Tuesday, July 29, 2008

SA's new 'Land Expropriation' law

This is old information but in response to a query yesterday, here is a recap about the new Land Expropriation Bill.

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This article was published by the Institute of Estate Agents of S.A. regarding the proposed bill.

What is expropriation?

Expropriation is the act of taking possession of an item of property from its owner in exchange for (little or no) compensation and irrespective of the wishes of the original owner.

What can be expropriated?
Any property can be expropriated, meaning movable and immovable property and rights in connection therewith.

Actions by the Department of Pubic Works

The Department has started on the business of reviewing the laws on expropriation which become matter of urgency after the ANC conference in Polokwane with a workshop held on the 15th February 2008.

This new act will replace or amend the current Expropriation Act, 63 of 1975 and several others.

Why the change?
There are many reasons for the change, one being that the current Act is a restrictive one in that it restricts the state to expropriate only "for public purpose". It does not comply with the Constitutional provision which states that the state can expropriate "in public interest".

The new act will harmonize over 100 pieces of legislation empowering various state organs to expropriate.

What is “Public Purpose”?
Public purposes include any purpose connected with the administration of the provisions of any law by an organ of state. That's why Gautrain c
an expropriate your property, near and dear to your heart and in your family for ages.

Principles to comply with under the new Act
Include that expropriation must be in the public interest, the scope of protected rights must be expanded and the alignment of payment of compensation with the provisions of the Constitution.

What is the amount of compensation under the current Act?
Section 35(3) of our Constitution requires the government to pay "just and equitable compensation". In practice that means market value.

The amount of compensation to be paid shall not exceed the aggregate of the market value of the property and an amount to make good any actual financial loss. This is where the problem arises for many ordinary citizens.

What about improvements on your property for which you don’t have municipal approved plans?
Section 12(5)(c) of the Expropriation Act, 63 of 1975 states that if the value of your property has been enhanced in consequence of the use thereof in a manner which is unlawful, such enhancement shall not be taken into account.

The Effect
This simply means that should you have converted your dilapidated barnyard (for which you had approved plans) into 4 luxury guest rooms which you rent out for a substantial extra income, you will not be compensated for the building costs thereof (only for the value of the dilapidated barnyard), the loss of rental income or the enhancement to the value of your property.

Can I stop an expropriation?

No, once you receive your notice, your property has already been expropriated and is compensation the only issue that remains. You can only stop the expropriation if the correct procedures were not followed.

Last Word
Please ensure that all your improvements on your property (including swimming pools, patios, lapas and the like) have municipal approved plans – not doing so, might cost you very dearly in any possible expropriation process.

Bill worries SAPOA
The South African Property Owners Association (SAPOA), an industrial and commercial property lobby group has expressed concerns about cer
tain clauses in the Expropriation Bill's draft policy.

"SAPOA supports the land reform process, but has serious concerns about the proposed amendments in the latest draft that has been circulated," said SAPOA CEO Neil Gopal.

SAPOA legal head Tsakane Shilubane said the Bill needed to conform to the constitutional rights of the property owners.

"The Constitution is, after all, the dominant legislation when it comes to expropriation – and any secondary legislation must yield to the Constitution," she said.

Critically, SAPOA remains of the view that Sections 25 and 33 of the Constitution make the introduction of a separate expropriation policy superfluous.

These sections already define the concept of public interest and enshrine the right for everyone to have recourse through the Promotion of Administrative Justice Act, 2000 (PAJA). "We just don't believe that the Expropriation Act entirely reflects these Constitutional provisions, something that must be corrected," said Gopal.

Another crucial sticking point for SAPOA is the lack of independent recourse available in the Bill to expropriatees.

"The Bill limits one's rights to recourse to the courts," said Shilubane. Gopal added that international investors were indicating their concern about the way in which the Bill was drafted and believed that there was an urgent need for greater clarity in the compensation provisions.

Groups oppose expropriation bill
A dozen rightist and mainly Afrikaner organisations have decided on joint action against the expropriation bill currently progressing through parliament.

The groups have named five individuals to decide on what action to take and to carry it forward.

This "interim committee" comprises Kallie Kriel from the AfriForum, a lobby group associated with the Solidarity trade union, Bennie van Zyl from the agriculture union TAU SA, Theo de Jager who chairs Agri-SA's land affairs committee, Dave Steward of the FW De Klerk Foundation and Jaco Schoeman from the Afrikanerbond.

The organisations supporting the protests also include the Agricultural Employers' Organisation, the National Tax Payers' Union, the Freedom Front Plus, the Democratic Alliance, the Regslui vir Afrikaans and the Afrikanerfront.

A statement issued by the group after their meeting in Johannesburg said that in addition to parliamentary submissions and presentations already made and still to be made, legal action is being planned.

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