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.
[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.
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 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
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.
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 email@example.com