Update on the Land Expropriation Bill
The Expropriation Bill 2020 was gazetted and submitted to parliament for review last year. This Bill, alongside the amending of Section 25 of the Constitution, will allow expropriation without compensation in South Africa for the first time.
On 24 and 25 March 2021, Parliament’s Public Works and Infrastructure Committee heard presentations from several organisations on the proposed Expropriation Bill pertaining to a number of concerns. No feedback has been provided pertaining to the issues raised as yet. Once these issues have been addressed, parliament will make a decision as to whether or not the Bill will be passed.
What is expropriation?
Expropriation is the act of an expropriating authority (organ of state/government representative) claiming privately owned property to be used for the benefit of the public.
The Expropriation Bill is intended to provide some clarity on land expropriation and how it would be enforced without infringing on the right to equality and being in line with section 25 of the Constitution (right to expropriation).
How does one determine whether a property falls into the ‘nil compensation’ category?
Chapter 5 of the Bill states that it “may be just and equitable for nil compensation to be paid where land is expropriated in the public interest” in these circumstances (but not limited to):
- Where the land is not being used and the owner’s main purpose is not to develop the land or use it to generate income, but to benefit from the increase of its market value;
- Where a government institution holds land (which it did not pay for) and is not being used for its “core functions” or likely to require the land for its future activities in that regard;
- Where an owner has abandoned the land by “failing to exercise control over it”;
- Where the market value of the land is equivalent to, or less than, the present value of direct state investment or subsidy in the acquisition and beneficial capital improvement of the land; and
- When the nature or condition of the property poses a health, safety or physical risk to persons or other property.
- Nil compensation will only be applicable to land expropriated for land reform, and not to expropriations in general.
How will this expropriation process work?
- Expropriation of property with or without compensation can only proceed in select circumstances and following specific processes, outlined below:
- An expropriating authority will determine how suitable the property is for the purpose of the expropriation and establish the extent of the rights to the property.
- The authority must serve the owner a notice of intention to expropriate. The owner must present an amount which is “just and equitable” to them or lodge an objection to the expropriation.
- If the expropriating authority proceeds with the expropriation, a further notice must be served, stipulating the amount offered/agreed upon; and that the owner may institute court proceedings to dispute the amount within 180 days of the date of expropriation.
- If an agreement cannot be reached, they may attempt to settle the dispute by mediation or by approaching a court.
- If however, the property falls into the “nil compensation” categories listed above, then the authority can take the decision to not pay any compensation.
When are urgent expropriations applicable?
Chapter 7 of the Bill entitles an expropriating authority to urgently expropriate property. This is however limited to where any property held by the national, provincial or local government is not available and the property is needed in terms of the Disaster Management Act or a court order.
The above provides an indication of how the Land Expropriation Bill will be applied in practice should it be passed. It is uncertain as to when this Bill will be given effect and we now await parliament’s decision in this regard.
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Should you require any further information regarding land expropriation, please contact our experienced Conveyancing and Property Law team.
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