Court Scraps the BEE Certificate Rule for Estate Agents: What It Actually Means

If you have ever bought, sold, or rented a home, you have dealt with the property industry. Behind the scenes, estate agents and property managers have to follow strict government regulations to stay in business.

On 8 September 2026, the High Court of South Africa, Gauteng Division, Pretoria, delivered a landmark judgment in a legal challenge brought by the business organisation Sakeliga against the Property Practitioners Regulatory Authority (PPRA) (case no. 2024-148142). 

The court struck down a controversial provision that forced property businesses to produce a Broad-Based Black Economic Empowerment (B-BBEE) certificate just to obtain their trading licence.

Here is an everyday breakdown of what happened, why the judge made this decision, and what it means for property professionals, buyers, and sellers.

The Big Deal About the Fidelity Fund Certificate (FFC)

To understand this case, you first need to understand the Fidelity Fund Certificate (FFC).

An FFC is the official licence every estate agent and property practitioner must hold. It protects the public against fraud or theft of trust money (like rental deposits or purchase deposits).

Under South Africa's Property Practitioners Act 22 of 2019:

No licence, no work: Section 48(1) prohibits anyone from acting as a property practitioner without an FFC, and section 48(3) makes a contravention a criminal offence.

No commission: Section 56(1) provides that a practitioner is not entitled to remuneration for any act performed without a valid FFC at the time, and section 56(5) bars a conveyancer from paying out to a practitioner who cannot produce a certified copy of a valid certificate.

Section 50(a)(x) of the Act barred the PPRA from issuing an FFC to an applicant who "is not in possession of a valid BEE certificate". In short: no B-BBEE certificate meant no licence, which meant you could not legally earn a living selling property.

Why Did the Court Strike the Rule Down?

It is common to hear claims that "the court declared BEE unconstitutional." That is not what happened.

Van der Schyff J made it clear that transformation remains a lawful, valid goal in South Africa. The problem was not the concept of transformation; the problem was that the provision was written so poorly that nobody could work out what it actually required.

In South Africa, the rule of law requires legislation to be clear and predictable. Citizens must be able to understand the rules, and officials cannot simply invent standards as they go.

The court found that section 50(a)(x) left three basic questions unanswered:

Which document counts? The Act demanded a "valid BEE certificate" but never said what document qualified as one. Under national B-BBEE law there is no single "certificate": Exempted Micro Enterprises can rely on a sworn affidavit or a CIPC certificate, while larger businesses are rated by accredited verification agencies. The property legislation never said which of these was required.

Who must hold it? The Act did not say whether the certificate had to be held by the individual practitioner, the agency, or both.

What is the standard? The Act did not say whether "valid" meant achieving a particular empowerment score, or simply holding an authentic, unexpired document.

The judge held that the courts cannot rewrite legislation from the bench, and expressly declined to read a workable meaning into the provision , doing so would have required legislative choices about compliance standards that are Parliament's to make. Because the provision failed the requirement of legal certainty inherent in the rule of law, section 50(a)(x) was struck down in full.

Exhibit A: The Regulator's 2024 About-Face

The clearest evidence of how confusing the provision was came from the regulator itself.

April 2024: The PPRA announced that obtaining an FFC was "non-negotiable" and required applicants to prove compliance at B-BBEE Level 8 (a score of at least 40 points). Applicants who scored below 40 or were non-compliant would be denied their licence to trade.

August 2024: Faced with pushback and legal warnings from Sakeliga, the PPRA took external legal advice and quietly reversed its stance. The regulator conceded that a "valid" certificate simply meant an authentic document, not that a practitioner had to hit a particular compliance score.

The court noted that if the statutory body in charge of the rules could not settle on what the law demanded, ordinary citizens could not be expected to know either.

Private Homeowners and Websites: The "Overbroad" Trap

The case tackled a second major issue: who exactly is a "property practitioner"?

Paragraph (b) of the definition in the Act captures "any person who sells, by auction or otherwise, or markets, promotes or advertises any part, unit or section of, or rights or shares ... in a property or property development". As drafted, that wording reached well beyond the property industry. It technically included:

A private owner selling or advertising their own sectional-title unit, in their personal capacity and outside any business.

Anyone selling such an interest otherwise than in the ordinary course of business.

Websites and advertising platforms that do nothing more than carry, host, publish or distribute someone else's listing.

The court ruled that pulling those people into a licensing regime , forcing them to register, keep audited trust accounts and hold FFCs , was irrational and had no rational connection to the purpose of the Act.

Importantly, the ruling does not release property developers or anyone genuinely in the business of marketing property. The court found the definition remained rational as applied to them, and the order preserves it.

The Interim Fix

The court declared paragraph (b) invalid to the extent described above, and suspended that declaration for 24 months from the date on which the Constitutional Court confirms the order, to give Parliament time to fix the wording.

The judge did not leave ordinary people trapped under the bad definition during that window. The order "reads in" three exclusions, so that for the suspension period the definition operates as if Parliament had already carved out private owners selling their own units, occasional sellers outside the ordinary course of business, and pure advertising conduits. If Parliament misses the deadline, the reading-in simply continues until compliant legislation is passed.

Summary: What This Means in Practice

Topic : Practical reality on the ground

Licence (FFC) applications Immediate. The court ordered that, pending confirmation, the PPRA may not refuse to issue an FFC solely by reason of section 50(a)(x). A missing or low-scoring B-BBEE certificate is no longer a basis to block a licence.

Existing certificates Unaffected. The declaration of invalidity operates prospectively from the date of Constitutional Court confirmation and does not touch FFCs issued before then.

Compliance costs Agencies no longer have to buy a B-BBEE document purely to satisfy the PPRA portal. Most small agencies qualified as Exempted Micro Enterprises and could use a sworn affidavit (a commissioner of oaths fee of a few hundred rand) or a free CIPC certificate, so the saving is largest for bigger firms that paid accredited verification agencies for a rated certificate.

Private sellers and websites Owners selling their own sectional-title units, occasional sellers outside the ordinary course of business, and passive listing platforms fall outside the definition once the reading-in takes effect. Developers and anyone marketing property as a business stay fully regulated.

Is the ruling final? Not yet. Under section 172(2)(a) of the Constitution, a High Court order declaring an Act of Parliament invalid must be confirmed by the Constitutional Court. In the meantime the interim order stands, so the PPRA cannot resume blocking licences under the struck-down provision.

The wider B-BBEE Act Untouched. National B-BBEE law, the property sector code, and scorecard requirements for government tenders, bank panels and corporate supply chains all remain in force. Many agencies will still choose to keep a certificate for commercial reasons.

The Bottom Line

This court victory does not abolish transformation in South Africa. What it establishes is that government cannot use vague, contradictory statutory language to stop people from earning an honest living. For estate agents, brokers and ordinary homeowners, the ruling removes an expensive, confusing administrative hurdle and restores clarity to the property market.