B-BBEE ruling welcomed by auctioneers – South African Institute of Auctioneers (SAIA)
SAIA has welcomed a Pretoria High Court ruling declaring the B-BBEE certification requirement for property practitioners seeking Fidelity Fund Certificates unconstitutional, although the judgment still requires Constitutional Court confirmation
The South African Institute of Auctioneers (SAIA) has welcomed the declaration as unconstitutional of The Pretoria High Court that requires property practitioners hold a B-BBEE certificate in order to obtain a Fidelity Fund Certificate (FFC).
The judgment followed a legal challenge by business organisation Sakeliga against the Property Practitioners Regulatory Authority (PPRA) as it is deemed to unnecessarily restrict business operations of property practitioners including those in property auctions.
SAIA chairman Joff van Reenen said the ruling was of concern as it muddied the water of compliance and potentially restricted access for some auctioneers to the market. “The auction industry needs a regulatory framework that promotes self-accountability and ensures that compliance requirements do not unnecessarily prevent businesses from operating.”
The court struck down section 50(a)(x) of the Property Practitioners Act 22 of 2019, which Sakeliga identified as the statutory basis for requiring B-BBEE certification as a condition of issuing an FFC. It argued that the requirement effectively compelled participation in B-BBEE programmes and imposed additional costs on businesses operating in the property sector.
However, the judgment is not yet final and because it concerns the constitutionality of provisions in an Act of Parliament will need to be confirmed by the Constitutional Court before it can take effect.
“This kind of regulatory uncertainty creates additional administrative and financial pressures on all our auctioneers and this is particularly troubling for smaller businesses,” said Van Reenen.
He added that SAIA believes in the great power and strength of diversity and is fully committed to transformation that is done in a fair and equitable manner. SAIA now has legacy auction projects in townships and is pushing hard for further auction education as they recently had their SAQA accreditation confirmed again for another 5 years. The institute will therefore continue to monitor developments that may affect auctioneers and the regulatory framework governing the industry as property auctioneers in order to provide clarity on their obligations. Should the Constitutional Court confirm the declaration of unconstitutionality Parliament will have 24 months to address the affected provisions.
