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Talking property with Minister Lindiwe Sisulu

WORDS: DEBBIE LOOTS :: PHOTOS: SUPPLIED

After having being unable to trade for just over two months during Levels 4 and 5 of the national lockdown, embattled property professionals returned to work on June 1 under strict health and safety protocols. In April, during the first stage of lockdown, a new property body – the National Property Practitioners Council (NPPC) – was formed to support and represent the industry at national and government level, especially given these unprecedented times. Chaired by Vuyiswa Mutshekwane, CEO of the South African Institute of Black Property Practitioners (SAIBPP), the council comprises representatives from leading property groups as well as industry stalwarts such as Jan le Roux, CEO of the Real Estate Business Owners of SA; Neil Gopal, CEO of the South African Property Owners Association; Coenie Groenewald, CEO of the National Association of Managing Agents; and Leo Mlambo, president of the National Property Forum.

“We are in discussions with the Estate Agency Affairs Board [EAAB], the department of human settlements and other industry stakeholders with regard to proposing measures to stimulate the industry going forward,” says Mutshekwane. “A return to work for real estate also means a return to work for many downstream activities and subsectors linked to real estate like removal companies, artisans including electricians and plumbers, and valuers.” With the possibility of Covid-19 restriction levels tightening up again in hotspots, the fight for the property sector’s survival is far from over. Here are the responses from Minister Lindiwe Sisulu on matters that affect the sector on government level. Comments by Mutshekwane are included where relevant.

Q and A

Most of SA’s real estate bodies belong to the NPPC, which seems timeous considering the challenges presented by the lockdown and the lack of transformation in the industry. Do you see this as positive and will your department engage with such a body to address challenges in the industry?

“The property sector requires transformation and the pace to date has been less than satisfactory. The facts, figures and statistics bear testimony to this” Lindiwe Sisulu, minister of human settlements, water and sanitation

Lindiwe Sisulu (LS): The department and the minister are committed to ensuring transformation within the industry. Hence a specific chapter dealing with transformation is included in the Property Pracitioners Act [PPA]. Furthermore, the department and applicable entities have been in regular consultation with all organisations and stakeholders in the drafting of the act. The department will continue to have meaningful and constructive consultations with the sector in general as and when required. The Property Practitioners Regulatory Authority, which will be established as provided for by the PPA, will also have to apply this principle.

The EAAB has been in the news lately for lack of service delivery and serious accusations of breach of compliance. Have these issues been addressed to your satisfaction? You advised that you have been requested to intervene.

LS: The EAAB, as the accounting authority, together with the executive management, has a responsibility to manage the institution. Should there be anything that the minister needs to be made aware of, the board will accordingly inform the minister. In instances where matters are drawn to the attention of the ministry by external parties, such matters are referred to the board for comment, inquiry and response.

The EAAB is required to undertake regularly annual audits, and based on the 2018/2019 audit, it prepared and is implementing an audit action plan. Based on reports provided to the department, the EAAB is attending to the required weaknesses and deficiencies. The 2019/2020 annual audit will determine the efficacy of required controls and compliance within the EAAB.

The PPA has been lauded as the “silver bullet” for transformation in the industry, yet there is criticism in this regard. Will we see effective transformation once the act has been promulgated?

LS: The PPA is one of the few pieces of legislation that has a chapter that deals with transformation. It is trite that the property sector requires transformation and the pace to date has been less than satisfactory. The facts, figures and statistics bear testimony to this. We are, however, confident with the promulgation of the PPA; as a country, we will gain traction and speed in ensuring sustainable transformation in the sector. In this regard, reference is made to the requirement within the PPA to establish a transformation fund.

“We will continue to lobby for the reclassification to Level 4 to ensure that we can continue to operate in the case that the country should return to Level 4” Vuyiswa Mutshekwane, CEO, the South African Institute of Black Property Practitioners

Vuyiswa Mutshekwane (VM): Indeed, there is an urgent need to transform the property sector and the act is very progressive in this regard. However, for the intended outcome to be achieved, there needs to be a strong focus on supporting black business owners in the sector through enterprise development and capacitation. The transformation fund should also focus on increasing large-scale black property ownership by funding black property developers, particularly those operating in the affordable housing space. The NPPC has made a submission to this effect in its inputs to the draft regulation, which is now out for public comment.

How will the transformation fund be funded?

LS: The act makes provision in terms of Sections 21, 38 and 39 on the measures required to provide for the funding of the transformation fund. The draft regulations published will provide in more detail the procedures, processes and regulatory mechanisms that will govern the funding and funds in the transformation fund.

When will the act be promulgated?

LS: The act can only be promulgated once the regulations thereto are published and gazetted into law by the minister. The minister published the draft regulations under the act for public comment on March 6 2020 for a period of 60 days. However, a revised final date for public comments has been published in order to compensate for the negative impact of Covid-19 on the submission of comments.

The department will in due course announce the dates for information sessions on the draft regulations. Once they are approved by the minister, the date of promulgation of the act will thereafter be published in the Government Gazette.

Many government departments and big businesses have announced packages to assist various industries during the national lockdown. The department of human settlements and the EAAB appear to have been quiet or absent in this regard, although the industry suffered as much as or more than any other. Why is that?

LS: The minister and the department, in consultation with the EAAB and other sector players, submitted a recommendation to the National Coronavirus Command Council (NCCC) that real estate services be allowed under Level 4 and/or Level 3 of the national lockdown.

The EAAB is also considering the request for a payment holiday until February 28 2021 for all agents who are in arrears with payments and/or penalties and all exam fees.

The EAAB has advised the department that it is in the process of considering all available measures and solutions to ensure that the sector is able to mitigate the effects of the Covid-19 pandemic.

A submission by the NPPC calling for the real estate sector to be reclassified as a Level 4 industry seemed to have received no response. Can you comment on this?

VM: The NPPC has been in communication with the department of human settlements and the EAAB, which have pledged their support to see the industry resume operations as soon as possible. Through the department, industry’s submission was presented to the NCCC for consideration which, as we can now see, has yielded the desired results as the industry resumed operations as of Level 3.

We will, however, continue to lobby for the reclassification to Level 4 so that we can continue to operate if the country should return to Level 4, which is likely given that we are now entering the peak of winter.

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