The recent case involving the Property Practitioners Regulatory Authority (“PPRA”) and Sakeliga NPC (“Sakeliga”) addressed the relationship between licensing requirements in South Africa’s property sector and compliance with the requirements of Broad-Based Black Economic Empowerment (“B-BBEE”). The matter, which originated in 2024, arose after Sakeliga, a business organisation, instituted legal proceedings against the PPRA concerning the potential refusal to issue Fidelity Fund Certificates to certain property practitioners that did not meet the applicable B-BBEE requirements. The Gauteng Division of the High Court, Pretoria, was accordingly required to consider the legal implications of linking the issuance of Fidelity Fund Certificates to B-BBEE compliance.
The dispute: FFCs and B-BBEE compliance
The case centred primarily on section 50(a)(x) of the Property Practitioners Act 22 of 2019 (“Act”), which provides that a Fidelity Fund Certificate (“FFC”) may not be issued to a person who is not in possession of a “valid BEE certificate”. An FFC is a key regulatory requirement for property practitioners in South Africa, and the absence of a valid FFC may prevent a property practitioner from lawfully performing activities regulated by the Act, with potentially significant consequences for their businesses.
The constitutional challenge
Sakeliga challenged this regulatory framework, with the central issue being whether possession of a “valid BEE certificate” could lawfully serve as a condition for the issuance of an FFC. Sakeliga contended that an FFC is primarily concerned with the regulation of property practitioners and the protection of consumers within the property industry, whereas B-BBEE certification serves a distinct purpose and bears no rational connection to the regulatory objectives of an FFC. It therefore argued that making the issuance of an FFC conditional upon compliance with B-BBEE requirements constituted an irrational barrier to the lawful practice of the profession and was inconsistent with section 22 of the Constitution of the Republic of South Africa, 1996 (“Constitution”), which affords every citizen the right to choose their trade, occupation or profession freely. Sakeliga further raised concerns regarding the legal certainty of the provision, noting that the Act does not define what constitutes a “valid BEE certificate”.
The Court's judgment is important, however, in distinguishing between the legitimacy of transformation as a regulatory objective and the constitutional validity of the particular mechanism used to achieve that objective. The Court accepted that there is nothing inherently irrational in Parliament using the FFC regime to advance legitimate objectives of the Act, including transformation. The issue was therefore not whether B-BBEE considerations could ever be linked to the licensing of property practitioners, but whether the particular requirement enacted by section 50(a)(x) was sufficiently clear and constitutionally sustainable.
The problem with a “valid BEE certificate”
A central difficulty the Court identified was the meaning of a “valid BEE certificate”. The Act does not define the term, while the applicable B-BBEE framework does not operate on the basis that every person or enterprise must possess one uniform document described as a “BEE certificate”. Depending on the applicable category of enterprise, B-BBEE status may, for example, be established through different forms of documentation, including affidavits or certificates. The Court also noted that the respondents themselves advanced differing interpretations as to what documentation would satisfy section 50(a)(x).
The Court accordingly found that the uncertainty surrounding the requirement was particularly significant because an FFC effectively serves as the statutory gateway to lawful practice. Section 48 of the Act prohibits a person from acting as a property practitioner without an FFC. Consequently, where possession of a particular document is made an absolute condition for obtaining the certificate required to practise lawfully, the legislation must identify that condition with reasonable certainty and in a form capable of coherent application.
The Court’s finding
On 8 September 2026, the Gauteng Division of the High Court, Pretoria, therefore declared section 50(a)(x) of the Act inconsistent with the Constitution and invalid. The Court found that the provision failed to satisfy the rule-of-law requirement of legal certainty, mainly because the Act does not define what constitutes a “valid BEE certificate”, while the broader B-BBEE framework does not provide a single, universally applicable document that fits that description. The Court's reasoning also engaged section 22 of the Constitution, given the direct effect that the FFC requirement has on a person's ability to practise as a property practitioner.
The broader meaning of “property practitioner”
It is important to note that the judgment did not invalidate the broader regulatory framework under the Act, nor did it find that B-BBEE requirements are generally unconstitutional. Sakeliga had also challenged various aspects of the statutory definition of “property practitioner”. The Court largely upheld the breadth of the definition, recognising that the Act was deliberately framed more broadly than the legislation it replaced and that the broader regulatory reach was not irrational. The Court did, however, find a limited constitutional defect in paragraph (b) of the definition, relating to circumstances including certain private property owners and persons whose involvement is limited to disseminating another person's advertisement. The judgement reinforces an important distinction between a person acting professionally or for gain in the property market and a private property owner simply disposing of his or her own property. From a conveyancing perspective, this distinction is practically relevant when determining whether a person involved in a transaction must hold an FFC. It also highlights the importance of considering the nature and substance of a person’s activities, rather than assuming that everyone involved in a property transaction falls within the statutory definition of a property practitioner.
What the judgment means for the property sector
As part of its order, the Court directed that the declarations of invalidity be referred to the Constitutional Court for confirmation in terms of section 172(2)(a) of the Constitution. Pending the Constitutional Court's decision, the PPRA may not refuse to issue an FFC solely by reason of section 50(a)(x). The declaration concerning section 50(a)(x) will operate prospectively from the date of Constitutional Court confirmation and will not affect the validity of FFC’s issued before that date.
The case highlights the importance of ensuring regulatory requirements are consistent with constitutional principles and supported by a clear, ascertainable legal basis. More broadly, the judgment demonstrates that while transformation remains a legitimate and important regulatory objective, the means by which that objective is pursued must themselves comply with the Constitution, including the requirements of legal certainty and the right to choose a trade, occupation or profession freely.
Its broader significance will depend on how the decision is ultimately dealt with by the Constitutional Court and, if the declaration is confirmed, whether and how Parliament elects to address the defect in section 50(a)(x). For property practitioners and businesses operating in the property sector, the judgment nevertheless reminds them that regulatory compliance requirements affecting access to a profession must be sufficiently clear, predictable, and capable of consistent application.
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