PROPERTY: ConCourt rules estate agent inspections without warrants unconstitutional

The Constitutional Court in the recent case of Estate Agency Affairs Board v Auction Alliance (Pty) Ltd and Others CCT 94/13 [2014] ZACC 03, held section 32A of the Estate Agency Affairs Act (EAAA) and section 45B of the Financial Intelligence Centre Act (FICA) to be unconstitutional and invalid. These sections empowered inspectors who are given the authority to investigate whether there has been compliance with the provisions set out in these two Acts, with broad powers of search and seizure by allowing them to search and open any “strongroom, safe or other container” and to seize any documents which “in the opinion of the investigator will constitute evidence of non-compliance”. FICA explicitly states that this inspection can be done without a warrant.

The Court however held, on 27 February 2014, that these sections are unconstitutional on the basis that they infringe the right to privacy. To remedy this situation, the Court has decided to read into each provision a warrant requirement empowering judges and magistrates to issue a warrant on application by an inspector. The declaration of invalidity is not with retrospective effect and has been suspended for a period of 24 months to give the legislature an opportunity to remedy these defects. Until such time, however, the procedure for the application and authorization of a warrant will follow the procedure set out in the Criminal Procedure Act 51 of 1977.

Taking into account the seriousness of non-compliance with the EAAA and FICA, such non-compliance resulting in a criminal offence, the Constitutional Court has not lost sight of the constitutional right to privacy and has taken an equitable approach in finding a balance between these two conflicting concepts. The Constitutional Court was proactive in reading in the provision of the warrant while suspending the invalidity of the sections of both Acts giving the legislature time to correct the position.

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