Here’s hoping the president will cut red tape

AS SOUTH Africa’s economy lurches from one depressing headline to the next, it is so easy to feel powerless and overwhelmed.

But while recently attending a portfolio committee meeting on human settlements in Parliament, I noticed the public gallery was made up mostly of empty seats.

This space, freely open to the public, is where important discussions take place. It’s also where each of us has the opportunity to raise our concerns should we see a possible disjuncture between promises made by our country’s leaders and the laws being made in our Parliament.

One of those areas of disjuncture relates to the current deliberations over the Property Practitioners’ Bill, which offers a unique opportunity to progress and open an industry that holds significant potential for economic empowerment and create jobs.

With South Africa’s unemployment levels witnessing year-on-year increases, serious job creation is undoubtedly one of the firecrackers our economy needs to get it going again.

The property industry finds itself in a place where delivery on immediate transformative action is a clear challenge given its historical dominance by mostly large white-owned businesses.

Yet right now, there is an opportunity to ensure we set our industry on the right course for the future and provide the legislative framework to open the industry to black property entrepreneurs.

To that end, the Real Estate Business Owners of South Africa (Rebosa) has drawn the attention of the human settlements portfolio committee to a raft of amendments.

With the right focus the current version of the Property Practitioners Bill can be improved to enable the transfer of skills, opportunities and prosperity to the next generation of real estate agents.

One of the risks included in the proposed amendments to the bill relates to the Board of Authority.

Continuity and maintenance of an intact institutional memory is essential. However, the draft bill as it exists states that the entire board will be replaced at a single point in time, whereas it is more productive to replace one-third while retaining the continuity and experience of the remaining two-thirds.

While an ombudsman can provide support and relief for those who have been wronged within the industry, there exists a potential conflict with the existing jurisdiction of other agencies. Careful consideration should be given to this issue and the potential risk of dual jurisdiction (and potentially conflicting decisions) by multiple different authorities.

There has been lots of talk this year about the important role of small businesses and the cutting of red tape. Promises were made in the President’s State of the Nation address and on other platforms about helping small businesses. Less red tape has the potential to open the industry and enable ease of access to the market.

However, these assurances have not filtered down to our lawmakers.

The draft bill provides an exemption to micro-enterprises (those with an annual turnover of R2.5m or less in terms of the Property Sector Code) from requiring a BEE certificate. It, however, remains problematic as the vast majority of agencies are very small with few, if any, employees.

While transformation is key for this industry, there is the risk that stringent BEE requirements will actually hamper transformation and growth.

Instead of every individual property practitioner being required to be in possession of a BEE certificate, this must be rectified to require only “business property practitioners” to be in possession of a BEE certificate.

In addition, the prohibition on rendering services without being in possession of a fidelity fund certificate, irrespective of fault, unfairly prevents a property practitioner from receiving payment. This can effectively be remedied by requiring the practitioner to have been issued once with a certificate. The annual renewal application causes bottlenecks, errors occur and income is lost.

The prerequisite of a tax clearance certificate for the issuing of a fidelity fund certificate is another unnecessary, costly and time-consuming burden on a practitioner’s ability to earn a living, and may be hamstrung due to processing and other delays beyond a practitioner’s control.

The provisions relating to the lapsing of a certificate can have dire consequences and should be remedied.

In its current form, the bill requires every practitioner to open and operate a trust account. This blanket requirement will have an unintended cost (time and administrative impacts) on those very practitioners the bill is seeking to open the property sector to – new entrepreneurial entrants. This aim can be achieved, indeed enhanced, if this requirement is removed.

Rebosa’s estimates show that more than 70 percent of existing property practitioners do not use trust accounts.

While many of these amendments might have been well intentioned, one can see how cumulatively they will make the property industry drown in red tape, not only hampering the intentioned growth, but very likely preventing it altogether.

Efforts to improve and transform our industry must always be welcomed and it is my hope that the amendments mentioned here will be re-looked at so that we can give meaning to President Cyril Ramaphosa’s commitments to open the economy to small business and to cutting red tape, and not simply paying more lip service.