PDI exemptions coming soon
MAIN IMAGE: Mamodupi Mohlala, CEO of EAAB.
It will be easier for black people to become estate agents from 1 April this year – previously disadvantaged individuals (PDIs) may then apply for exemption for a maximum term of five years in terms of fees for FFC renewals, submission of audit reports and more time to meet educational requirements.
1 April 2020 is the date when the PDI resolution of the Estate Agency Affairs Board (EAAB) will come into effect says their CEO Mamodupi Mohlala. The intention of the resolution is to make it easier for persons from PDI backgrounds with a turnover of less than R5 million per year to become estate agents.
The South African real estate sector is still largely dominated by white estate agents despite attempts over the past years by both government and the private sector to bring more black people into the profession. The EAAB says the implementation of the PDI board resolution will help to remove some of the barriers to entry for persons from PDI backgrounds that qualify for exemptions.
Mohlala says she anticipates that over 900 black estate agents, who are currently blocked, will apply for the exemption.
In terms of the resolution, only principal estate agents, non-principal agents and interns from PDI backgrounds may apply for the following exemptions, partial or in full:
- Submission of audit reports – The estate agent must have submitted 12 months bank statements for his trust and business accounts for the year in question.
- Registration and renewal fees for FFCs – For such period as may be necessary to allow the agent to be issued with an FFC.
- More time to complete the required educational requirements
The Board will apply the following conditions to all applications:
- Economic, social, geographic or financial constraints impacting on the estate agent
- Annual turnover of less than R5 million per year
- Historical educational disadvantages
- Serious health constraints
The EAAB has also made it clear that should an estate agent fail to meet the conditions set for the granting of the exemption, eg doesn’t submit bank statements or doesn’t obtain required qualification in extension period, then their FFC will be cancelled.
No more exemption on CPD?
There has been some dispute over what the EAAB meant by saying that PDI persons could also apply for partial or full exemption from continuous professional development (CPD). Mohlala this week told Property Professional that this is not meant to be an exemption from any educational and training requirements, but relief in terms of fees.
“To preserve the professionalism and credibility of the profession, PDI applicants will have to meet all the applicable training requirements. The only exemption is that they will not pay fees for the training and exams, but they will still be required to meet all educational and training requirements. PDI beneficiaries will also be expected to undertake Continuing Professional Development and acquire the CPD points,” Mohlala explains.
PDI Resolution in conflict with Constitution?
On 2 December the minority lobbying group AfriForum expressed their opposition to the PDI exemptions in a letter to Lindiwe Sisulu, Minister of Human Settlements, and the EAAB – demanding that the board’s resolution be scrapped as they considered it to be unfair racial discrimination in terms of the Constitution. In the letter AfriForum said they are concerned that the implementation of the resolution could set a precedent for other professional bodies. They will consider legal action should the EAAB go ahead with implementing the PDI exemptions.
In reaction Mohlala explained in several media interviews that the implementation of the PDI board resolution will help to remove some of the barriers that hinder transformation in the real estate sector. She told the Sowetan she believes the EAAB is in full compliance with the Constitution ‘which allows for reverse discrimination to address historical imbalances and we believe that is the key rational for this resolution’.
Mohlala says the EAAB has been trying to set up a meeting with AfriForum to discuss their concerns.
How will the PDI exemption work?
The PDI board resolution will be gazetted, published on the EAAB website and in their magazine, The Agent, as well as in a national newspaper. On 1 April 2020 it will come into effect says Mohlala.
There after principal agents, non-principal agents and interns from PDI backgrounds may submit their applications for the exemption. A dedicated panel of executives from various departments will adjudicate the application process in terms of Section 27 of the Estate Agency Affairs Act. The panel will make recommendations to the CEO who will then present it to the EAAB for approval.
PDI exemption valid for max 5 years
For the first time Mohlala has also indicated that an exemption will be valid for a limited time period. Mohlala told Property Professional this week that the period of exemption is five years subject to annual review based on submitted financials and other required documents. Furthermore, each PDI beneficiary will be subject to an annual review. “If their financial status changes during the exemption period, the exemption will then be revoked,” says Mohlala.
In response to the question for how long PDI persons will be able to apply for exemption, Mohlala responds that it is up to the discretion of the board how long the exemption period will be enforced.