Proposed introduction of level 8 BBBEE Certificates for Property Practitioners

The Property Practitioners Regulatory Authority (PPRA) has advised that an estate agency (one of the affected parties falling under the definition of a property practitioner) which fails to provide a minimum level 8 Broad-Based Black Economic Empowerment (B-BBEE) certificate will not receive a Fidelity Fund Certificate (FFC) in 2025. 

Section 48 of the Property Practitioners Act provides that no entity may act in the capacity of a property practitioner without a valid FFC, and it further makes it clear that an FFC may not be issued without a BEE certificate.

Crucially, Section 48 only requires the submission of a BBBEE certificate with no prescribed minimum level.  

There are three BBBEE categories for estate agencies:

Exempt Micro Enterprise (EME) – less than R2,5m annual turnover

Qualifying Small Enterprise (QSE) – between R2,5m and less than R 35m annual turnover

Generic – greater than R35m annual turnover.

The latest announcement by the PPRA introduces a minimum scorecard requiring a Level 8 scorecard issued by a proper SANAS registered verification BBBEE rating agency. 

Level 8 entails a QSE attaining a compliance level of 40 points or more across the various scoring criteria as reflected in the Amended Property Sector Code. 

If implemented, which the PPRA has said is ‘non-negotiable’, non- compliance will result in qualified property practitioners being unable to work and thereby excluded from earning a living. This scenario will be a “first” in South Africa potentially impacting on some 28 000 white estate agents out of the total of 40 000 registered estate agents in South Africa.

Jan le Roux of Rebosa has stated the consequences of the newly announced level 8 BBBEE requirement will be catastrophic for estate agencies and agents employed by them as close to 65% of estate agencies in the country are small businesses or sole proprietorships. He reportedly stated further that estate agencies who do not get their fidelity fund certificates by 2025 due to an insufficient BEE score will not stop trading.

Piet le Roux, CEO of Sakeliga, has reportedly announced that Sageliga plan to turn to the Courts to oppose the announcement by the PPRA and invited affected agencies to participate in the legal action envisaged by the organisation.

BLC Attorneys can assist affected estate agencies to clarify the workings of the Amended Property Sector Code scorecard criteria applicable to the QSE and Generic categories. Contact or Guy Dakin on 0826533350.