MAIN IMAGE: Piet le Roux – CEO of Sakeliga, Thato Ramaili – CEO of the PPRA, Jan le Roux – CE of Rebosa
Editor
The Pretoria High Court has declared unconstitutional the requirement that property practitioners hold a B-BBEE certificate to be issued with a Fidelity Fund Certificate (FFC), the licence a business needs to trade lawfully.
The case behind the ruling
The ruling follows a case brought by business organisation Sakeliga in 2024, after the Property Practitioners Regulatory Authority (PPRA) declined to issue FFCs to businesses that did not first provide a B-BBEE certificate. Operating without an FFC is a criminal offence.
The court has now struck down section 50(a)(x) of the Property Practitioners Act 22 of 2019, which the organisation identifies as the statutory foundation of the requirement.
Sakeliga’s case
Sakeliga describes the outcome as a major victory against using B-BBEE as a precondition for trading in the property sector, which it says generates upwards of R60 billion a year. According to the organisation, the ruling frees those defined in the legislation as property practitioners from compulsory participation in B-BBEE and saves resources that would otherwise go towards compliance and certification.
In Sakeliga’s view, the requirement was designed to compel participation rather than collect information. It points to the PPRA’s answering affidavit, which it says stated that the purpose of the limitation was to “ensure that those who pay lip service to transformation are not permitted to practice as property practitioners and earn an income from it”. It also cites the PPRA’s heads of argument, in which counsel reportedly submitted that “a purely voluntary transformation-reporting system would undermine the Act’s statutory design and the Authority’s ability to monitor and implement transformation measures”.
The organisation maintains that a B-BBEE certificate is a political instrument of the state rather than a business requirement, and that using licensing for what it calls race-restrictive purposes is an unacceptable barrier to the freedom to trade. It has repeatedly cautioned that government and regulators are seeking to make participation in B-BBEE and other race-based programmes, including employment equity targets, a precondition for economic activity across sectors.
A narrower definition of “property practitioner”
The court also partly upheld Sakeliga’s challenge to the Act’s definition of “property practitioner”, finding certain elements irrational, overbroad, and unconstitutional. The narrowed definition, the organisation says, means several categories of people engaged in property-related business now fall outside the regulator’s reach. It adds that private owners, certain advertisers, and people dealing with specified property interests outside the ordinary course of business are no longer regarded as property practitioners. However, it did not secure the full narrowing it had sought and says it is assessing further legal options.
When does the ruling take effect?
On the licence itself, Sakeliga states that the PPRA may no longer refuse an FFC because an applicant does not hold a B-BBEE certificate. Whether that applies immediately is disputed.
A declaration that part of an Act is unconstitutional does not become final on its own. Under the Constitution, the Constitutional Court must confirm it, and a court may grant interim relief to govern the position while it awaits confirmation. The PPRA and Rebosa read the order differently.
The PPRA’s position is that nothing changes yet. In response to Property Professional, chief executive Thato Ramaili said: “The orders of the High Court regarding the unconstitutionality of parts of section 1(b) of the definition of property practitioner, and the entirety of section 50(a)(x) of the PPA, are suspended; the unconstitutionality and interim order will take effect from the date on which the Constitutional Court confirms the declaration and effects the ruling.”
Ramaili added that, in practice, the requirement had not been a barrier to licensing. “As the PPRA, we have been issuing FFCs irrespective of the level of compliance. Since 2024 we have never refused to issue any practitioner with an FFC based on the level, and have accepted valid certificates and affidavits,” he said.
Rebosa disagrees, pointing to interim relief in the order. Jan le Roux, chief executive of Rebosa, said: “I disagree with the interpretation of the PPRA since the Judge in Point 8 of the order clearly states that, pending the decision of the Constitutional Court, the PPRA may not refuse to issue a Fidelity Fund Certificate on non-compliance with Section 50(a)(x) of the PP Act. The same applies to the ‘amended’ reading of the definition of Property.”
What it means for property portals
The judgment also addressed a recent question raised online: whether property websites that merely host listings must register as property practitioners. Le Roux said the order settles it. “This order also puts an end to the unnecessary polemic on social media about the so-called necessity of property portals to have to register as property practitioners. The judge said that a person whose involvement goes no further than ‘carrying, hosting, publishing or disseminating advertisements placed by another person and who does not otherwise participate in the sale, marketing, promotion or advertising of the property or property interest concerned’ is excluded from the definition of property practitioner.”
Transformation still expected
Le Roux added that the ruling does not remove the industry’s responsibility to transform. “This order does not negate the necessity to promote transformation in this industry actively, and Rebosa remains committed to playing a positive role in this regard,” he said. He also welcomes the fact that estate agents no longer have to bear the unnecessary expense of having to produce B-BBEE certificates in order to obtain their FFCs.
What happens next
The PPRA was ordered to pay Sakeliga’s costs, including the costs of two counsel.
Because the judgment concerns the constitutionality of an Act of Parliament, the Constitutional Court will refer it for confirmation. Should the declaration be confirmed, Parliament will have 24 months to correct the definition.
Read the full judgment here
