The Amended Property Sector Code which was gazetted for public commentary towards the end of 2015 is now legally binding to entities and oragnisations operating in the property sector. This is according to the Minister of Trade and Industry Dr Rob Davies, who has approved the gazette of the Amended Property Sector Code in terms of Section 9 (1) of the Broad Based Black Economic Empowerment Act 53 of 2003 as amended by Act 46 of 2013.

The Amended Property Sector Code is applicable to commercial activities in the residential and commercial industries of the property sector, as well as the value chain which include property development, property services, property and facility management, broking, valuation, estate agents and other professional services. Recent reviews estimate that the South African property sector market size is about R5.8 Trillion made up of 4 industries namely: Commercial; Residential; Public Sector; and Zoned land. Looking at the estate agency market it is estimated that out of 38 000 Estate Agents only 13% are Black. These are some of the challenges that the Amended Property Sector Code seeks to address.

According to Minister Davies, even though the main focus of the Amended Property Sector Code is not on land reformation in South Africa, it should contribute towards reversing the legacy of the Native Land Act, 27 of 1913, and subsequent discriminatory policy and legislation which denied black people access to productive land and property. Furthermore, it should contribute towards development and investment in the marginalised areas of our country.

The Amended Property Sector Code became effective on 28th June this year

“To achieve this, the Amended Property Sector Code has introduced a measurement indicator called Economic Development which aims to stimulate property development in under-resourced and marginalised areas, while in the process addressing inequalities and creating wealth amongst the previously disadvantaged groups. The set target is 10% of all annual investment for development or redevelopment,” says Davies.

Minister Davies further says that to accelerate an increase in ownership of black people in the sector, the Amended Property Sector Code has set a black ownership target of 27% for property owning companies.

“This is higher than the 25% black ownership target of the Generic Codes. In addition, and in recognition of the fact that there is a need to make capital available in the sector to enable black owned companies to develop and acquire properties, the Amended sector code has set a target for established companies to financially support those that are at least 51% black owned. The value of the finance to be made available is up to 2% of the total development / redevelopment spent,” added Minister Davies.

The Amended Property Sector Code became effective on 28th June this year.