Proposed Expropriation Bill
WHAT CHANGES HAVE BEEN MADE TO THE PROPOSED EXPROPRIATION BILL?
The Expropriation Bill 2020 (the Bill) was submitted to Parliament on 9 October 2020. It is set to replace the Expropriation Act of 1975 as that Act is inconsistent with the Constitution.
By way of background, the Bill:
1. is framework legislation that spells out clearly how and when expropriation can take place;
2. is a law of general application which applies to all three tiers of government, namely national, provincial and local;
3. outlines circumstances when it would be just and equitable for no compensation to be paid; and
4. has been drafted to be consistent with the Constitution as it currently stands.
Section 12(3) of the Bill has been amended regarding the circumstances that can lead to a nil compensation for property and now reads that:
“12(3) 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:
(a) 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 appreciation of its market value;
(b) 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;
(c) notwithstanding registration of ownership in terms of the Deeds Registration Act, 937 (Act No. 47 of 1937), where an owner has abandoned the land by failing to exercise control over it;
(d) 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; and
(e) when the nature or condition of the property poses a health, safety or physical risk to persons or to other property.”
A new section 12(4) has been inserted in the Bill which reads that:
“12(4) When a court or arbitrator determines the amount of compensation in terms of section 23 of the Land Reform (Labour Tenants) Act, 1996 (Act No. 3 of 1996), it may be just and equitable for nil compensation to be paid, having regard to all relevant circumstances.”
The effect of the updated Bill is that:
1. the circumstances have been updated as to when it would be just and equitable for no compensation to be paid; and
2. a court or arbitrator may determine it is just and equitable to pay nil compensation.
The end result is that the owner of a property may not receive any compensation for his or her property when expropriated by the State.
© D’AMICO INCORPORATED ATTORNEYS
REFERENCES AND SUGGESTED READING
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