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  09 - 2013 Property sector gets its house in order
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09 - 2013 Property sector gets its house in order
Author : Anna-Marie Smith*| - MONEYWEB 

Property sector gets its house in order
20 September 2013

   Transformation is happening, albeit slowly.

A plague in the property industry for decades, the lack of regulatory control and skills shortages is being addressed, albeit slowly.

Cooperation at government, stakeholder and industry levels is moving toward greater accountability through revised legislation and the newly proposed code of good practice.

However, the process will be hampered should private players refrain from participating. Most pressing are the issues around changing legislation, skills shortages as well as low representation of blacks in the industry.

Higher entry levels and stricter operational criteria for business operators will raise the bar to increase professional conduct and integrity within the industry. An increase in the number of opportunities that are available for participation in training and qualifications by newcomers, in particular for black participants, is crucial.

Legislation

Regulatory functions are improving, following the transfer of the Estate Agency Affairs Board (EAAB) earlier this year from the Department of Trade and Industry to Human Settlements. Among other processes, this has sped up the legislative review on the proposed new Property Transactions Bill intended to replace the current EAA Act of 1976.

EAAB president Bryan Chaplog who promoted Phase Two of the EAAB 2013 Annual Stakeholder Roadshow said: “There can also be no doubt that legislation has impacted significantly on estate agents.”  As a result he said, the EAAB and the Black Conveyancers Association will provide input into the enactments of the National Credit Act, the Consumer Protection Act, the new Companies Act and any other relevant legislation which stakeholders might seek clarity on.    

The process of amending nine pieces of existing legislation is currently underway. The Property Sector Charter (PSCC) forms part of the framework that will establish the principles upon which the Broad Base BEE Act will be implemented. This highlights the vital role played by private industry, as participants in changing legislation. Once finalised, implementation of the revised legislation will be integral to the development of a code of good practice that will apply across different segments of the property sector.  

What also remains of major concern to industry bodies, not all of which currently see eye to eye, is the disproportionate representation of 93% white property professionals. Yet, black middle class home owners represent the fastest growing segment of the market.

“Compared to all other local industry sectors, the property sector stands out like a sore thumb.” says Jeanne van Jaarsveld, President of the Institute of Estate Agents of South Africa (IESA), also General Manager Harcourts Property Group.

Industry players agree that in addition to revised legislation, is the need to address current skills shortages, so that more black property professionals will qualify to enter the industry.

“Although government is in the process of addressing transformation, industry representatives and in particular large companies with access to training and financial resources have a responsibility as well as the capacity to take ownership of this sector,” he says. Greater awareness of professional career opportunities and accredited training available at tertiary as well as in house agency levels is crucial to the process, says van Jaarsveld.

The South African Institute of Black Property Practitioners says it has prioritised transformation targets beyond skills. Its membership now includes organisational leaders, entrepreneurs, and students. In addressing barriers to entry traditionally caused by access to finance and skills to optimise opportunities, the association says investment opportunities are now also undertaken with white individuals.   

The Real Estate Business Organisation of South Africa (Rebosa) CEO Roy Leigh says “Our task is to work with our members, stakeholders and government to find a workable solution with legislative measures that will give effect to meaningful transformation that enables rather than hampers the sustainability and growth of the sector.” 

Various influencing factors will affect the implementation of the ‘code of good practice’ in the industry. This includes the basic condition of employment of the act, such as the size and turnover of agencies which determines the relationship between employees and employers, says van Jaarsveld. He says it is essential to ensure that employers are no longer dealing with employees at arms’ length with no contact, which is stipulated as invalid by SARS. “Agents who are in compliance will act in the best interest of both parties, where solid foundations of trust are evident between business owners and employees."

The integrity of the industry is hugely dependent on self-regulation and internal governing procedures. “Tighter controls such as the Receiver of Revenue’s new taxation rules on agents’ commission, which while not directly affecting buyers and sellers, encourage estate agents and principals to ensure their own houses are in order."

MONEYWEBhttp://www.moneyweb.co.za/moneyweb-property/property-sector-gets-its-house-in-order

 

 

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