What is land expropriation bill and why is it necessary? Simon Dippenaar & Associates

 

Land expropriation is a controversial topic. Expropriation is the process of
putting privately owned property in the hands of the government for the public
good, in return for “just and equitable” compensation. It has been acknowledged by
the Constitution of South Africa as a means for the State to proceed with land reform,
land redistribution and service delivery.
Every citizen should have access to land on an equitable basis.

Current and Proposed Legislation
The legislation in force is still the Expropriation Act of 1975, which had racist
motivations. This Act allows compensation at market rates, which arguably is in conflict
with the Constitution, which requires just and equitable compensation. New
legislation to correct this imbalance has been in the National Assembly legislative
pipeline for some time and has undergone several revisions.

The current bill was introduced to Parliament in October 2020. It recognises
unregistered rights, a feature not in previous versions.

Although the bill has undergone several revisions, the objective remains: to
provide a uniform and fair procedure or framework for all expropriations, within
the provisions of the Constitution.

Expropriation Without Compensation Section 12(3) of the bill sets out the
circumstances where it “may be just and  equitable for nil compensation to be paid,
including but not limited to:”
• Where the owner does not intend to develop vacant land but to benefit
from an increase in market value
• Where an organ of state holds land that is not being used for its “core function”
• Where the owner has abandoned the land by failing to exercise control over
it
• Where the market value of the land is equal to or less than the amount of
state investment or subsidy in the land
• When the land poses a health, safety, or physical risk

There is widespread legal agreement that this section does not apply to
ordinary private property that is used or being developed, and adequately cared
for. Considerable case law on the meaning of “just and equitable” has developed over
the years, which will be considered in the application of this section. However, there
are several concerns. Firstly, this is not a closed list but a set of non-exhaustive
guidelines that allow for unspecified “relevant circumstances” to be considered
by the expropriating authority.

Secondly, there appears to be an unstated and unsupported presumption
that all privately held land is developed or otherwise capable of development.
Furthermore, it is unclear as to how these guidelines will impact on land set aside for
conservation purposes.

Thirdly, it is unclear whether the usual legal meaning of “abandon” will apply or whether a wider definition will be applied – for example will the owner be considered
to have abandoned the land if they leave out of fear for their safety?

It is likely that the skeletal s12(3) will be fleshed out by regulations,
but if promulgated and applied in its current form, it will almost certainly
lead to extensive legal wrangling in the courts, including several challenges on
constitutional grounds. Furthermore, the uncertainty over how s12(3) will be applied
will cause further negative impacts and, whatever the final form of the Bill, will cast
a shadow over the agricultural sector for several years to come.

Promoting Economic Development or Undermining Investor Confidence?
The ANC has pushed this agenda for some time, arguing that changes are needed to
address racially skewed land ownership patterns dating back to white minority rule.
Speaking on 8 January, President Cyril Ramaphosa said the land reform process
will promote economic development for the benefit of all. Some experts feel the
Constitution will need to be amended to allow this, while others disagree.
Most opposition parties have rallied against the ANC’s proposals, saying they
undermine property rights and investor confidence in South Africa. There are
also concerns about the “capture” of government ministers. Who will monitor
the implementation of the bill when it becomes law?

SOURCES Simon Dippenaar & Associates

Article from: Real Estate Investor February 2022

 

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