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How does the Property Practitioners Act help transformation?

MAIN IMAGE: Robert Krautkramer, director with legal firm Miltons Matsemela.

One way is by making it mandatory for all property practitioners to have a BEE certificate – but what about single proprietors who are white? Robert Krautkramer, director with legal firm Miltons Matsemela, takes a look at what is meant by BEE compliance in the new Act.

The Act is a new piece of legislation which will replace the 42-year old Estate Agency Affairs Act of 1976. The transformation of our country’s real estate industry is one of it’s main aims – in fact, a whole chapter in the Act is devoted to this one topic.

The Act was signed into law in the beginning of October, but it hasn’t commenced yet. There is still a lot of work that has to be done before this can happen. Regulations must still be published, the current Estate Agency Affairs Board needs to gear up; the Minister has to first make rules on what training requirements all the property practitioners who will now be joining the fray, need to undergo and the Minister must also publish a code of conduct. I do not see all this happening any time this year. If we are lucky, the Act may commence towards maybe the middle to end of 2020.


As mentioned, the Act also focusses on transformation. A Transformation Fund is to be created within 6 months of when the new regulating body, the Property Practitioners Regulating Authority (PPRA) is established.

It will be funded by the Fidelity Fund, government grants, fees and fines paid by property practitioners (PPs), investments, and monies donated or bequeathed to the PPRA. The funds are to be used to promote the interests of the historically disadvantaged, including providing for training and development and education of the general public.

How great is the need for transformation?

As at the end of the 2018 financial year, around 12% of all estate agencies; principal estate agents and full status agents, who were issued with FFCs, were people of colour. Around 88%, were white. However, of all the intern estate agents, nearly 30% are people of colour. This indicates that transformation is well underway in the estate agency realm.

The Act also provides that once it commences, the Property Sector Transformation Charter will apply to all PPs. Here is a link to see the actual document.

In order to qualify for a Fidelity Fund Certificate (FFC) – without which a PP may NOT trade – every property practitioner (meaning the firm), must be in possession of a BEE certificate. All this means is that the PP has undergone a verification process with a BEE auditing company, which will then rate you as being a level 1-8 (1 being the highest) contributor – or for that matter, a non-contributor. As long as you are certified, you can get an FFC.

In terms of the Act (as it reads presently – and this may of course change in due course) the only time that a PP will have to have a certain level of BEE certification, is if the PP wishes to do business with an organ of state. The Act only requires that a firm is BEE compliant in such an instance.

As such, business owners which are white-owned, can all relax, unless they wish to tender for state contracts.

To find out more about the legal requirements for BEE compliance in terms of the Amended Property Sector Code – take a look at this series of articles on the  Property Professional website.

This the third article in the series by Robert Krautkramer on the new Property Practitioners Act. In the first article he explained who will qualify as property practitioners under the new Act and showed how the new Act offers more protection to homebuyers. In the second he illustrated the new mandatory requirements upon the regulating body to issue Fidelity Fund Certificates within shorter timeframes. In the last article next week he will look at some most welcome changes in terms of relationships with other service providers – often a source of contention.


About the author: Robert Krautkramer has been a partner at Miltons Matsemela Inc since 2011, a boutique law firm that focusses almost exclusively on property law. He has 23 years’ experience all in all as an admitted attorney and regularly presents seminars to estate agents on contract law; the Estate Agent’s Code of Conduct and new relevant legislation, such as the PPA; the Expropriation Bill; and FICA. In 2019 alone he says he addressed around 2000 estate agents on these three topics.

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