Good News for Property Practitioners As BEE Certificate Rule Is Scrapped by the PPRA

• The Property Practitioners Regulatory Authority confirmed it will no longer require a BEE certificate for Fidelity Fund Certificate applications
• A High Court declared the BEE certificate provision in the Property Practitioners Act unconstitutional, citing legal uncertainty
• The ruling also revised who qualifies as a property practitioner, with several key groups now excluded from the definition

South Africa's Property Practitioners Regulatory Authority (PPRA) has confirmed that estate agents and property practitioners are no longer required to submit a Broad-Based Black Economic Empowerment (BEE) certificate when applying for or renewing a Fidelity Fund Certificate (FFC).

The change follows a High Court ruling that declared the relevant section of the Property Practitioners Act (PPA) unconstitutional. Despite this shift, practitioners must still hold a valid FFC to operate legally. Working without one remains a criminal offence.

The law that was struck down

According to a BusinessTech report, under section 50(a)(x) of the 2022 PPA, practitioners were required to hold a valid BEE certificate as a condition for receiving an FFC. In April 2024, the PPRA went further by setting a minimum compliance threshold of Level 8, which meant 40 points or higher. Businesses that did not meet this score were denied their certificates.

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Business organisation Sakeliga and other property sector stakeholders challenged the policy in court. Their argument was straightforward: the legislation only required practitioners to hold a certificate, not to achieve a specific score. They maintained the PPRA had overstepped its authority by imposing a compliance level the law never mandated.

The High Court agreed. It found the legislation failed to define what a "valid BEE certificate" meant or what standards applied, creating legal uncertainty that violated the rule of law. Section 50(a)(x) was declared unconstitutional and set aside.

What changes and what stays the same

Under the court's interim order, the PPRA has immediately halted all BEE certificate requirements for FFC applications. However, the High Court's declaration of invalidity still needs to be reviewed and confirmed by the Constitutional Court before it becomes permanently settled law.

The ruling also addressed how a "property practitioner" is defined under the PPA. The court declared one part of that definition invalid and suspended the declaration for 24 months, giving Parliament time to amend the legislation.

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During this suspension period, certain groups are explicitly excluded from the definition of a property practitioner. Private individuals selling or marketing their own homes are no longer captured by the definition, nor are property developers selling units within their own developments. Third-party advertising platforms and publishers that display property listings without participating in the actual transaction are also excluded.

For practitioners across the country, the immediate practical effect is clear: BEE compliance is no longer a condition for holding the certificate required to do business legally in the property sector.

More on BEE and SA laws

• Briefly News recently reported on a Cape Town man who confronted spaza shop owners at night over BEE laws and foreign employment, sparking a wave of reactions online.
• SA's ambassador to Washington weighed in after the US announced visa restrictions tied to South Africa's domestic policies, as diplomatic tensions grew.
• A cabinet minister warned citizens to brace for fallout after Washington pressured South Africa to change key policies, including BEE, threatening strained US-SA relations.

Source: Briefly News