The new Property Charter Bill, which was finally signed into practice by the Minister of Trade and Industry, will usher in a new era in the property sector - specifically in the residential property industry.
“The Charter is based on the codes of good practice on broad-based black economic empowerment, however it does take into account some of the unique aspects of the residential industry. For example, a significant percentage of the residential industry are owner-operated businesses where the owner sells and manages all aspects of the business and does not have a layered management structure. This is addressed in the Charter by having only one layer of management,” says Herschel Jawitz, CE of Jawitz Properties.
The Charter will provide opportunities and challenges for the industry and while transformation of the industry is critical it must be financially and economically viable if it’s going to be sustainable. The growth of the residential market in the medium term will come from the lower and middle markets and with it will be exciting opportunities from an industry growth point of view. For new black entrants into the industry there will be equally exciting career prospects.
Jawitz says that if transformation is going to succeed and the industry is going to adopt the Charter both in spirit and form, it cannot be left to the estate agencies alone. There are very important stakeholders that must be involved, such as the Services SETA, the Estate Agency Affairs Board, Property Charter Council and the newly formed industry body, the Real Estate Owners of South Africa (REBOSA). “We are already seeing some very positive steps from the Services SETA in terms of learnerships which will support new entrants into the market,” he says.
There are significant challenges to some aspects of the charter. The predominance of the industry, unlike the commercial property sector, is private family-owned businesses. The taking on of shareholders and even board members - should the business turnover be above a certain level - is going to be a challenge. In addition, the market is still soft and as such the industry is not growing. Attracting new entrants in a soft market is difficult but certainly not impossible. There are however other aspects of the Charter such as procurement that can be implemented quickly and easily.
Property ownership is one of the critical aspects of a stable and prosperous society and the residential property industry has an important role to play as service providers in the transfer of ownership from sellers to buyers. Transforming our industry is part of that process.
“While the charter lays out specific targets, the success of its implementation will be based more on the spirit in which it is adopted versus the charter itself,” he says.