Why you should be concerned by the Expropriation Bill

Private Property South Africa
Jackie Gray-Parker

The new bill, which is about to be passed into law, gives the state the power to expropriate any property and pay you what the government thinks it's worth.

During the course of May, the Expropriation Bill was passed in the National Council of Provinces (NCOP). The Western Cape was the only province that did not support the Bill. Now, all that really remains (bar approval by the Public Works Committee and the Assembly) is for President Zuma to sign it into law.

In essence, the Bill will enable the state to pay for land at a value determined by a government ‘adjudicator’ and then expropriate it “in the national interest”. Should the Bill come into force, it will effectively scrap the current ‘willing buyer-willing seller' approach to land reform.

The Bill replaces the Expropriation Act of 1975 and forms part of a number of other pieces of legislation which have already come into force or are being proposed with a view to rectifying the imbalances brought about by apartheid.

Government has already passed the Restitution of Land Rights Amendment Act (2014) which extends a window for restitution claims until the 30th of June 2019. To date, approximately 143 720 land claims have been submitted. The controversial Regulation of Land Holdings Bill and the Preservation and Protection of Agricultural Land Bill are making their way through the channels.

Why the criticism?

While seemingly noble in its intent, like so many things, the devil is arguably in the detail. The way in which government is tackling the land restitution issue has garnered criticism from all corners and has raised concerns about property rights going forward.

In terms of the Expropriation Bill, owners will be offered a certain amount for their property as determined by the valuer-general, an office created by the Property Valuation Act. The amount offered will take into account not only market value but also the purpose of the expropriation, the current use of the property, its history of acquisition and the extent of direct state investment in the property, all of which serves to essentially discount the price from its market value.

An owner may well believe their property is worth more than the amount offered. The Bill allows the owner to challenge the compensation offered but he/she would have to vacate the property while doing so. What’s more is that the owner would still be expected to maintain the property until ownership changes.

Needless to say this is problematic as it means an owner would be without the full value or use of their principal asset for years while the case proceeds through the courts. The fact that litigation is expensive and the outcome uncertain, owners would therefore be under considerable pressure to accept the initial below-market value.

What the experts have to say

The DA has stated that while it is not opposed to expropriation, the party is concerned that ‘property’ was not defined which could mean that even intellectual property (in the strictest sense) could be expropriated. Indeed, as things stand, it would seem that property of any kind could be expropriated for any reason that could be described as a ‘public purpose’ or ‘in the public interest.’

Dr Anthea Jeffery, head of policy research at the Institute of Race Relations (IRR) was forthright in her condemnation of the Bill when she stated that (in its current form) it’s just as unconstitutional as the 1975 Act it was intended to replace and leaves property owners open to massive losses should the government decide to expropriate their homes, land or other property.

Chairperson of the select committee on economic and business development Boingotlo Nthebe recently stated that the Bill is “progressive” and consistent with the Constitution and will [ensure] that the land – which is much needed for infrastructural projects – is availed without bringing constitutional challenges. He added that the Bill does not replace the need and commitment by the administration for consultation.

As things stand it’s just a matter of time before Zuma signs the Bill into law. It’s widely believed that if promulgated in its current form, the Bill will be challenged in the courts. Only time will tell.

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