Real Estate Investor Magazine South Africa Real Estate Investor Magazine - April 2017 | Page 17

What is South Africa takes the route of
expropriation without compensation?
According to Simon Dippenaar of Simon Dippenaar
& Associates, redressing the historical imbalance of
land ownership in the country by the indiscriminate
expropriation of land, without compensation, is too
simplistic a solution. “As with any legal question,
the issue is far more complex and a much more
sophisticated solution is required,” says Dippenaar.
He highlights the following questions that need to be
considered:
• What is the status of the current landowner? A
small private farmer is in a very different situation
to a large commercial owner; a private owner with
multiple holdings who rarely visits the site can be
said to have less commitment to the land than a
farmer making a living from it.
• Is the land derelict, or conversely used for luxury
purposes that don’t benefit society, e.g., a private
game lodge?
• What is the legitimacy of the claims being made?
If the persons occupying the land have a plausible
belief that they have a right to be there, the
situation is radically different to an invasion of
land by individuals or groups whose purpose is
to disrupt the organised housing programme and
place themselves at the front of the queue.
• What use will the private land be put to, e.g., land
reform or general housing? If it is for land reform,
there may be alternatives to expropriation, such as
a joint venture or partnership
“Ultimately, expropriation of land without
compensation will need to be subject to a rigorous
Constitutional validation and, in my opinion,
would fall foul of the Founding Provisions of the
Constitution as they currently stand,” says Dippenaar.
The founding values to which he refers are:
• Human dignity, the achievement of equality and
the advancement of human rights and freedoms;
• Non-racialism and non-sexism;
• All citizens being equally entitled to the rights,
privileges and benefits of citizenship; and equally
subject to the duties and responsibilities of
citizenship.
Dippenaar feels that these Provisions would have
to be amended if a system of expropriation without
compensation were to be introduced.
“In reality, it would be extremely difficult to design
such a system in a way that would effectively balance
all the various rights involved. Expropriation with
suitable compensation would appear to be a more
workable solution for all,” says Dippenaar.
www.reimag.co.za
MICHAEL EVANS, PUBLIC LAW PARTNER
AT WEBBER WENTZEL, HIGHLIGHTS THE
FOLLOWING SIX ASPECTS RELATED TO
THE EXPROPRIATION BILL:
1 South Africa’s current expropriation legislation, the
Expropriation Act 1975, has been in force for over 30 years.
It is a draconian piece of legislation which confers far too
extensive powers on the authorities to expropriate. It was
passed long before South Africa’s new Constitution was
adopted.
2 The Expropriation Bill, 2015 (“the Bill”), in its latest form
as approved by the National Assembly, is vastly superior
legislation in all respects. It has been drafted in accordance
with the Constitution, and, in particular, section 25, which
deals with the right to property.
3 While some valid criticisms of the Bill have been raised by a
number of parties, those criticisms, while in some instances
worthy of consideration, do not negate the fact that the Bill
significantly strengthens the rights of property owners. This
is particularly so in relation to the process which must be
followed by the authorities before they take a decision to
expropriate.
4 The most important innovation is that the authorities must
first attempt to reach agreement with the owner of the
property for the purchase thereof on reasonable terms,
before they expropriate. They must also investigate
thoroughly and consult extensively before proceeding with
the expropriation. It is therefore little wonder that some
municipalities and other government departments have
quietly expressed concerns about the potential impact of the
new Bill.
5 This increased emphasis on process, and the protection
given to property owners, should ensure that the Bill, if
passed in its present form, does not deter potential investors
in property.
6 With regard to compensation to be paid for expropriated
properties, the Bill largely reiterates the approach adopted
in section 25 of the Constitution, which requires the amount
of compensation to be “just and equitable”. This essentially
involves the determination of the market value of the
property, adjusted by four factors: the current use, the
history of the acquisition and use of the property, the extent
of direct state investment and subsidy in the acquisition
and beneficial capital improvement of the property, and the
purpose of the expropriation. Courts will ultimately pay
a crucial role in giving more flesh to the phrase “just and
equitable”.
RESOURCES
Daily Maverick, The Gauteng Department of Infrastructure
Development, City Press, The Department of Public Works,
Simon Dippenaar & Associates, Webber Wentzel
APRIL 2017 SA Real Estate Investor
13