Pretoria High Court: Sakeliga PPRA BEE Certificate Unconstitutional for FFC Renewal

• The Pretoria High Court declared the requirement for a BEE certificate for Fidelity Fund Certificate renewal unconstitutional.
• The Property Practitioners Regulatory Authority confirmed that BEE certificates are not currently needed for FFC renewals, pending Constitutional Court confirmation.
• The Pretoria High Court also found the Property Practitioners Act's definition of a property practitioner to be unconstitutionally broad.
• A separate Johannesburg High Court ruling requires individual assessment of residential estate access fees, rather than a blanket declaration of their legality.
• Sakeliga has escalated the BEE certificate ruling and the broad definition appeal to the Constitutional Court.

Lawyers advising clients in the property sector should note that the requirement for a BEE certificate for Fidelity Fund Certificate renewal is currently suspended, a direct consequence of the Pretoria High Court BEE ruling.

The Property Practitioners Regulatory Authority (PPRA) recently confirmed that property practitioners are not required to possess a black economic empowerment (BEE) certificate for the renewal of their Fidelity Fund Certificate (FFC) ahead of the October 31 deadline. This directive follows a significant 8 September decision by the Pretoria High Court, which sided with the business organization Sakeliga. The court declared the mandatory BEE certificate as an unconstitutional prerequisite for obtaining an FFC. PPRA CEO Thato Ramaili clarified that while this Pretoria High Court BEE ruling awaits Constitutional Court confirmation, no applicant will face FFC refusal solely due to the absence of this certificate. The regulator maintains that this judgment does not invalidate BEE legislation generally, nor will it impede its broader transformation objectives within the sector.

In the same judgment, the Pretoria High Court also found a portion of the Property Practitioners Act’s definition of a property practitioner to be unconstitutional, citing its excessively broad scope. Sakeliga has since advanced the case to the Constitutional Court confirmation stage, seeking to affirm the BEE certificate ruling and to appeal specific aspects of the high court's decision. The organization aims to narrow the expansive definition of property practitioner within the Act, which, in its current form, could encompass individuals involved in various stages of property transactions, including sales, financing, and advertising.

Separately, the Johannesburg High Court recently addressed the contentious issue of residential estate access fees judgment. These fees, which practitioners are often required to pay to market or sell properties within residential estates, can range significantly from R5,000 to R50,000. The court dismissed an application brought by the Residential Communities Council and the Association of Residential Communities, which sought a general declaration that such fees were not an undesirable business practice. The PPRA had opposed this application, arguing that these charges were unduly burdensome for many practitioners and that compulsory accreditation arrangements could restrict homeowners' choice of estate agents. Estates, conversely, defended these fees as compensation for services like training on estate regulations, security provisions, advertising, and administrative tasks. The court's decision emphasizes that no blanket ruling was made on the legality of these fees; instead, each arrangement must be individually assessed on its own merits.

Despite the recent legal challenges, the Property Practitioners Regulatory Authority asserts that its transformation agenda remains firmly on track. Speaking at a recent media briefing, CEO Thato Ramaili reiterated the PPRA's commitment to its mandate, which includes regulating property practitioners, safeguarding consumers, and fostering transformation across the property sector. The regulator highlighted progress in several key initiatives designed to promote inclusivity and development within the industry.

The PPRA's "One Learner, One Property Practitioner" program has successfully placed 1,656 candidates, moving towards its ambitious target of 2,500 placements by 2029. Additionally, 844 practitioners have enrolled in the 'principalisation' program, which is designed to empower qualified estate agents to establish and manage their own property firms, thereby increasing ownership and leadership diversity. While the authority met two out of its three transformation targets for the 2025/26 period, it noted a 28% decrease in enrollment for its new youth program, with numbers falling from 839 to 607 participants. These efforts underscore the PPRA's ongoing dedication to its transformation goals, irrespective of the Sakeliga PPRA BEE certificate unconstitutional ruling.

The recent judicial pronouncements carry significant implications for property practitioners and consumers alike. Lawyers advising clients in the property sector should note that the requirement for a BEE certificate for Fidelity Fund Certificate renewal is currently suspended, a direct consequence of the Pretoria High Court BEE ruling. This suspension will remain in effect until the Constitutional Court confirmation process is complete. Therefore, practitioners can proceed with FFC renewals without this specific compliance burden for now.

Furthermore, legal professionals must closely monitor the Constitutional Court's decisions regarding Sakeliga's Property Practitioners Act definition appeal. A narrower interpretation of 'property practitioner' could significantly alter the scope of regulation and compliance for various roles within the property value chain. The residential estate access fees judgment also introduces a critical nuance: while such fees are not universally prohibited, their legality hinges on an individual assessment of each arrangement. The court's observation that charging for market access can disadvantage practitioners and limit consumer choice underscores the broader impact on competition and consumer options. The Property Practitioners Regulatory Authority itself achieved 18 of its 22 annual targets in 2025/26, processing 32,170 applications, including 21,682 renewals, with new registrations increasing by 32.4% to 7,757. Despite a qualified audit opinion attributed to accounting for penalties, the regulatory body continues its operational functions amidst these evolving legal frameworks.

Lawyers should advise property practitioner clients that the requirement for a BEE certificate for FFC renewal is currently suspended due to the Pretoria High Court ruling, pending Constitutional Court confirmation. They must also monitor the Constitutional Court's decision on the broad definition of 'property practitioner' and the individual assessment required for residential estate access fees, as these will impact compliance and operational strategies.

Source: Reporting from recent industry news