Property pie division skewed, say lawyers
Black conveyancers concerned at lack of growth in transactions by their firms
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.