The enactment of the Property Practitioners Act on 1^st February 2022 has brought many exciting changes to the property sector including the requirement now for all property practitioners to have valid B-BBEE certificates and be B-BBEE compliant.

BEE was first introduced in the form of legislation in 2003. Government through the Department of Trade and Industry (Dti) introduced the revised Codes of Good Practice in October 2013. The revised Codes aim to enhance the implementation of B-BBEE in a meaningful and sustainable manner and contain principles and guidelines that will facilitate and accelerate the implementation of B-BBEE. The purpose of the Codes is to assist and advise the public and private sectors in the implementation of the B-BBEE Act.

The objectives of the codes of Good Practice are to:

• Increase the proportion of black ownership and control of entities.
• Increase the proportion of black women participation in entities since they have been marginalized for a long time.
• Increase the up skilling of black employees and the unemployed.
• Broaden the pool of economic opportunities and job creation.
• Increase the inclusion of community and broad-based enterprises and co-operatives in economic opportunities.

SALIENT FEATURES

All Property Practitioners fall under the Property Sector Codes which is regulated by Government Gazette no 40910 dated the 9^th of June 2017.

• Exempt Micro Enterprises (EME’s)

EMEs are defined as businesses with an annual turnover below R2, 5million. These businesses are exempt from calculating a full B-BBEE scorecard. They are only required to produce an EME B-BBEE affidavit. 

EME’s are automatically given a level 4, but 100% black owned EMEs are given a level 1, and 51% black owned EME’s are given a level 2.

• Qualifying Small Enterprises (QSE’s)

QSE’s threshold qualification is an annual turnover between R2.5 million and R35 million.  QSE’s that are 100% black owned are given a level 1, and 51% black owned QSE’s are given a level 2 and these QSE’s only require to give an affidavit to their customers.  All other QSE’s require that a BEE verification audit be done by a SANAS accredited agency.

QSE are required to comply with Ownership as a compulsory element and either Skills Development or Enterprise and Supplier Development.

• Generic Entities

These are businesses that have an annual turnover above R35 million. It is a requirement that a BEE verification audit be done by a SANAS accredited agency, they are also required to comply with all the priority elements which are: Ownership, Skills Development and Enterprise Supplier Development.

If a Company does not achieve the minimum score in one of the priority elements, the calculated BEE level will decrease by one level. For example, if your company has no black ownership but reaches level 4, it will be dropped down to level 5.

BEE STATUS LEVELS AND THEIR SIGNIFICANCE