having unqualified agents in the industry is unthinkable.

Also, the current approach may well lead to an impression of black agents being less qualified/professional than white agents – a most ill-fated eventuality. This is exacerbated by the implication of no cut-of date having been mentioned.

Incidentally, is the EAAB limiting this “amnesty” by the use of the term PDI? In the presentation, reference is made to the Broad Based Black Economic Empowerment Act, 53 of 2003. There is no definition of PDI in this Act. All the definitions of “PDI” I could find explains it as follows: “The previously disenfranchised population groups in South Africa, i.e. Blacks, Coloureds, and Indians.” Does this mean that black people born after 1994 and now up to 25 years of age also, unconstitutionally, cannot apply for the issue of an FFC in the interest of justice, regardless of circumstances?

The EAAB erred grotesquely in their approach and announcement.

Now onto the real estate industry – the other wrongs.

Almost all positive responses on this initiative came from black individuals. Most white agents criticised without any positive suggestions/consideration to effect transformation despite the inequalities in the industry – more about that in another article.

Regrettably some don’t even support transformation, and some seem not to have learnt any lessons from the Penny Sparrow/Vicky Momberg disasters. One wonders what the extremely negative individuals expect should happen/be done. Nor do they seem to acknowledge that black people suffered any disadvantage under Apartheid, nor that a National Party Government, simply by law, prevented individuals from entering certain professions.

It would have been way more productive if alternative proposals to achieve transformation were forthcoming from all parties concerned.

I will continue with articles as promised above and do hope that we can start a positive debate that can influence the future of our industry. Rebosa will continue taking all reasonable steps from discussion/interaction to legal, to ensure that the EAAB and its successor in title abide by the law and fulfil its obligation to the industry and the consumers.

End.

About the author: Jan le Roux is chief executive of industry body Real Estate Business Owners of South Africa (Rebosa), an independent, non-profit organisation representing the interest of small, medium and large South African business owners, principals and employers in the real estate sector.

What are your views on the EAAB’s execution of their transformation plan – what positive suggestions would you make to them to help PDI’s gain access to the property industry? Email editor@propertyprofessional.co.za.

Leave a Comment

Start typing and press Enter to search