LAND EXPROPRIATION - A CLEARER VIEW
Category Residential Property News
The draft Land Expropriation bill released in December by Thulas Nxesi, Minister for Public Works, provides some policy clarity around land expropriation, with and without compensation.
Policy clarity is vital for so many reasons. Vague statements and grandstanding about land expropriation without compensation, have left South Africans - and international investors - uneasy. This, at a time, too, when pulling together is the only way forward. We're on the cusp of an election, and - no different from any other country - the electioneering lead-up is always a fantastical time of point scoring and heated rhetoric. This all-important bill allows 60 days for public comment, and that opportunity closes around mid-February.
The draft Land Expropriation bill holds that no property, including land, may be expropriated arbitrarily or for any reason other than the public interest. It states that 'it may be just and equitable for no compensation to be paid where land is expropriated in the public interest'.
This draft law stands apart from the process to amend the Constitution, and does not rely on it. With or without a change to the Constitution, the new Bill would allow for land expropriation without compensation - where fair and appropriate.
There are five types of property in this draft law which can be expropriated without compensation. Only the Minister of Public Works can expropriate property - other organs of state can apply to that minister to expropriate on their behalf, and pass on the property to them, but the Minister must be satisfied that expropriation will be for a public purpose or in the public interest.
An expropriating authority may have the right to use property temporarily, if it's urgently required, for a period not exceeding 12 months.
The Big Five
In a nutshell, in this draft bill, property which can be expropriated without compensation
- Abandoned property
- Property owned by state-owned enterprises (like PRASA or Eskom)
- Land held for purely speculative purposes
- Land into which the government has already invested more than it's worth
- Land occupied by labour tenants
In more depth, land expropriation without compensation in this draft bill, can occur with:
- Abandoned property - no compensation 'where the owner of the land has abandoned the land'. Legal experts have previously speculated that hijacked buildings in the CBD would fall under this.
- Property owned by state owned enterprises - no compensation 'where the land is owned by a state-owned corporation or other state-owned entity'. Many of the more than 700 South African state entities have extensive land holdings.
- Land held for speculation - no compensation "where the land is held for purely speculative purposes". This bill is unclear on how to differentiate between land bought for future development, and that bought with the idea of buying-selling purely for a profit.
- Land into which the state has already invested more than it's worth - when the land's market value is less than the value of "direct state investment or subsidy" spent either to buy it, or on capital improvements made. It's believed that heavily subsidised or failed land reform projects could fall under this.
- Farms with labour tenants - no compensation, where 'the land is occupied or used by a labour tenant". Labour tenants are defined as 'people who live or have the right to live on a farm, or in some cases those who had parents or grandparents who worked on a farm in return for living there. They also include those who had the right to cropping or grazing.'
Author: Anne Schauffer
