High court strikes down PPRA’s BEE certificate rule

A landmark High Court judgment removes the BEE certificate requirement linked to Fidelity Fund Certificates, with major implications for property practitioners.

• The High Court declared section 50(a)(x) of the Property Practitioners Act unconstitutional because its BEE certificate requirement was vague and irrational.
• The ruling affects estate agents, managing agents, property managers, bond originators and others who require Fidelity Fund Certificates to operate.
• Practitioners can, according to Cor van Deventer, apply for Fidelity Fund Certificates without BEE documentation, pending any future legislative changes.

A significant ruling for SA’s property industry

‍A controversial compliance requirement affecting thousands of South African property practitioners has been struck down by the Gauteng High Court.

In Sakeliga NPC v Property Practitioners Regulatory Authority, Judge J van der Schyff declared section 50(a)(x) of the Property Practitioners Act (PPA) unconstitutional, removing the requirement for applicants to produce a “valid BEE certificate” when applying for a Fidelity Fund Certificate (FFC).

The judgment was handed down electronically on 8 September 2026 and could have significant practical consequences for estate agencies and other businesses regulated by the Property Practitioners Regulatory Authority (PPRA).
 
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The central problem was not simply transformation policy. It was whether legislation that determines a person’s ability to practise and earn income was sufficiently clear about what practitioners were actually required to provide. According to Cor van Deventer, Director at Van Deventer Dowlath & Marx Inc, the court concluded it was not.

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“Judge van der Schyff found section 50(a)(x) of the Act to be uncertain, irrational and impossible to comply with.”

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The case behind the ruling

‍The Property Practitioners Act requires regulated practitioners to hold a valid Fidelity Fund Certificate. That certificate is critical: without one, practitioners may not lawfully perform certain regulated activities or receive commission and fees.

Yet section 50(a)(x) required an applicant to submit a “valid BEE certificate” without adequately explaining what that meant. According to Van Deventer, practitioners have faced uncertainty over the requirement for years.

In late 2024, the PPRA moved away from its earlier insistence on a Level 8 BEE-compliant certificate, reverting to the acceptance of exempt micro-enterprise affidavits and CIPC-issued BEE certificates as valid documentation. But the High Court ruling goes substantially further.

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“The regulator may have softened its stance in 2024, but the judgment removes the requirement entirely,” Van Deventer explains.

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The distinction is important: this is not simply a change in PPRA policy. It is a finding against the underlying statutory provision itself.

What did the High Court find?

‍At the heart of the judgment was a basic regulatory question: how can practitioners comply with a legal requirement if the law does not adequately tell them what compliance requires?

According to Van Deventer’s analysis, the court identified several fundamental problems:

• The Act did not define what constitutes a “valid BEE certificate”.
• It did not specify who must issue the certificate.
• It did not prescribe what BEE level, if any, was required.
• It was unclear whether affidavits or CIPC certificates qualified.
• The PPRA itself had not applied the requirement consistently.

That uncertainty became particularly serious because an FFC is a prerequisite for practitioners to operate and earn remuneration. Van Deventer says this meant the provision also interfered with the constitutional protection of occupational freedom under section 22 of the Constitution.

The requirement therefore failed important tests of legal certainty, rationality and the rule of law.

Who does the ruling impact?

‍The judgment extends well beyond traditional residential estate agents. It potentially affects property practitioners regulated under the PPA who rely on Fidelity Fund Certificates, including:

• Estate agencies and agents
• Managing agents
• Property managers
• Bond originators
• Other qualifying property practitioners

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The commercial consequence is significant. “Under the Property Practitioners Act, practitioners may not lawfully receive commission or fees without a valid FFC, which means a compliance gap becomes a financial one,” says Van Deventer.

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For an individual practitioner or property business, therefore, uncertainty surrounding an FFC isn't merely an administrative inconvenience.

It can affect the legal ability to earn an income.‍

Van Deventer says the judgment removes the prospect of practitioners being prevented from obtaining an FFC because of an undefined or inconsistently applied BEE documentation requirement.

What Sakeliga challenged

‍Sakeliga, a non-profit organisation that litigates on behalf of its members and on matters involving constitutional and commercial certainty, challenged more than the BEE certificate provision.

The organisation also contested aspects of the Act’s broad definition of a “property practitioner”. It did not succeed on every argument. According to Van Deventer, the court found that most of the definition was rationally connected to the PPA's regulatory and consumer-protection objectives. 

However, three aspects of paragraph (b) were declared unconstitutional. These concerned:

1. Private natural-person owners being treated as property practitioners merely because of the type of property involved.
2. Natural or juristic persons being treated as property practitioners when selling or marketing property outside their ordinary course of business.
3. Advertising platforms or conduits being classified as property practitioners.

The judgment therefore has implications extending beyond the BEE certificate issue and helps clarify who should fall within the regulatory reach of the Property Practitioners Act.

What happens now?

‍For practitioners, this is the immediate practical question. Van Deventer says that, pending future legislative or regulatory amendments, practitioners applying for Fidelity Fund Certificates can proceed without submitting the BEE documentation previously required under section 50(a)(x).

That does not mean transformation requirements across the wider South African regulatory environment have disappeared. Rather, the court has found that this particular statutory mechanism did not meet the required constitutional standards.

The judgment also does not prevent government from introducing a replacement provision. Any future amendment would, however, need to address the deficiencies identified by the court, particularly certainty and rationality.

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“Although the judgment doesn’t prevent the Minister from making changes, any amendments will have to meet the standards of certainty and rationality set out by the court,” Van Deventer says.

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What property practitioners should take from the ruling

‍The judgment is important because it goes to the heart of regulatory certainty. Transformation remains an important policy objective, but legislation governing whether someone can lawfully practise a profession and earn income from it, must provide a clear, rational and workable compliance framework.

For estate agents, managing agents, property managers, bond originators and other affected practitioners, the immediate consequence is potentially significant: an unclear BEE certificate requirement should no longer stand between an otherwise qualifying practitioner and an FFC. The longer-term question now moves back to policymakers.

If a replacement requirement is introduced, the industry will be watching closely to see whether it provides what the previous provision failed to deliver: certainty over exactly who must comply, what must be submitted and what constitutes compliance.

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