New draft bill worry for property owners

THE draft Expropriation Bill is back and while it may pass constitutional muster, it’s still a cause for concern, said analysts.

The bill was recently published for public comment, which closes at the end of business on April 30.

The bill is also at odds with the country’s National Development Plan (NDP), said the South African Institute for Race Relations (SAIRR). If passed, it would give almost any state entity the power to seize any form of property, potentially without adequately compensating owners soon after the expropriation.

SAIRR’s Dr Anthea Jeffery said this bill was better than its predecessor in that it conceded courts’ power to determine the amount payable for an expropriation.

“But property owners would need deep pockets in order to fund litigation should they challenge that amount decided on by the state entity,” she told the Daily Dispatch.

“There aren’t many people who can be without property and without the full compensation and still afford to challenge this in court.”

Jeffery said the bill was over-broad in its definitions, including that of “expropriation authority”.

“Any juristic person that is governed by the Public Finance Management Act (PFMA) is given powers to expropriate,” she said. This includes governing bodies at local, provincial and national levels; constitutional entities; and even parastatals like Telkom, Eskom or Transnet.

Under the bill, all property is liable for expropriation, including mining rights, business premises, and even patents and shares.

The bill also states that compensation for expropriated property becomes payable only when the amount is agreed by the state or decided by the courts.

“This puts great pressure on the expropriated owner to accept the amount of compensation offered by the state, rather than remain without the benefit of either the property or its value in money,” Jeffrey said.

“The way the bill is currently written, there is more incentive to expropriate than there is to actually just buy the property. Instead, state entities can expropriate the property for a small amount, knowing that the rest is only payable after a court challenge.”

Jeffrey also stressed that the bill contradicts the NDP, which stresses the importance of secure tenure to land for agriculture, for instance.

“The NDP is supposed to be the government policy blueprint and to have an overriding effect on all policy choices,” she said.

The draft legislation will repeal the Expropriation Act of 1975 and aims to give guidance to individuals and government when faced with an expropriation process.

The previous Expropriation Bill was published in April 2008, but was withdrawn in September of the same year due to a public outcry.

“The 2008 bill was clearly unconstitutional in seeking to oust the jurisdiction of the courts and make the government the arbiter of the compensation to be provided on expropriation,” Jeffery said.

E-mail the National Department of Public Works director of property policy development Manyane Chidi at to comment on the Bill. —

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