The Expropriation Bill in South Africa - Land Reform

Expropriation Bill & Land Reform – What You Need To Know

By | Expropriation Bill

The word ‘expropriation’ sends a shiver down the spine of many property owners and so the Expropriation Bill, passed by the National Assembly in May 2016, has attracted a great deal of attention.

 

Just what is ‘expropriation’? Very simply, it is the taking of privately owned property by government (the expropriating authority) for the public good in return for ‘just and equitable’ compensation.
  
The Expropriation Bill in South Africa - Land Reform
  
[h2]Expropriation Bill[/h2] Expropriation has been acknowledged by the Constitution of South Africa as a means for the State to proceed with land reform, land redistribution and service delivery, for example. The 2015 Expropriation Bill is the latest – and depending on your viewpoint – the most effective and fairest legislation to date to deal with South Africa’s land issues.

 

That doesn’t mean it’s perfect! Questions are still being asked about the constitutionality of the bill and there is much concern about the powers given to the State in matters of expropriation, the amount of compensation that should be paid, property owners’ rights and so on.

 

Should you be worried? In this article we will give a brief overview of the clauses of the bill and aspects being debated. While it’s important to be aware of the ramifications, all is not doom and gloom, at least not at this stage.
  
[h3]Practicalities[/h3]

How will the bill work in practice? Are there enough qualified people in the employment of the State to implement the provisions of the expropriation bill? There is a lack of clarity here as well; the bill has yet to be tested in court. How robust is the document, currently awaiting the signature of the President before it becomes an Act of Parliament?
  
[h3]Objectives of the Bill[/h3]

The stated objective of the expropriation bill is to provide a uniform and fair procedure or framework for all expropriations, within the provisions of the Constitution.

 

In this context, the history of the acquisition of the property, the current use of the property and the purpose of the expropriation will be taken into account. As a land/property owner, you have the right to approach the courts if you believe the proposed compensation is inadequate. (The legal route can be a costly and time-consuming exercise; mediation is an alternative but this might not work for everyone.)
 
Let’s look briefly at the provisions of the bill …
  
[h3]How does it work?[/h3] The expropriating authority can only expropriate property for a public purpose or in the public interest.

 

If there is an intention to expropriate your property (remember, this is not restricted to immovable property), you will have the opportunity to negotiate with the authority (except in the case of an urgent, temporary use). The bill is clear that every effort must be made to reach agreement with the property owner/holder of an unregistered right.
  
[h3]What powers does the Department of Public Works have?[/h3] The minister has a ‘general power’ but property can only be expropriated if this is directly connected to the minister’s mandate. These powers can be delegated to officials in the Department of Public Works.

 

There are some limitations in delegating the powers. Officials may not:
 

  • Expropriate
  • Expropriate urgently on a temporary basis
  • Withdraw an appropriation
  • Make regulations

  
[h3]The pre-expropriation phase[/h3]

The expropriation bill outlines the guidelines that ensure the property is suitable for purpose:
 

  • The effects of registered and unregistered rights on the property (if there are any) on the possible expropriation have to be investigated thoroughly
  • The authority has the right to mandate surveyors and valuers to inspect the property, but if damage occurs as a result of these inspections, compensation may be due to the owner
  • Other government departments – Rural Development and Land Reform, Mineral Resources, Water Affairs and Sanitation, for instance – and the relevant municipality must be consulted

  
[h3]What next?[/h3]

The notice of expropriation is then served to all affected parties, detailing the following:
 

  • A description of the property
  • Purpose of the expropriation
  • Reason for the expropriation
  • A directive to the owner/s to provide details of any unregistered rights on the property
  • Details of the amount claimed as compensation
  • Diagrams or sketches

 
What happens if you have a right over a property? Rights are dealt with individually and separate notices must be delivered to each right-holder. Everyone has the same opportunity to object (in writing) and the authority has to consider all objections and submissions in good time before proceeding with expropriation. Incidentally, the same terms and conditions apply to rights-holders as to owners.

 

If you are involved in the expropriation of your property, the authority takes possession in the period between the delivery of the notice and the actual expropriation. Compensation will be paid for costs incurred but it is your responsibility to maintain the property.

 

In the second and final part of this article we’ll outline the remaining clauses and briefly discuss some of the concerns being expressed about the bill.
  
[h3]Contact Us[/h3]

Meanwhile, if you have concerns about the expropriation bill or your property and want to talk to an expert, contact Simon on 087 550 2740 or email sdippenaar@sdlaw.co.za

Rental Housing Amendment Act 2014 by Eviction Lawyer

Getting To Grips With The Rental Housing Amendment Act

By | Rental Housing Act

Rental Housing Amendment Act 2014 by Eviction Lawyer

 

We recently wrote about the Rental Housing Amendment Act 35 of 2014, still to be gazetted. It seems the article has focused the minds of our clients and we’ve had requests for more information on what the Amendment Act means for both landlords and tenants. So we will set out here what we see as the most important points.

 
 

[h3]Obligations of the landlord[/h3] Arguably the most significant change in legislation is the onus on the landlord to provide a written lease agreement, and the criminalisation of the failure to do so. This strikes us as a heavy-handed means to a reasonable end; and an alternative approach might be the provision of a default lease agreement enforceable in law in the absence of a written lease. This would encourage landlords to draw up written agreements if they want to be sure of including their own clauses, but not tie up court time enforcing an unnecessary criminal law should they be negligent in drafting the lease. But meanwhile, if you are a landlord, it is your responsibility to provide your tenant with a lease in writing.

 

The lease must contain, at a minimum, the street address of the premises, the rights and obligations of the landlord and tenant (which must comply with the Act), the deposit amount, the rental amount, any other charges, the frequency of payment and the process to follow if escalation of complaints is necessary.

 

Landlords are also obliged to ensure the tenant’s deposit is lodged in an interest-bearing account and to repay the deposit plus interest within seven days of the expiry of the lease. During the course of the tenancy the tenant is entitled to request written proof of interest earned on the deposit.

 

At the start of the lease, landlords must undertake to inspect the property with the tenant to identify any damages or defects. The tenant may insist that sub-standard conditions are rectified before moving in, and the landlord must comply. If the landlord fails to inspect the property with the tenant, then it is assumed that the property is in good condition. Allowance for post-rental inspection is also included in this section of the Act.

 
 

[h3]Rights of the tenant[/h3] In addition to the rights of the tenant implied in the landlord’s obligations above, there are several other tenant’s rights enshrined in the Amendment Act, not forgetting that the tenant also has obligations.

 

The privacy of tenants is thoroughly protected in the legislation. While landlords reserve the right to inspect the property from time to time, sufficient advance notice must be given. Unannounced, ‘spot’ inspections are not permitted, nor is a search of the premises, unless there is considerable reason to suspect misconduct and a court order has been obtained.

 

Tenants are entitled to written receipts for all payments made to the landlord, and to receipts for any repairs carried out to the property that may be deducted from the deposit before it is returned at the end of the lease.

 

Tenants must obtain the landlord’s consent before sub-letting any part of the property, but landlords are expected to grant permission, provided the request is reasonable.

 
 

[h3]Fit for human habitation[/h3] The Rental Housing Amendment Act 35 of 2014 was developed to remedy some of the shortcomings of the original Rental Housing Act 50 of 1999. The Amendment Act aims to improve the regulation of the landlord/tenant relationship and provide tenants with greater protection. It also attempts to strengthen the powers of the Rental Housing Tribunals and create a better appeals process; and most importantly it introduces standards for rental housing, as historically some landlords have exploited desperate tenants by offering woefully sub-standard dwellings for let.

 

The Amendment Act sets out quite clearly what the landlord’s duties are in terms of the condition of the property and the safety and security of the occupants. The term “habitability” is defined as referring to adequate space; protection from the elements and other threats to health; physical safety of the tenant, the tenant’s household and visitors; and a structurally sound building. Because property owners also have a right to the security and fair treatment of their dwellings, the amended Act offers landlords some protection against malicious damage caused by tenants, with the inclusion of reasonable rules and regulations in lease agreements.

 

We welcome this as an important step towards improving the quality of housing for some of the most vulnerable in our society and protecting landlords from disrespectful tenants.

 
 

[h3]Timing[/h3] A number of clients have asked about the implications of the Amendment Act for tenancy arrangements already in force. Legislation is not usually applied retrospectively. In the case of the Rental Housing Amendment Act 2014, when it is eventually gazetted, the terms of the Act will apply immediately for new lease agreements, and there will be a six-month transitional period to allow existing arrangements to be brought into line with the legislation.

 
 

[h3]Help is at hand[/h3] So don’t panic. But if you own multiple properties and have a large number of tenants, it might be advisable to begin the process of drafting leases in preparation for the new law to come into effect. Six months can pass very quickly, and not providing tenants with a written lease is a criminal offence, punishable by a fine or even up to two years in prison.

 
 

[h3]Contact us[/h3]

At Simon Dippenaar & Associates we are specialists in property law. We act for both landlords and tenants and therefore know the challenges faced by both parties; and we know the legislation as it affects both sides. Call us now on 087 550 2740 or email sdippenaar@sdlaw.co.za if you need help complying with the Rental Housing Amendment Act 35 of 2014 when it comes onto the statute books. Don’t leave it until the law is in place.

Rental Housing Act

Rental Housing Act Gets Teeth

By | Lease Agreement, Rental Housing Act

Rental Housing Act

 

Rental Housing Act – Whether you are a landlord or a tenant, you will be aware of the legislative environment that protects you when it comes to letting out your property or occupying a property as a tenant. Both parties have rights, and the law seeks to ensure that neither finds their rights abused or ignored. The Rental Housing Act 50 of 1999 sought to regulate the relationship between landlord and tenant. However, because the Act has proven difficult to enforce and thus weak from a practical and statutory standpoint, the Rental Housing Act Amendment 35 of 2014 was enacted. It has yet to be gazetted.

 

The Amendment Act has strengthened the rights and obligations that apply to both landlords and tenants, tightened up the rules surrounding inspections, deposits, the condition of a property and what should be included in the lease; and it has enhanced the powers of the Rental Housing Tribunals. Let’s have a look at these key areas in turn.

  
[h3]Landlord-tenant relationship[/h3]

South Africa is suffering from a severe shortage of quality housing. There are still far too many people living in sub-standard accommodation. The government is committed to promoting rental housing, and has a duty to ensure fair and equitable treatment of tenants, particularly the most vulnerable. However, it also recognises that property owners are entitled to security of their dwellings and have the right to protect their assets from abuse. The provisions of the Act seek to balance these two priorities.

 

  • Deposits: A landlord is entitled to a deposit before a tenant moves in, and this must be held in an interest bearing account . The Act does not stipulate the amount of the deposit, but in practice it is usually equivalent to one month’s rent. The landlord must give the tenant a written receipt for the deposit, and indeed for any other payments made. The tenant may ask the landlord to provide written proof of the interest earned on the deposit; and when the tenant moves out the deposit plus accrued interest must be repaid within seven days.

 

  • Inspection: In an effort to reduce conflict that arises over damages, the Act appears to have borrowed from the car hire industry! Both landlord and tenant must inspect the property together at the beginning of the lease and record any faults. They can decide together if the faults merit repair by the landlord, or if they can just be noted. For example, a leaking shower should be fixed to avoid danger and inconvenience to the tenant and water damage to the property. Scratches on paintwork may be merely registered so the tenant is not held responsible at the end of the lease. When the lease ends, the tenant must be available to conduct a final inspection with the landlord, to identify any damage that may have been caused during the tenancy. The landlord is entitled to deduct the cost of repairs from the deposit.

 

  • Condition of the property: This provision is undoubtedly an attempt to ensure that unscrupulous landlords do not attempt to pass off uninhabitable dwellings to desperate or vulnerable tenants as suitable for occupancy. The property must be ‘habitable’, which is defined as having adequate space and protection from the elements, being safe and secure and structurally sound. A landlord who fails to comply with this requirement can face a criminal charge.

  
[h3]Get it in writing[/h3]

When we’ve written about good letting practice in the past, we’ve advised that a written lease is always a good idea, but it was not previously a requirement in law. The Amendment Act changes that. It is the landlord’s responsibility to provide a written lease contract, and, as with the habitability clause, failure to do so is a criminal offence. The Act stipulates what should appear on the written lease, and this formalises what we have always recommended:

  • The names and addresses of both landlord and tenant;
  • A description of the property;
  • The agreed rent, how much and when it may increase (e.g. by 10% at annual renewal), and the frequency of payment (monthly, quarterly, etc.)
  • The deposit amount;
  • The notice period for quitting the property (applicable to both parties)
  • Information on the rights and obligations of the tenant and landlord, in other words what each party is responsible for, e.g. utilities, maintenance, etc. (usually, tenants pay for charges related to things they use, such as water and electricity, and landlords pays for charges related to the property, such as rates);
  • Information on the amount of any charges the tenant must pay over and above the rental cost;
  • A list of defects drawn up during the joint inspection (mentioned above) when the tenant moves in. This should be signed by both parties and attached to the lease

  
[h3]Who can help?[/h3]

The Amendment Act requires Rental Housing Tribunals to be established in all provinces, however, in the Western Cape we are fortunate to have a fully operational Rental Housing Tribunal. It can advise you of your rights and responsibilities as a landlord, and can help in the event of a dispute with a tenant.

Or contact us. At Simon Dippenaar & Associates we are specialists in property law. We act for both landlords and tenants and therefore know the challenges faced by both parties; and we know the legislation as it affects both sides.
 
Call us now on 087 550 2740 or email sdippenaar@sdlaw.co.za if you need help ensuring you comply with the Rental HousingAmendment Act 35 of 2014 when it comes onto the statute books. Don’t leave it until the law is in place.

Let us review your tenancy agreements now and help you draw up written leases where none are in place.