PDI exemptions coming soon

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.

Also read: EAAB will assist previously disadvantaged agents with FFCs

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.

Showing 15 comments
  • Careen
    Reply

    I agree with Afriforum!

  • Joan Chesters
    Reply

    Isnt this just what we do not want, inequality? If I was a black estate agent I would be offended. I would want to compete on equal footing in every way. Annual fees of R1200 in order to be a principal agent is achievable for all. No one values or works hard for something for nothing.

  • leon jackson
    Reply

    As an operator in the property sector, i am 100% in favor of the PDI exemption coming into effect, opportunities should be afforded to all our citizens who are willing to work and contribute to the South African Economy. ‘Working together we can grow and prosper’ making our country great in every aspect.

    • Dimona
      Reply

      This means more UNQUALIFIED people will get into the industry which will lead to a fraud and malpractice.
      The “best” exanple of it …ESKOM and SAA … what they achieved?
      Just failure!!!!

  • CJ
    Reply

    That’s interesting. Would a seller trust exempt agents? I’m concerned that you are making it more difficult for exempt agents to convince clients to do business with them. If my doctor was exempt from medical profession requirements, I would have looked for another doctor. If you really want to promote and help someone, the focus should be on increasing the quality of training for that person – not on cutting corners. And when you do increase the quality of training, give bursaries to those who can’t afford this additional training. Lowering standards rarely improves performance.

  • Linda Marais
    Reply

    REALLY!!!!!
    Now you are moving backwards. Why did we all do the training, paid thousands to get qualified and still do training. How will the buyers and sellers trust an agent who is exempt. You are setting double standards and it is not good for our profession!

  • Johan Scott
    Reply

    I have to question the reason for implementing these measures that are based on the premise that “whites” had it easy. When l started back in 1990 we were told at an Institute gathering to take a good look around at the faces there because in twelve months 96% of the 455 people in that room will no longer be estate agents. Twelve months later that was exactly the case.
    It never was and never will be an easy career. It is either sink or swim, no armbands.

  • Cecil Halley
    Reply

    Cecil Halley. l agree with the Minister 100%. I have been pushing for empowerment for PDI individuals to be assisted to be able to allow them to earn an income for their families. They will still have to attend the lectures without worrying about additional out of pocket expenses thus allowing them to grow and become professional agents in their own right. Those objecting to the Minister’s proposal are not concerned about helping others to enter the industry for their own personal reasons.

    • Irma Engel Nitsche/ Olympic Estates
      Reply

      Hi Cecil. I remember all those meetings that we have attended .I am still active since Establishing OLYMPIC ESTATES in 1990! Nothing has changed, besides the market…..

  • JUDY OOSTHUIZEN
    Reply

    Good Luck to them not sure how they going to answer the clients difficult questions..legal question doing a contract right..etc…..and the market is dead due to ANC

  • Justin
    Reply

    Like all misguided bureaucrats the EAAB is doing a great injustice to PDI estate agents and creating a perception that agents of colour are inferior. Message to the market is estate agents of colour are not at the same level as their white colleagues …. and that is unfortunate because now CONSUMERs will keep them out of the market.

    If the bureaucrats at the EAAB knew anything about this industry, they would create an elite training school for PDI agents so that the consumer would actually select PDI agents because they were perceived to be better.

    Finally TRUST is one of the most important factors in selecting an estate agent, and the EAAB is suggesting that a consumer should hand over a deposit to an agent who has not bothered to submit their trust account for audit?

    Misaligned and absurd decision!
    Apologies to my highly competent black agents who will be regarded as second-class because of their skin colour.

  • RALPH PANDOY
    Reply

    We are 26 years into democracy and still one sector of the population is being treated with kids gloves. Give everyone the same opportunity. This opens the door for more unqualified persons to enter the industry. Just a question, who falls under PDI’s and how is this going to be controlled? Submitting bank statements is not sufficient proof because this will be encouraging more and more non-disclosure to fall within the limit. More fraud.

  • Nelson Ackeer
    Reply

    The property industry in South Africa is obviously still racially imbalanced, that goes without saying. I live in the Free State and we have first-hand experience in this regard. Non-white agents welcome any effort from the government to create an level playing field, and we are more than able to match the standard should the opportunity be granted.

  • Johann Cronje
    Reply

    I am the Principal of two real estate agencies. I am of the opinion that the training environment dictated by the EAAB is already a flawed system.
    The Code of Conduct specifically outlines our obligations as real estate professionals yet the inequality created by implementation of the exemptions granted to the so-called PDI’s is a disgrace to the industry.
    What is the criteria for someone to qualify as a PDI? What is the objective hereof, to create opportunity? The real estate industry is a commission based industry – you shall be compensated to the extent that you commit your acquired skills and experience towards a challenging and highly competitive environment and also measured according to the extent that you give proper official account of financial affairs. This applies to all.
    We have seen the impact of double standards in all other industry types – are we now trying to deteriorate the credibility of the Real Estate profession as well? We have been trying to dispose of the stigma that clings to real estate agents and have diverted to reference to Real Estate Professionals to describe ourselves. How is deterioration of the standards of accountability a positive for the industry?
    The things that matter in life is quite simply not free of charge and offering it at no charge to a specific cultural collective will merely have the same outcome – it will not be appreciated and most likely not applied in the industry and the majority that receives this exemption will simply demand more.
    You are opening the door to a sub-standard perception of real estate standards and this will quite simply result in real estate professionals being replaced by property owners, investors and the likes opting to dispose of their assets privately without the use of real estate professionals.

  • Daphne
    Reply

    It may be prudent for applicants also to undergo a lifestyle audit because historially there has been underclared (cash) income through informal work which will obviously not be evident on bank statements.
    Also some of us (currently assumed advantaged) have undergone very trying times financially during this economic downturn without earning commission, sometimes for months on end. Surely this PDI should be changed to also include “currently disadvantaged people”, who are also excluded from the mainstream work opportunities.

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