SA's new Expropriation Act: The facts

The most important thing to know about South Africa's new Expropriation Act* is that it does not put the owners or buyers of residential or commercial properties in South Africa at risk of having their homes expropriated without compensation.

So says Berry Everitt, CEO of the Chas Everitt International property group, who notes: "The impression created by some badly informed - and quite irresponsible - commentary is that this legislation means all property owners in SA are now at risk of the State suddenly deciding one day to expropriate their home, farm or business and pay them nothing for it.

"This is simply and absolutely not true. In fact this Act will help to protect the interests of property owners in SA because it stipulates very strict and specific conditions that must be met for the State to be able to justify any expropriation. It also clearly sets out the multi-step processes that must be followed and completed to:

*Determine a 'fair and equitable' compensation offer (Section 5),

*Negotiate that amount with the property owner, and

*Resolve any dispute."

In addition, he says, the Act stipulates that the final resolution of any dispute rests with the Courts, not with the Minister of Public Works and Infrastructure.

"And as a result, SA's top property lawyers are agreed that this legislation will not increase the possibility of zero or nil compensation being paid, but may in fact limit it, as far as private owners are concerned - to some very rare cases such as when the State is able to justify the expropriation of empty land which it can prove that the owner does not currently use, or intend to develop, or have plans to utilise in future to generate income. This and other such instances are listed in Section 12(3) of the Act."

The second important thing to know about the new Act, Everitt says, is that it is not called the Expropriation Without Compensation Act. "It is simply the Expropriation Act (Act 13 of 2024) and is what is known as procedural legislation, because it is really only a set of guidelines for giving effect to the principle of expropriation that is already enshrined in the Constitution. In short, it is about the 'how' and not the 'what'.

"And thirdly, it is important to understand that the concept of expropriation is by no means unique to SA. Indeed, most countries have similar laws enabling the State to expropriate private properties for the public purpose - such as the need to build a new road, railway, hospital or school in a particular location - and providing for the owners of those properties to be compensated."

What is different, he says, is that Section 25(a) of our Constitution also provides for expropriation 'in the public interest', and there has been considerable concern in the past about what this ill-defined phrase could be interpreted to mean, or how it might be used to justify unfair or inequitable actions.

"Now, however, even this worry falls away, since the new legislation makes all proposed expropriations subject to the same set of rules, and subject to the same legal challenges, no matter what the motivation for them might be."

In every case, the Act says, the expropriating authority must consider all relevant circumstances and must ascertain (and be able to prove):

*The suitability of a property for the required purpose,

*The existence of all registered and unregistered rights in the property,

*All facts relevant to the calculation of an offer of just and equitable compensation for each person that would be affected if the property were expropriated, and

*The effects that the proposed expropriation might have on any plans being made by the relevant municipality (Sections 5 and 6)."

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SA's new Expropriation Act: The facts