On Friday, the Property Sector Charter was published as a final sector code in terms of the Broad-Based Black Economic Empowerment Act, 2003, giving it the same status as the generic Codes of Good Practice.
The businesses which are included in the Property Sector are property-owning entities, estate agencies, rental agencies, property management entities and all other property-services enterprises (including valuers and conveyancers) but excluding entities involved in providing mortgage loans or security for such loans.
Unfortunately, the Property Sector Code is based on the old Codes of Good Practice and not those which came into effect earlier this year. All businesses falling within this sector must apply this Sector Code for all BEE verification purposes. Many of the concepts contained in this Sector Code are therefore different from those in the generic Codes. For example, while an exempted micro entity in the generic Codes is any entity with an annual turnover below R 10 million, in the Property Sector Code, this is dependent on the nature of the enterprise and, for asset-based entities, it refers to entities with assets below R 80 million, for estate agents, it refers to entities with annual turnovers below R 2,5 million and for other service industries, it refers to entities with annual turnovers below R 10 million.
Despite these difference, for industries which fall within the scope of this Sector Code, they must apply this Sector Code and not the generic BEE Codes for their BEE verification.