Prop­erty pie division skewed, say lawyers

Black con­veyancers con­cerned at lack of growth in transactions by their firms

Business Day - Business Law and Tax Review - - FRONT PAGE - EVAN PICK­WORTH

THE Black Con­veyancers As­so­ci­a­tion ( BCA) is con­cerned about the lack of progress in get­ting more prop­erty transactions done by black law firms. In 2005 the deeds of­fice reg­istry sta­tis­tics showed that less than 2% of prop­erty transactions were be­ing done by black firms, ac­cord­ing to the BCA, and while no new sta­tis­tics are avail­able, mem­bers at­tend­ing the or­gan­i­sa­tion’s re­cent an­nual meet­ing said they had not seen much growth since then.

The BCA is an as­so­ci­a­tion of 100% black-owned law firms and boasts a na­tional mem­ber­ship of 214 firms. It has been putting the struc­tures, foot­print and part­ners in place to drive the prop­erty trans­for­ma­tion agenda for eight years, and while there has been growth in the num­ber of black law firms, their pres­i­dent, Kevin Kiewitz, says these firms also need a “fair chance”. One of the burn­ing is­sues for the BCA is im­ple­ment­ing poli­cies to help cre­ate more busi­ness for smaller firms in the prop­erty game. But land re­form and the cre­ation of a small busi­ness min­istry are other big ticket items where the BCA is get­ting heavy­weight air­time with the gov­ern­ment.

Bangiso Mh­labeni, port­fo­lio chair­per­son for the na­tional ex­ec­u­tive com­mit­tee for Gaut­eng and ex­ec­u­tive mem­ber of the BCA, says too many black law firms end up be­ing gen­eral play­ers, with many left out of gov­ern­ment busi­ness as they lack scale.

He says a vi­sion of the BCA is to form a united front and then ap­proach the gov­ern­ment in or­der to get more busi­ness. “We have al­ready started,” he told Busi­ness Day in an in­ter­view on the side­lines of the AGM.

In a no­table de­vel­op­ment

last month, the for­ma­tion of a Min­istry for Small, Medium and Mi­cro En­ter­prises moved a step closer when Pres­i­dent Ja­cob Zuma said he would meet the Black Busi­ness Coun­cil and BCA this month to thrash out the de­tails.

Mr Kiewitz, who is also a coun­cil mem­ber of the Black Busi­ness Coun­cil, says while Zuma had al­ready been ad­vised on the need for such a min­istry, the or­gan­i­sa­tions ap­proached him again last month and the pres­i­dent said “he sees the merit in it and we must come and dis­cuss it with him”.

The Black Busi­ness Coun­cil and BCA have al­ready lob­bied Min­is­ter of Trade and In­dus­try Rob Davies about the need to broaden the scope of black eco­nomic em­pow­er­ment to small busi­ness. The new code for broad-based em­pow­er­ment at­tempts to im­prove the sta­tus of small firms by re­duc­ing some of the more oner­ous con­di­tions by quickly bring­ing them up to level one em­pow­er­ment sta­tus — plac­ing them on an equal foot­ing with big­ger firms — if they are ma­jor­ity black owned.

“The Pres­i­dent said he can fore­see this min­istry [small busi­ness] tak­ing shape like the cre­ation of the Min­istry for Women, Chil­dren and Peo­ple with Dis­abil­i­ties [es­tab­lished in 2009], where he was also ap­proached about a need,” said Mr Kiewitz.

“We need real so­lu­tions for SA — this min­istry will cut out the red tape and en­sure there are en­abling pro­cesses, like ac­cess to fi­nance and set­ting up busi­nesses more quickly.”

Mr Mh­labeni said a small busi­ness min­istry would en­sure these busi­nesses were not “left in the cold” and “some­one other than Julius Malema or the Congress of SA Trade Unions” could speak for them.

But the meet­ing is also likely to touch on the con­tro­ver­sial topic of land re­form — both the Black Busi­ness Coun­cil and BCA are en­gag­ing with the Depart­ment of Ru­ral De­vel­op­ment and Land Re­form, as well as other key stake­hold­ers like com­mer­cial farm­ers, on the cur­rent green pa­per. Con­tro­ver­sial top­ics re­main the for­ma­tion of a Val­u­a­tor-Gen­eral to set prices and se­cu­rity of ten­ure for ru­ral farm­ers.

“If we can trans­form the ru­ral com­mu­ni­ties into sus­tain­able food pro­duc­tion nodes, then you would not have an in­flux of ru­ral peo­ple to ur­ban ar­eas, which cre­ates prob­lems, as in­fra­struc­ture can’t ac­com­mo­date the in­flux,” said Mr Kiewitz.

“We are now at a stage where there is a joint pro­posal,” he said. But

ac­cord­ing to Mr Mh­labeni, se­cu­rity of ten­ure is still a prob­lem out­side of ur­ban ar­eas.

The BCA has been closely in­volved in the process of de­vel­op­ing a green pa­per on ru­ral de­vel­op­ment and Mr Kiewitz says while there is light at the end of tun­nel, a land au­dit is an im­per­a­tive. It has been re­ported that SA’s tar­get to give 40% of com­mer­cial farm­land to black peo­ple by 2014 may have been put back a decade due to in­ef­fi­ciency and cor­rup­tion.

“How can you have a real dis­cus­sion about land re­form with­out an au­dit? We have no facts, yet we need to know how much is owned by, for ex­am­ple, cor­po­rates, paras­tatals, com­mu­ni­ties, trust lands, com­mer­cial farm­ers, and sub­sis­tence farm­ers. Then we can look at how to trans­form this in­dus­try. Then we must re­alise we have to build re­la­tion­ships, in­crease skill ca­pac­i­ties and en­sure we are ready and avail­able to do the work at the best pos­si­ble level,” he said.

“You don’t want to trans­form for the sake of trans­form­ing.”

The land bill cur­rently be­ing com­mented on could “take a long time”, says Mr Kiewitz.

A good start would be more en­gage­ment with in­dus­try play­ers like paras­tatals, banks, agri­cul­ture bod­ies, home builders as­so­ci­a­tions, ru­ral de­vel­op­ment and hu­man set­tle­ments.

The BCA be­lieves it is well placed to bring all the par­ties to­gether as there are too many “si­los”, yet ev­ery­one needs to be “on the same page”.

The BCA feels state-owned en­ter­prises are also not bring­ing them enough work at the mo­ment and so pref­er­en­tial pro­cure­ment poli­cies may be nec­es­sary. “We don’t be­lieve poli­cies at mo­ment are ad­dress­ing trans­for­ma­tion,” said Mr Kiewitz.

“Maybe we should con­sider se­ta­sides, like 30% of pro­cure­ments on deals be­ing set aside to help emerg­ing firms. Spe­cial dis­pen­sa­tions to get more prop­erty busi­ness have been ne­go­ti­ated with the big banks,” he said.

Mr Mh­labeni says it will be im­por­tant to en­gage the hu­man set­tle­ments min­istry and all prop­erty role­play­ers, such as paras­tatals like Transnet, to un­lock op­por­tu­ni­ties for mem­bers.

Pic­ture: THINKSTOCK

PROP­ERTY TRANSACTIONS

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