The Property Practitioners Regulatory Authority (PPRA) is under scrutiny for purportedly refusing to issue fidelity fund certificates to property practitioners based on their empowerment status.
Business group Sakeliga has requested that the authority formally commit to withdrawing and reversing its policy after reports of it imposing a “temporary hold” on the BEE policy.
Fidelity fund certificates are issued by the Property Practitioners Fidelity Fund, which was established to ensure that payments held in trust remain safe and that clients can be compensated in case of theft. The certificates are crucial because the state bars estate agents, developers, management agents, auctioneers and eight other categories of property practitioners’ from operating without one, with the risk of facing legal action if they do.
“Despite there being nothing in the constitution, the Broad-Based Economic Empowerment Act, or the Property Practitioners Act to make a minimum level of BEE compulsory for property practitioners, the PPRA has decided that BEE certificates must have at least 40 points to be valid,” Sakeliga CEO Piet le Roux told Business Day.
Le Roux said the PPRA’s announcement meant thousands of property businesses were at risk of being prohibited from operating.
Annually more than 40,000 fidelity fund certificates are issued to estate agents, property developers, property administrators, landlords, direct property sellers, auctioneers, and property advertisers.
PPRA CEO Thato Ramaili said the board had not made a decision to refuse fidelity fund certificates based on BEE status. “The board has obtained [legal] opinion... and is currently applying its mind before making a decision on how it will apply the provision,” she said.
She added that the PPRA had not received legal papers regarding BEE compliance.
According to Sakeliga, the PPRA has not officially changed its position and is ignoring demands to publicly withdraw the policy, reopen denied fidelity fund certificate applications and commit to avoiding similar BEE-based restrictions. It has sent the PPRA a final letter of demand to provide a written undertaking to withdraw and reverse its BEE policy.
“Our letter follows reports in recent days that the PPRA has given assurances of a hold on its unlawful BEE policy, ‘for the time being'. Under the unlawful policy, the PPRA has since at least April this year been refusing to issue property practitioners with fidelity fund certificates based on their BEE status,” it said in a media statement.
Sakeliga maintains that requiring a BEE certificate, regardless of the BEE level is an attempt to normalise “inappropriate political interference” and is irrelevant to a candidate’s qualifications for obtaining a fidelity fund certificate.
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