Charter needs government to take a hand institute
GOVERNMENT involvement in the property charter process is essential for its success, says the South African Institute of Black Property Practitioners.
Institute spokesman Andy Tondi says the charter is similar to the mining charter in that it deals with the "core of our liberation struggle", which if not addressed properly now it will "come back on us in the future".
The institute's first option is for government to drive the process as with the mining charter. "We agree with the government stance of nonparticipation on all other charters, but we believe the property charter needs a political boost," says Tondi.
There is concern that the proposed property charter could duplicate what already exists under the financial services charter. Some say that as banks own listed and unlisted property and have to adhere to the financial services charter, a property charter may mean duplication.
However, the institute says property is the "biggest business" in the world and it will not allow property to be "subservient to a financial services charter".
Most commercial properties are owned by financial institutions and life assurance companies that "belong to the financial services charter. We also know that a company or an organisation cannot belong to more than one charter. This poses a dilemma for these financial institutions and life offices with regards to the support of the property charter," says Tondi.
The institute believes that financial institutions are "not in the property business; they hold and own property by default. We will urge them to empower blacks and women by disposing of their property portfolio to enable them to stick to their banking or life assurance business."
Tondi says most big companies with diversified business interests will be affected by the charters of more than one sector. This challenge will have to be dealt with through Business Unity SA.
He says that another view being touted is that the property charter must concentrate only on property services as opposed to ownership. Tondi says the institute disagrees with this because owners "dictate procurement principles".
The institute subscribes to an all-inclusive property charter that will include both commercial and residential properties, according to Tondi.
Article by: Nick Wilson Business Day 1st Edition - May 12 2004