In this article we focus on the basic criteria of the Property Sector Charter within the scope of the B-BBEE Act, Number 53 of 2003.
The original charter was gazetted on 01 June 2012 as Gazette Number 35400 and subsequently amended by Gazette 40910 on 09 June 2017. The amended charter is extensive in detail and contains criteria vastly different to that of other sector charters.
The sector codes
In general, the scope is applicable to commercial activities in the following industries:
Residential property industry including:
• Houses
• Community Schemes
• Land zoned for development
Commercial property industry including:
• Office property
• Industrial property
• Leisure property
• Retail property
• Land zoned for development
Other property services:
• Property Ownership
• Property Letting
• Property Management
• Property Sales
• Property Valuation
From the Gazette:
“This sector code will be applicable to a subsidiary of a holding company or a division or business unit of a company if the primary business of the subsidiary, division or business unit of that company (“the entity”) is dealing in property or providing property services (“the services”), even if the company or holding company has to comply with provisions of another charter or code issued in terms of Section 9(1) of the B-BBEE Act.”
“For the avoidance of doubt this charter shall, among other, not apply to the following activities undertaken by entities such as but not limited to:
mortgage loans, securitisation of mortgage loans, properties in possession of banks, properties owned, leased or otherwise used for the conducting of the business of the company or holding company and in-house property management services.”
Exempted Micro Enterprises (“EMEs”) will be exempt from obtaining a B-BBEE verification certificate and will automatically be awarded a level 4 recognition however, if black ownership exceeds 51%, the enterprise will be awarded a recognition level of 2 and a 100% black-owned EME qualifies for level 1 status.
Exempted Micro Enterprises are allowed to be measured in terms of the Qualifying Small Enterprise (“QSE”) scorecard should they wish to maximize their points and move to the next procurement recognition level.
A QSE must comply with all of the elements of B-BBEE for the purpose of measurement under the QSE Scorecard contained in this sector code. The threshold for QSEs is as per the table above.
This article is provided for information only, and does not constitute the provision of professional advice of any kind.
