PURPOSE OF THE BILL

The purpose of the Bill is: -

  • To provide for the expropriation of property for a public purpose or in the public interest;
  • To provide for the payment of just and equitable compensation when expropriation has taken place.
  • Once the Bill is passed into law, it will repeal in its entirety the Expropriation Act 63 of 1975, as amended.

OVERVIEW OF THE BILL

The Bill is relatively short and it consists of 7 chapters as follows: -

  • Chapter 1 - Definitions and Application of the Act;
  • Chapter 2 – Powers of the Minister of Public Works to Expropriate;
  • Chapter 3 – Investigation and Valuation of Property;
  • Chapter 4 – Intention to Expropriate and Expropriation of Property;
  • Chapter 5 – Compensation for Expropriation;
  • Chapter 6 – determination by court, Urgent Expropriation and Withdrawal of Expropriation; and
  • Chapter 7 – Related Matters.

GENERAL COMMENT (S)

The Bill restates Section 25 of the Constitution of the Republic of South Africa of 1996 ("the Constitution"), which basically guarantees property right(s). Section 25(1) of the Constitution provides that "No one may be deprived of property except in terms of law of general application and no law may permit arbitrary deprivation of property". Once the Bill becomes the Act, it will effectively be that law of general applicable as set out in Section 25(1) of the Constitution.

Section 2 of the Act makes it abundantly clear that the property will only be expropriated for a public purpose or public interest.

Before expropriating the property, the expropriating authority must attempt to reach an agreement with the owner on reasonable terms.

In the following paragraphs, I highlight those provisions of the Bill that I think are important.

IMPORTANT DEFINITIONS FROM THE BILL

  • Date of Expropriation – means the date confirmed in the notice of expropriation;
  • Expropriation Authority – means an organ of state or a person empowered by the Expropriation Act to acquire property through expropriation;
  • Property – means land and includes a right in such property;
  • Public Interest – means nation's commitment to land reform, and to reforms to bring about equitable access to all South Africa's natural resources;
  • Public Purpose(s) – means any purpose committed with the administration of the provisions of any law by an organ of state;
  • In calculating days in terms of this Act, a Saturday, Sunday or public holiday must not be reckoned as part of any period. So will be the period 20 December to 7 January inclusive.

CHAPTER 3

This deals with the investigation and valuation of the property.

Of importance in this chapter is Section 5, which provides that the suitability of the property for the purpose for which it is required will be undertaken, and the existence of registered and unregistered rights in such property and the impact of such rights on the intended use of the property.

Section 6 further obliges the expropriating authority to request, in writing from the Municipal Mayor of the Municipality where the land is situated, to inform the expropriating authority of the effects, the purpose for which the property is being acquired may have on existing and future engineering services, infrastructure, housing and town planning.

CHAPTER 4

This deals with the intention to expropriate and expropriation of the property.

Section 9 – vesting and possession of expropriated property provides that the property vests in the expropriation, released from mortgage bonds, on the date of expropriation.

CHAPTER 5

This deals with compensation payable to an expropriated owner.

Section 12 provides that the amount of compensation must be just and equitable. The factors which will be taken into account in calculating compensation will be the following: -

  • The current use of the property;
  • The history of the acquisition and use of the property;
  • The market value of the property;
  • The extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property;
  • The purpose of the expropriation.

Does the fact that the property is now expropriated mean that the outstanding rates cannot be paid?

No. The expropriating authority is allowed to use part of the compensation to settle outstanding rates (Section 19).

What if the expropriated property is subject to a bond or a sale?

Before the compensation is paid out, there must be an agreement as to the apportionment of the compensation between the claimant and the bondholder or buyer. If an agreement cannot be reached, the Expropriation Authority will pay according to the Court Order.

What if there is a dispute as to who is entitled to compensation?

The expropriation authority may pay the amount of compensation to the Master of the High Court (Section 20). A Court has jurisdiction to make an Order in respect of the compensation received by the Master of the High Court.

CHAPTER 6

Determination by Court: A Court will determine any dispute between an Expropriation Authority and an expropriated owner on the compensation to be paid in respect of the expropriated property (Section 2(1)).

Urgent Expropriation: The Bill grants an expropriating authority a right to use the property temporarily for a period not exceeding 12 months provided that there is no suitable property held by the National, Provincial or Local Government available under the circumstances where there is a disaster and a Court grants an Order because of urgent and exceptional circumstances, there is real and imminent danger or substantial injury or damage to life and property (Section 22).

CHAPTER 7

Service of Documents (Section 24): sets out the means through which any notice or other document issued under this Act is to be served on any person;

Extension of Time (Section 25): this section gives the Expropriation Authority discretion to extend the time period whenever a period is mentioned within which something must be done;

Expropriation Register (Section 26): the Director-General of the Department of Public Works must ensure that a register is kept of all expropriations that are intended, effected and withdrawn;

Offences (Section 27): sets out offences in relation to contravening Sections 7(f)(ii); 7(4)(c)(ii) or (iii) and 8(4)(e). The penalty is a fine or imprisonment for a period not exceeding 6 months, or both a fine and imprisonment. If a person furnishes false or misleading information, that person will be punished as if he/she had been committed of fraud.