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BUSINESS NEWS - If you ask any person to list his/her biggest concerns in South Africa today, crime and the possible expropriation of land without compensation will probably top the list of 90% of South Africans. Should people be worried? If you are a property owner, the short answer is “yes”.

The main reason why people should be worried about changing the Constitution, to make provision for expropriation without compensation, is simply because there is no certainty and detail in the proposed amendment. This is unfortunately a direct result of the fact that the proposed amendment is more politically orientated than legally founded.

Section 25 of the Constitution secures ownership and states that property may only be expropriated in terms of law of general application for:

(a) a public purpose or in the public interest; and

(b) subject to compensation, the amount of which and the time and manner of payment of  which have either been agreed to by those affected or decided or approved by a Court.

The Section then goes further and provides certain specific factors which must be taken into account in determining whether compensation is fair and reasonable.

The proposed amendment to Section 25 of the Constitution, in short, makes provision for the possibility of expropriation with no compensation, provided that a Court may, where land and any improvement thereon is expropriated for the purposes of land reform, determine that the amount of compensation is nil. This is the crux of the amendment. It however needs to be noted that the current process only deals with the Constitution in regard to Section 25 and is not in itself the go-ahead for government to now start expropriating land without compensation.  Even if this amendment is passed, Parliament should still adopt a law of general application which makes provision for such circumstances.

The biggest criticism against the new political drive behind expropriation without compensation is that government and government officials (such a Ministers) already have powers to expropriate land and that the Restitution of Land Rights Act of 1994 has been enacted to make provision for land restitution and distribution since the birth of democracy. It is common cause that the current land claims process has been marked by inefficiencies and irregularities. Furthermore, records suggest that more than 90% of claimants in restitution cases have chosen cash settlements rather than the land itself. This is however more a political argument than a legal one.

It seems to be a given that Section 25 of the Constitution will be amended to make provision for expropriation without compensation. The devil will however be buried in the detail. One positive aspect is that a Court will always have the last say in determining whether a proposed expropriation falls within the ambit of the Act (still to be drafted), which in itself will make provision for expropriation, only within a certain category of owners (such as owners who owns land for speculative purposes only).

The question is therefore not whether compensation will be payable or not but rather how and on what basis no compensation will be determined. The Ad Hoc Committee to initiate and introduce legislation amending Section 25 of the Constitution committed to complete their task of initiating and introducing legislation amending Section 25 by 31 March 2020. They have provided the public with an opportunity to participate and comment during December 2019 until February 2020.

Although there should be no doubt that redistribution of land is to occur, government should be extremely cautious in the way they approach this mine field.

It lastly needs to be mentioned that the South African judiciary is independent and has a proven track record of keeping politicians in line. I am of the view that this will not change in future. One just hopes that citizens will not take matters into their own hands, like in Zimbabwe, once the Constitution has been amended. Such actions however have been criticized by government and owners are therefore advised to act immediately once the threat of unlawful land invasions become a reality. I doubt whether this will ever be allowed by government as it will result in an exodus of investors which will have a detrimental effect on South Africa and its economy.

For any further information in regard to the specific details and ongoing parliamentary processes concerning expropriation without compensation kindly contact Pieter van der Merwe at 044 601 9900 or per e-mail at: office@rgprok.com.

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