Expropriation –Protecting Property Rights

INTRODUCTION

The time period for comments to the Expropriation Bill as published in the Government Gazette No. 43798 of 9 October 2020 expired on 28 February 2021. Comments had to be submitted to the Portfolio Committee on Public Works. It is now anticipated that as soon as the amendment to section 25 of the Constitution has been finalised the Expropriation Act will be passed by Parliament very much along the lines of the Expropriation Bill.

Whilst the Expropriation Act, in the hands of responsible Government, may be utilised in a reasonable manner there is always a possibility that even a responsible Government under political pressures may abuse the provisions of the Act. In the hands of a populist political party, the Expropriation Act could prejudice those owning property. During early April 2021 the media reported that government officials attempted to expropriate the land of small black farmers. There was an outcry and threatened by legal proceedings, the Government withdrew the instruction.

Section 25 of the Constitution of the Republic of South Africa (“the Constitution”) endeavours to protect both traditional property rights and the public interest by striking a proportionate balance between these two functions. However, in South Africa there exists great tension between individual property rights, on the one hand, and social responsibilities including redress, on the other.

PRIVATE PROPERTY

The Courts have already emphasised the non-absolute nature of private property rights envisaged by the Constitution to permit “orderly opening up or restoration of secure property rights for those denied access to or deprived of them in the past”. The Expropriation Bill is problematic because it does not specifically refer to the expropriation of land or buildings. It broadly refers to the expropriation of “property”. Section 25(iv)(b) of the Constitution states unequivocally that property is not limited to land. Thus property can include all assets. There is no reference currently in the Bill that the value of any property will be the net value.

Similarly, in dealing with the rights of property section 25 of the Constitution provides that property may be expropriated only in terms of law of general application under certain conditions, including for a public purpose or in the public interest. Section 25(iv)(a) further provides that the public interest includes the Nation’s commitment to land reform and to reforms to bring about equitable access to all South Africa’s natural resources.

COMPENSATION

The current Expropriation Bill provides, inter alia, for:-

  • when property may be expropriated without any compensation whatsoever; and
  • the procedures for the expropriation of property no matter the nature of such property.

If the provisions of the Bill in relation to the timing of expropriation are retained in the Act, then members of the public could discover that the provisions are far reaching and could have negative effects upon rights of property. For example, the Expropriating Authority in a Notice of Intention to Expropriate may determine an effective date of expropriation. The rights of ownership in the property will be deemed to have passed to the Expropriating Authority on that date notwithstanding that any challenges to the right to expropriate or the amount of compensation may not have been finalised either as between the parties or by the Courts following the referral of a dispute.

It is essential that clients as early as possible and in the knowledge that the Expropriation Act will eventually be passed take such steps as are necessary to best protect their property.

ASSISTANCE

Cowan-Harper-Madikizela Attorneys has established a team of specialists who are in a position under the proposed legislation to advise you how to protect properties (assets).

Inter alia, we conduct audits of assets in order to ascertain whether you are the owner of any property which may be subject to expropriation without compensation and then advise on the methods of positioning that property so that it will at least become property subject to compensation. If you wish to obtain advice on property rights please communicate with Lennard Cowan or Henry Korsten.

Cowan-Harper-Madikizela Attorneys accepts that there must be land reform in South Africa. The legislation should be clear. The issue is whether there will be abuse of rights and what can be done in those circumstances.

Written by Lennard Cowan and Henry Korsten
of Cowan-Harper-Madikizela Attorneys

Lennard Cowan of Cowan-Harper-Madikizela Attorneys
Henry Korsten of Cowan-Harper-Madikizela Attorneys