McCarthy Attorneys Inc

Expropriation Bill Another Step Closer To Becoming A Reality

The 2020 Expropriation Bill has been put before Parliament for consideration. If passed, it will replace the current Expropriation Act of 1975, which current Act will be deemed unconstitutional. 

Of the new Bill, Public Works and Infrastructure Minister Patricia de Lille stated in a media briefing on 11 October 2020: 

“The Chief State Law Adviser has now certified the Bill as constitutional. This paves the way for the next step in the process whereby the Bill has been gazetted on Friday 9 October 2020 and submitted to Parliament.”  

This new Bill provides for certain “just and equitable circumstances wherein no compensation would be paid for the property expropriated.  

To this effect, Sections 12(3) and (4) state that “It may be just and equitable for nil compensation to be paid where land is expropriated in the public interest, having regard to all relevant circumstances, including but not limited to: 

  • Where the land is not being used and the owner’s main purpose is not to develop the land or use it to generate income, but to benefit from the appreciation of its market value; 
  • Where an organ of state holds land that it is not using for its core functions and is not reasonably likely to require the land for its future activities in that regard, and the organ of the state acquired the land for no consideration; 
  • Notwithstanding registration of ownership in terms of the Deeds Registry where an owner has abandoned the land by failing to exercise control over it; 
  • Where the market value of the land is equivalent to, or less than, the present value of direct state investment or subsidy in the acquisition and beneficial capital improvement of the land;  
  • When the nature or condition of the property poses a health, safety or physical risk to persons or other property. 
  • When a court or arbitrator determines the amount of compensation in terms of section 23 of the Land Reform (Labour Tenants) Act of 1996, having regard to all relevant circumstances. 

We are pleased to report the removal of the most controversial clause in the previous version of the Bill, which stated that nil compensation may be paid where the land is occupied or used by a labour tenant. 

Regarding the abovementioned conditions, De Lille said: 

“The bill, however, does not prescribe that nil compensation will be paid in these circumstances. The bill provides that the amount of compensation will be determined by the courts.”  

As it currently stands, the Constitution is compensation orientated when it comes to expropriation. However, the proposed amendment to the Constitution is also still underway, whereby it is set to be amended to allow for expropriation without compensation, making it easier to give effect to the Expropriation Bill if passed. 

If you have any questions about other Labour or Land issues, contact McCarthy & Associates Attorneys on (033) 266 6170 or ad***@ma****.za