Strict BEE rules in South Africa heading to the highest court
Business group Sakeliga is escalating its fight against the black economic empowerment (BEE) requirements in the Property Practitioners Act to the Constitutional Court.
This follows the group’s recent victory against the BEE provisions in the Act that resulted in the highly contested Fidelity Fund Certificates (FFCs) being scrapped.
Sakeliga said it is now approaching the Constitutional Court to confirm the ruling, and to appeal what it sees as shortcomings in the High Court’s judgment relating to the definition of ‘Property Practitioner’.
In early September 2026, the High Court ruled that requiring property practitioners to comply with BEE to obtain an FFC was unconstitutional and set aside the specific provisions of the Act.
FFCs must be issued for property practitioners to operate in the country, and operating without an FFC is a criminal offence.
The Property Practitioners Regulatory Authority (PPRA) operationalised a policy in April 2024 where FFCs would be denied if applicants did not meet specific BEE requirements, setting a specific level of BEE compliance.
However, the Act itself refers only to a valid BEE certificate.
The court found that while the objective of the rules was clear, the wording, definitions, and requirements were not, creating too much uncertainty.
It set the rules aside, leaving it up to Parliament to decide whether, and on what terms, transformation-related conditions should attach to the certificates.
As part of the case, Sakeliga also challenged the “overbroad” definition of a property practitioner.
It argued that this resulted in a whole slew of people and businesses getting caught in the PPA’s BEE rules, including those who have little to do with the actual businesses of practising in the property sector.
The High Court ultimately agreed with this argument and removed a range of persons and businesses that previously fell under the definition.
This includes those involved in marketing or promoting a property, or in a business that involves the sale and marketing of properties.
However, Sakeliga said this did not go far enough.
It is now asking the Constitutional Court to correct this and also exclude property developers, bond brokers, property administrators, and others “unjustifiably brought within the Act’s reach”.
Unjustified
Sakeliga said the PPA expanded a regulatory framework for estate agents to encompass a wide range of fundamentally different activities.
“Merely selling, financing, advertising or administering property can now bring people and businesses within the definition of ‘property practitioner’ and subject them to the PPRA’s licensing and enforcement powers,” it said.
The group said this is an unjustified application of the laws, extending it to people and businesses whose activities do not involve holding clients’ money in trust.
“Safeguards for estate agents who hold such funds do not justify imposing the same regulatory framework on other property-related activities,” it said.
Keeping these entities under the definition of practitioner means they will have to comply with any future FFC and trust account requirements and be subject to the PPRA’s inspection powers.
“The issue is therefore not merely how the Act classifies a business. It is whether people may carry on ordinary, productive activities without first obtaining a regulator’s permission,” it said.
Sakeliga said it is seeking leave to appeal the High Court’s refusal to invalidate paragraphs (a)(iv) and (c) of the definition, and its refusal to invalidate paragraph (b) in full.
The appeal seeks comprehensive relief for, among others:
- Bond brokers and bridging-finance providers whose work concerns financing property transactions rather than estate agency.
- Property developers who merely sell or rent out units in their own development.
- People paid to administer or manage property for others, under wording broad enough to encompass caretakers, farm managers, residence matrons and similar roles.
“Bringing these fundamentally different activities under the same regulatory regime is irrational and unjustifiably infringes the freedom to trade,” it said.
“It imposes costs and restrictions without a corresponding legitimate purpose, to the detriment of businesses, their clients and the communities they serve.”
Loading ...