MAIN IMAGE: Louis Kruger – MD of Kruger Attorneys and Conveyancers Inc
Legal opinion
Residential Communities Council (NPC) and Another v Minister of Human Settlements and Others (GJ, case no 2024-111832, 20 October 2026, Krüger AJ)
Introduction
On 20 October 2026 the Gauteng Local Division, Johannesburg, dismissed an application by the Residential Communities Council (RCC) for an order declaring that estates which charge property practitioners a fee before allowing them to market or sell inside the estate are not engaged in an undesirable business practice under regulation 35 of the Property Practitioners Regulations, 2022.
The application was dismissed with costs, including the costs of two counsel.
The outcome is narrower than the headlines may suggest. The court did not declare the so-called “accreditation fee” unlawful, and it did not find that homeowners’ associations (HOAs) or body corporates are property practitioners. What it did refuse was blanket immunity for every estate in the country. Along the way it made observations that should concern every PPRA-registered practitioner who has paid, or is being asked to pay, such a fee.
This note sets out what was decided, what was left open, and what practitioners, principals and estate managers should do now.
Background
Many private estates require a property practitioner to register with the HOA, attend an “induction” on the estate rules and pay a fee before being allowed to list, show or sell property in the estate. The RCC, a non-profit company representing some 181 residential estates, described this as a rule common to most estates and justified the fee as payment for training on estate rules, security on show days, website advertising and administration.
The PPRA opposed the application. The Minister and the National Property Practitioners Council both abided. REBOSA, whose members employ about 17 800 registered practitioners, supported the PPRA by affidavit. It argued that practitioners need no estate training to explain conduct rules to buyers, and that compulsory fees shrink the pool of agents a seller may choose from.
The PPRA put up concrete examples, two involving RCC members:
- Copperleaf demanded a R5 000 accreditation fee and, in 2023 and again in 2024, refused to issue levy clearance figures on sales handled by agents who had not paid.
- Woodlands imposed a R10 000 “penalty” on a private seller for not using an accredited agent. The conveyancers paid it under protest because the purchaser needed transfer.
According to the PPRA, annual fees across estates range from about R5 000 to R50 000, on top of PPRA and Fidelity Fund certificate fees.
The legal framework
Section 2 of the Property Practitioners Act 22 of 2019 (PPA) applies the Act to the marketing, promotion, managing, sale, letting, financing and purchase of immovable property. Chapter 9 (sections 60 to 66) governs the conduct of property practitioners and applies to anyone performing a function within the definition of “property practitioner” in section 1, whether registered or not.
That definition is wide. It covers any natural or juristic person who, for gain, directly or indirectly acts for another in selling, purchasing, managing or letting immovable property, as well as anyone who for remuneration manages property on behalf of another.
Section 63 allows the Minister to declare business practices in the property market undesirable. Regulation 35.1.1.2 then identifies, as an actor, any party that directly or indirectly controls or manages a residential property development, “including any body corporate or homeowners’ association” (the managing organisation). The prohibited arrangements are those in which the managing organisation:
| Regulation | Prohibited arrangement |
| 35.1.1.3 | Receives money or another reward in exchange for a benefit, advantage or preferential treatment in marketing properties in the development |
| 35.1.1.4 | Requires that properties be sold only through it or a practitioner it designates, or penalises a failure to do so |
| 35.1.1.5 | Requires that properties be sold only to it or a person it designates |
| 35.1.1.6 | Effectively gives one practitioner or group an advantage over others |
| 35.1.1.7 | Effectively excludes or disadvantages any practitioner or group from providing services in the development |
The court held that the awkward numbering makes no difference: 35.1.1.2 defines the actor, and 35.1.1.3 to 35.1.1.7 define the prohibited conduct. Under section 62(3), a practitioner found to have engaged in a prohibited practice faces withdrawal of the Fidelity Fund certificate, a fine up to the magistrates’ court maximum, or a reprimand.
The arguments
The applicants ran a jurisdictional case. Counsel stressed that the dispute was not about whether practitioners who pay the fee act undesirably, nor about the validity of regulation 35. The only question was whether estates themselves fall within the PPA. Because HOAs and body corporates are not property practitioners, Chapter 9 does not reach them, and the PPRA has no jurisdiction over their conduct.
The PPRA argued for a purposive reading. Regulation 35.1.1.2 expressly names body corporates and HOAs, the Act is framed widely, and estates can fall within the definition of property practitioner. It characterised the fee as a “fig leaf” for a revenue stream that excludes practitioners who cannot pay, particularly previously disadvantaged entrants, contrary to the PPA’s transformation objectives.
The court’s reasoning
Krüger AJ applied the unitary approach in Natal Joint Municipality Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA): text, context and purpose are read together from the outset. Read that way, the PPA’s consumer-protection and transformation objects explain the breadth of the property practitioner definition.
The decisive problem was evidence. Four strands stand out.
- Status is fact-specific. Whether an HOA, body corporate or other governing body is a property practitioner depends on whether it manages for gain or remuneration, which turns on its founding documents and how it operates. A body corporate is unlikely to act for gain, and HOAs typically are non-profit, but the court was not shown that profit-driven management is excluded in every case.
- The conduct varies. The applicants themselves said the fee and what it buys differ from estate to estate. The order sought did not define the fee, its quid pro quo or the circumstances in which it is demanded.
- No supporting evidence. There was a board resolution, but no confirmatory affidavit from any member estate. He who asserts must prove (Pillay v Krishna 1946 AD 946), and blanket relief was “fraught with risk”.
- The order would over-reach. Granted as framed, it would immunise every estate nationwide from Chapter 9, including any that do fall within the definition.
The court also found that the practice, depending on its terms, may well be the mischief the regulation targets. It restricts consumer choice of practitioner, may raise costs to sellers or cut the excluded agent’s commission, and creates another hurdle for emerging practitioners. Late in argument the PPRA invoked the court’s discretion under section 21(1)(c) of the Superior Courts Act 10 of 2013. The court did not fully accept that argument, but held that granting a declarator would in any event be imprudent.
What the court did not decide
The dismissal is a refusal of relief, not a positive declaration in the PPRA’s favour. Several questions remain open:
- Whether estates are property practitioners. The court found only that the applicants had not proved they are not. Its own remarks suggest that most body corporates and non-profit HOAs may well fall outside the “for gain” element.
- Whether the PPRA has jurisdiction over estates. This was the applicants’ core point, and it was not answered. Regulation 35 names HOAs and body corporates as actors, but section 63 and Chapter 9 are framed around the property market and property practitioners. Whether a regulation can bind a non-practitioner directly is still unresolved.
- Whether any particular fee is unlawful. Each estate’s fee must be assessed on its own terms: what it pays for, whether it is compulsory, and what happens if an agent does not pay.
The judgment is also marked not reportable, was given by an acting judge, and may yet go on appeal. It is persuasive rather than binding on other divisions. Practitioners should treat it as a strong signal of judicial attitude rather than a final word.
What it means for PPRA-registered practitioners
The most important passages for practitioners are paras [42] and [46]. The court observed that practitioners who comply with the demand by paying the fee “may well fall foul” of the undesirable practice provisions. If estates sit outside the Act, the estate escapes sanction while the paying practitioner remains exposed. The court described that practitioner as caught between “the devil and the deep blue sea”.
That is the practical risk. Regulation 35 prohibits an arrangement, and a practitioner who pays for preferential access is a party to it. The PPRA regulates practitioners beyond doubt. If it cannot reach the estate, it can still reach the agent, with consequences that include loss of the Fidelity Fund certificate (s 62(3)).
Several consequences follow:
- Paying is not risk-free. An agency that pays an estate’s compulsory accreditation fee to gain or keep access is exposed to a complaint under section 28 and a finding under regulation 35.1.1.3, 35.1.1.6 or 35.1.1.7.
- “Voluntary” fees are not automatically safe. REBOSA indicated it would not object to voluntary fees for marketing opportunities or premium access. But regulation 35.1.1.3 targets money paid for a benefit or preferential treatment in marketing, whether or not the fee is voluntary. A paid premium listing on the estate website may itself be the problem.
- Exclusion is now on record as harmful. The court accepted that the practice can restrict seller and buyer choice, raise transaction costs and bar emerging practitioners. Excluded practitioners and their clients have judicial support for a complaint or a challenge on the facts of a particular estate.
- Principals carry the exposure. Firms should decide policy at principal level rather than leaving individual agents to pay estate fees from their own pockets.
- Watch the transfer. Withholding levy clearance figures or imposing a “penalty” for using an unaccredited agent (the Copperleaf and Woodlands examples) can delay transfer. Agents should alert sellers and conveyancers early, and any payment made to avoid delay should be made expressly under protest and without admission.
What it means for estates, HOAS and body corporates
Estates did not lose the jurisdiction argument, but they did not win it either. An estate that wants comfort will have to show its own position on its own facts, not rely on an industry-wide declarator.
The judgment points to the factors that will matter:
- Founding documents. Whether the MOI or constitution permits the HOA to manage for gain, and whether it in fact earns a surplus from practitioner fees.
- The quid pro quo. A charge that recovers the actual cost of a defined service, such as security for a show day, stands on firmer ground than a flat annual “accreditation” fee.
- Compulsion and consequences. Making payment a condition of access, refusing clearance figures, or penalising sellers who use unaccredited agents looks much like regulation 35.1.1.4 and 35.1.1.7.
Directors and trustees should review their rules now. Legitimate estate interests, such as access control, conduct-rule compliance and visitor registration, can usually be met without charging practitioners for the right to work in the estate.
Practical guidance for practitioners
- List every estate in your area that charges an accreditation, registration or induction fee, and obtain its written terms.
- Ask what the fee buys. Distinguish a genuine cost-recovery service from payment for the right to market or sell.
- Do not pay a compulsory fee to gain preferential or exclusive access without first taking advice on your regulation 35 exposure.
- Treat paid “premium” marketing in an estate with caution: regulation 35.1.1.3 does not depend on compulsion.
- Record any refusal of access, clearance figures or showings, and any penalty imposed on a seller.
- Warn sellers and conveyancers early where an estate’s rules may delay transfer; pay only under protest and in writing.
- Consider a complaint to the PPRA, or approach your industry body, where a client’s choice of practitioner is being restricted.
- Set a firm-wide policy at principal level and keep it under review while any appeal is pending.
Conclusion
RCC v Minister of Human Settlements is a procedural defeat for estates rather than a substantive victory for the PPRA. The court refused to grant a nationwide pass to every estate that charges practitioners, because the facts differ from estate to estate and the applicants did not prove them.
For practitioners, the message is more pointed. The court has signalled that paying to work in an estate may itself be an undesirable business practice, and that it is the practitioner, not the estate, who is plainly within the PPRA’s reach. Until the jurisdiction question is settled, by the Supreme Court of Appeal, the legislature or a fact-specific case, the safest course is not to buy access.
Louis Kruger BA LLB BSW, MPRE CFE is an Attorney, Notary and Conveyancer.
This note is general commentary and not legal advice on any particular matter.
