A TWO-YEAR legal fight over BEE just reached its conclusion

The North Gauteng High Court has struck down strict Black Economic Empowerment compliance rules in South Africa’s property sector.

It declared them unconstitutional and invalid.

Property practitioners can no longer be denied their operating licence, known as a Fidelity Fund Certificate.

This applies simply for not holding a BEE certificate.

how this rule came about, and why it was challenged

The requirement traces back to the Property Practitioners Act of 2022.

This included a provision requiring a valid BEE certificate for practitioners to operate.

In April 2024, the Property Practitioners Regulatory Authority operationalised this further.

It warned that certificates would be denied unless applicants met a specific “accepted level of compliance”, 40 points or more, described at the time as “non-negotiable.”

Lobby group Sakeliga challenged the rule in 2024. It argued that requiring a “valid” BEE certificate couldn’t reasonably be interpreted as requiring compliance at a specific level.

The PPRA initially reversed course in August 2024, agreeing it would not withhold certificates on this basis.

Sakeliga, however, pushed ahead with a broader legal challenge, also targeting what it called an overly broad legal definition of a “property practitioner.”

What the ruling actually changes

In its judgment issued on 8 September, the court agreed with Sakeliga on both fronts.

First, the court found that the rules requiring BEE compliance for a Fidelity Fund Certificate were invalid.

Second, it narrowed the legal definition of a “property practitioner.” As a result, private property owners, certain advertisers, and people dealing with specified property interests outside the ordinary course of business are no longer captured by the Act at all.

The ruling includes findings of unconstitutionality. It will now be referred to the Constitutional Court for confirmation before it becomes fully final.

Until that confirmation comes through, the rules remain in a legal grey zone.

It’s a genuinely significant shift for anyone working in or around South African property, and a reminder of just how much legal weight a single certificate requirement can carry.