What You Need To Know About The New Expropriation Bill

What You Need To Know About The New Expropriation Bill

Putting the “expropriation without compensation” Jack in the box, back in its box where it belongs. 

On Thursday 24 January 2025, the Expropriation Bill was signed into law. What a flurry this has caused! We even have President Trump getting excited. If anyone reading this has a direct line to President Donald Trump, please get this to him, urgently. Until then, let’s answer the questions on everyone’s minds:

1. Is the Act in force yet?
   
   No. It was only signed into law. This means that it is now final, however, it has not yet commenced, in other words, it does not yet apply. And to be honest, given the furore that this has caused internationally, with President Trump threatening to withdraw funding, the commencement date is a mystery and will probably remain one for the very distant, foreseeable future! Just like the “latest” amendments to the Rental Housing Act of 1999 (which were signed into law in 2014, but have still not commenced!), we might see this in 10 years from now – if at all.
    
2. What is the purpose of the Act? 
   
   Aside from probably appeasing some of the hierarchy’s supporters, the purpose of the Act is to provide for the expropriation of any property (and this means literally, any property, not just land) for:
   
   2.1. a public purpose (such as roads; hospitals; schools and so forth); or 2.2. in the public interest (to address wrongs from the past arising out of discriminatory practises), 2.3. with or without compensation (and in the latter case it is limited to land); and 2.4. in a manner that is consistent with the Constitution of 1999.
    
3. What does the Constitution say?
   
   Section 25 (2) (b) of the Constitution provides that “property may be expropriated only … subject to compensation”.
    
4. But then this Act is unconstitutional, is it not?
   
   4.1. Section 36 of the Constitution states that all our human rights, as enshrined in the Constitution may be limited “... to the extent that the limitation is reasonable and justifiable.” 
   
   4.2. As such, the right to be compensated is also not absolute - and never has been under the Constitution! All that is needed, is a law, which tells us when and how and under which circumstances, zero compensation might just be a consideration. And that is exactly what the Expropriation Act seeks to do. It merely seeks to clarify this limitation of our human rights – which is perfectly legal if it is “reasonable and justifiable”.
   
   4.3. In addition, sections 33 and 34 of our Constitution also guarantee:
   
          4.3.1. administrative action that is lawful, reasonable, and procedurally fair; and
   
          4.3.2. the right to take any such decision on review to a court; and 
   
          4.3.3. the right to take any dispute which “can be resolved by the application of law”, to a court of law.
   
          4.3.4. This means that any decision to expropriate without compensation, is subject to judicial review.
    
5. How will this work?
   
   5.1. Firstly, in deciding whether to expropriate, the expropriating authority must take into consideration:  
   
   * the current use of the property; * the history of the acquisition and use of the property; * the market value of the property; * the extent of direct state investment in the property; * the purpose of the expropriation;* any other relevant circumstances.
   
   5.2. Secondly, anyone who has a known right in or to the property, must be given written opportunity to oppose the intention to expropriate.
   
   5.3. In other words, all owners of the property; anyone with a registered real right such as a bond holder or a usufructuary; a spouse who stands to receive the property due to a divorce order, or a beneficiary who stands to inherit the property from a deceased estate, has the right to air his or her views, and to be heard.
   
   5.4. That said - Section 12 of the Expropriation Act then provides the following:
   
          5.4.1. It is possible to expropriate land, without compensation but only if the expropriation is intended to be in the public interest i.e. to redress discriminatory practises from the past; and
   
          5.4.2. having regard to all relevant circumstances, namely those factors mentioned above, and including, (but not necessarily limited to):
   
                   * land that is not being used and where the owner’s main purpose is not to develop the land or use it to generate income, but to benefit solely from 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 state acquired the land for no consideration; 
   
                   * where an owner has abandoned the land by failing to exercise control over it despite being reasonably capable of doing so; or
   
                   * 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. 
    
6. Does this mean the expropriating authority can unilaterally make a decision?
   
   6.1. No. Section 19 of the Expropriation Act clearly states that if the parties cannot agree on the amount of compensation (and this would include cases where nil compensation is being offered), then either of the parties may refer it to mediation, and if that fails, then the disputing party may, instead of instituting court proceedings himself or herself, and within 90 days of the date of the notice of expropriation, request the expropriating authority, in writing, to institute such proceedings, and the expropriating authority must then institute such proceedings if it wishes to pursue its intentions.
   
   6.2. In other words, as long as the landowner requests it, it must be referred to court and a court order must first be obtained by the expropriating authority.
    
7. But if any land can be earmarked for expropriation without compensation, should I not be worried about my holiday home or my investment properties?
   
   a. From Section 12, land may only be earmarked if it is intended to redress wrongs from the past. This would surely, imply, only land which was taken by force during the apartheid regime.
   
   b. To the degree that this assumption is wrong, bear in mind that according to the Davis Report, a report that was issued in 2018, under the leadership of Judge Denis Davis, to report on various taxation issues, in the year leading up to March 2017, there were 105,977 dutiable transactions in the various Deeds Offices throughout SA. This yielded R8.7 billion in revenue for the fiscus. 
   
   c. To answer this question: Do you really think Government will take away holiday homes to redress wrongs of the past if it means throwing away millions, if not billions of rands, in transfer duty revenue?
   
   d. Not to mention that it will scare away investors local and abroad in a heartbeat - and get President Trump even more excited! And we don’t want that, do we?
    
8. Conclusion
   
   To put an end to the tired question, “Will we not end up like Zimbabwe?” We would have seen it long ago, if that were the case. And in any event, we have a Constitution, and not just “any old” Constitution. Our Constitution, and our Constitutional Court, have been hailed by legal experts across the globe, as being amongst the most progressive, the world has ever seen despite being barely 30 years old.  
   
   As such, the SA Government cannot just “grab” anyone’s land in South Africa as Mr Trump and the media seem to believe. Such statements are utter nonsense and above all, ill-advised. 
   
   It is business as normal ladies and gentlemen. Go buy that dream house now, and stop fretting.