select
|

Significant Property-related Legislations To Come Into Force In 2017

There are a few significant changes on the cards for the South African property sector in 2017. Many of the regulations coming into force this year won’t necessarily be welcomed by all involved. These policy amendments are significant and include the 2015 Expropriation Bill,  Protection of Investment Bill, 2016, Deeds Registries Amendment Bill, BEE Property Sectoral Charter and the Sectional Titles Schemes Management Act. 

Keeping our clients informed with what's happening in property law and in the property market is top of the agenda for Just Property.  We do this through our close relationship with conveyancing attorneys, Greyvensteins Incorporated. We recently caught up with Cor Van Deventer of Greyvensteins to ask him for some of his insights on the Expropriation Bill and the Protection of Investment Act.

The Expropriation Bill


“The Expropriation Bill has received a great deal of attention in the media of late, particularly due to the controversial push from various parties to have this Bill passed as soon as possible,” shared Van Deventer. “Expropriations by the State, or organs of the State, are done on a very regular basis in the public’s interest. Government intends to speed up land reform with the new proposed legislation,” he added. 

“The Bill’s definition of property is so wide open to interpretation that it could include residential and commercial property, other moveable property, as well as intangible property such as intellectual rights. The definition of expropriation, as it currently stands, implies that the organ of the State or State itself can expropriate property on behalf of a private individual, or a private company. As compared to the Expropriation Act of 1975, which only makes provision for expropriation for public purposes, the new Bill goes a step further by including ‘public purpose’ and ‘public interest’ definitions. The new version of the Bill opens the door for expropriation of land for people who would like to undertake economic developments, such as low-income housing ? in fact, it encourages it,” said Van Deventer.

According to Van Deventer, previously, if Government expropriated land for roads, farmland or electricity usage, it was on the ‘willing seller, able buyer’ principle, where, if owners did not really want to sell, they didn’t have to. If Government didn’t offer enough compensation, property owners could refuse to sell and the land could not be expropriated. 

With the establishment of the Office of the Valuer-General, the government can now expropriate property and pay out what the valuators have determined the price of the property to be. This amount will be will be based on market value. To be considered will also be the property’s history of acquisition, current use and the purpose of expropriation. 

“The new Bill does require that the state first exhaust all efforts to purchase the property on reasonable terms in the open market before it can even consider expropriating it. This layer of protection is remarkable, even in comparison to countries like Canada or Australia,” said Van Deventer.

The Promotion of Protection of Investment Bill

Despite strong opposition, Protection of Investment Act was passed in November 2015. 

“The first draft of the Promotion and Protection of Investment Bill was prompted by the case of Piero Foresti, Laura de Carli and others versus the Republic of South Africa. Here, foreign investors challenged the South African policy of Black Economic Empowerment (BEE) in international arbitration. The matter was presided over by international arbitrators and Government lost. Government then became concerned that its policies, in this case BEE, would not be protected through the international arbitration mechanism,” explained Van Deventer. 

This lead to government reviewing its investment laws and regulations. “According to this Act, Government may take measures, in accordance with the Constitution and legislation, to redress historical inequalities, uphold the values and principles of the Constitution, foster economic development and protect the environment,” said Van Deventer. He added that this section is very vague and may be faced with a Constitutional challenge in the future.

“In its first draft, the Bill did not allow for international arbitration. It has tried to downplay concerns by stating that international arbitration may be resorted to, only if such arbitration is consented to by government and only once all domestic remedies have been exhausted. 

“With regards to equal treatment of foreign investors, previous Bilateral Investment Treaties (BITs) operated on the basis that all parties were treated equally in the investment relationship. The Act makes provision that foreign investors will not be treated less favourably than South African investors,” explained Van Deventer. 

He highlighted that the South African government has left very little room when it comes to taking into account foreign investor’s interests. “The investment security provision also states that foreign investors will get the same level of security as domestic investors, but this is subject to the State’s available resources and capacity. We need to take into account that the majority of BITs were entered into before our Constitution came into effect and therefore did not adequately protect the interests and values of our Constitution.”

Van Deventer also shared that it is still very early to predict what influence this Act will have on future foreign investment into South Africa. “It is clear that the Act protects South African interests above those of foreign companies. Proponents of this Act argue that it is in keeping with international trends, but other countries that have cancelled BITs, like Australia and Canada, have vastly different economic environments to ours. We need to strike a balance between protecting foreign interest and that of our own and only time will tell if this Act will achieve this.” 


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 23 Feb 2018
      RE/MAX Property Associates’ Table View Office, which services property buyers and sellers along the Table Bay coastline and surrounds, has recently sold a home in Woodbridge Island for R11 million – the highest price paid for any home in the sought-after security complex.
    • 23 Feb 2018
      Choosing to invest in an overseas property can be daunting. But as more and more investors recognise the value of a diversified portfolio that includes property outside of their own country of residence, international property investment is growing in popularity.
    • 23 Feb 2018
      The positive change in South Africa’s political landscape is paving the way for an upswing in the local property market.
    • 22 Feb 2018
      An excellent credit score is one of the most priceless assets a potential home buyer can have. This tool has the power to secure favorable mortgage and refinancing rate, influencing everything from the size of the loan repayment to the interest rate on the home loan.
    • 22 Feb 2018
      What do you do if you love your home’s location and the area, but the home no longer fits your growing family’s needs? Do you stay and renovate your existing home or find a home that meets your developing criteria?
    • 22 Feb 2018
      While every owner wants to sell their property at the best possible price, overpricing a home can be the kiss of death for a sale.
    • 21 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK