CONCERN ABOUT ASPECTS OF EXPROPRIATION ACT GROWS
News > news - 29 May 2008
While the strong reaction, described in one report as “near panic”, to the
new Expropriation Bill currently before Parliament is definitely not
warranted, it is of concern to the real estate industry (and to the legal
profession in general) that any counteraction or protest about
expropriations under the new bill will now have to take place after the
property has been taken over by the state.

This was said recently by Tony Clarke, Managing Director of Rawson
Properties, in answer to over half a dozen enquiries from the general public
on the new bill.

“The fact that counteraction now takes place only post expropriation,” said
Clarke, “will make it extremely difficult to oppose the state because, as we
all know, these cases can be drawn out for years, during which time the
owner could be without a home, a factory or without an income from his
property.”

Drawing attention to a Milton Matsemela Attorneys’ newsletter that discusses
the bill, Clarke said that he agrees with the author that the individual’s
rights in South Africa, which should under our constitution usually take
precedence over those of the state, appear now to have been sidelined.

The background to the new bill, said Clarke, is that the government always
has had the right to expropriate private property provided that it was
needed for a “public purpose” and provided that the state paid a genuine
market-related compensation negotiated transparently with all parties.

“In practice,” said Clarke, “the words “public purpose” were usually taken
to mean “public works”, e.g. a road, a pipeline or a school. Furthermore,
those calculating the compensation had to take into account an exceptionally
wide range of factors such as the history of the property, the length and
time that the current owner or his family had possessed it, the improvements
carried out during that time, the return the state could achieve on it and
the sentimental or emotional attachment the owners might have to it. In
addition, the state was obliged to take “reasonable legislative or other
measures” to help the dispossessed owner to find an alternative property “on
an equitable basis” if he required it.”

Under the new act, said Clarke, the words “public purpose” have been
replaced by “in the public interest” and many lawyers are undecided as to
how greatly this could empower the state. Nor, added Clarke, are they sure
that the new clause relating to the “market value” being paid for the
property will carry much weight because, again, this value can only be
disputed after the expropriation.

“This is particularly worrying,” said Clarke, “because the value will be
determined solely by the expropriators without, it seems, reference to
independent consultants or valuers or the current owner.”

Clarke said that the impression that many lawyers now have is that the state
is seeking seriously to limit the courts’ ability to delay or prevent
expropriations.

Quoting from the Milton Matsemela document, Clarke said,

“By excluding the courts’ power to determine whether expropriation is truly
in the public interest or not, the government has effectively, in a
disturbingly immoral fashion, exploited the vagueness of the constitution on
these matters and have given themselves virtual carte blanche.”

Again referring to the Milton Matsemela report, Clarke added that because
the state still has to pay “real money” for any expropriation, they would be
very limited in their ability to carry out these on a large scale. The bill
is, therefore, likely to be applied almost exclusively in the cases of land
reform - which most real estate professionals accept as a necessary part of
the current transformation process.

“It seems clear that, unlike certain countries to the north of South Africa,
the ANC are highly aware of the value of direct foreign investment and the
benefits of being viewed globally as a capitalist economy. It is highly
unlikely, therefore, that property rights will be seriously affected by this
new bill, despite its apparently increased powers,” said Clarke.

For further information contact Tony Clarke on 021 658 7100 or email
research@rawsonproperties.com.
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