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Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Codes of Good Practice on Broad-Based Black Economic Empowerment

Property Sector Charter

5. Focus of Application

 

 

(5.1) This sector code applies to the South African property sector, and in particular to all enterprises engaged in property ownership or the provision of property services, and includes without limitation, practitioners and enterprises engaging in property development. It does not include any property enterprise outside the borders of Republic of South Africa.

 

(5.2) The stakeholders all acknowledge that the scope defined in this paragraph (5.1) represents a basis for delineation of the property sector based upon common commercial characteristics.

 

(5.3) Subject to any provisions to the contrary contained in any provision of the Codes of Good Practice issued under the B-BBEE Act:

 

(5.3.1) 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. Notwithstanding the above, where a company or holding company has to comply with the provisions of another charter or code issued in terms of Section 9(1) of the B-BBEE Act and the entity of such company or holding company provides the Services, this charter shall not apply to such entity if the Services provided by such entity:
(5.3.1.1) relate to the internal business requirements of such entity, company or holding company;
(5.3.1.2) relate to an in-house function of such entity, company or holding company; and
(5.3.1.3) do not compete in the open market with services provided by entities to which this charter applies.
(5.3.2) 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.

 

(5.3.3) Exempted Micro Enterprises ("EMEs") will be exempt from obtaining a B-BBEE verification certificate and will automatically be awarded a B-BBEE recognition level of 4. In the event that their black ownership exceeds 50%, they will be awarded a B-BBEE recognition level of 3. 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.

 

(5.4) (CODE 800): Measurement of B-BBEE in Qualifying Enterprises for the below mentioned property segments, will apply as shown in the table below.

 

 

Qualifying

Small Enterprises

ASSET BASED

SERVICE BASED

ESTATE AGENTS BROKERS

Net Assets

R30M – R280M

Turnover

R5M-R35M

R2.5M-R35M

 

(5.5) A QSE must select any four of the eight (8) elements of B-BBEE for the purpose of measurement under the QSE Scorecard contained in this sector code. The threshold of the QSE is as per the table under paragraph (5.4) above.

 

(5.6) The exempted Micro Enterprises that qualify for exemption using the above table under (5.4) above.

 

(5.7) The sector code scorecard element weighting is as follows:

 

ELEMENT

CODE NUMBERS

WEIGHTING

PROPERTY SECTOR CHARTER

Ownership

Code 100

20 points

Management Control

Code 200

10 points

Employment Equity

Code 300

15 points

Skills Development

Code 400

15 points

Preferential Procurement

Code 500

20 points

Enterprise Development

Code 600

10 points

Socio-Economic Development

Code 700

2 points

Economic Development

15 points

TOTAL

107 points

 

(5.8) All bonus points to be must be added in the numerator whilst the denominator remains 107.

 

(5.9) The B-BBEE recognition level of a property sector enterprise will be recognised based on the status as indicated in the DTI Codes, Code 000: BEE Status.