Clarifying South Africa’s new Expropriation Act: What property owners need to know

• South Africa’s new Expropriation Act ensures property owners are not at risk of expropriation without compensation, with strict conditions and processes.
• The Act is procedural, not the "Expropriation Without Compensation Act," and outlines clear guidelines for expropriation, aligning with constitutional principles.
• Expropriation laws are common worldwide; the Act guarantees fair compensation, legal challenges, and protection for owners, ensuring equity and transparency.

South Africa's new Expropriation Act, signed into law by President Cyril Ramaphosa, has raised concerns among property owners. However, Berry Everitt, CEO of the Chas Everitt International property group, seeks to clarify the misconceptions surrounding the Act. He reassures property owners that the Act does not expose residential or commercial property owners to the risk of having their properties expropriated without compensation.

Everitt emphasizes that the fear of state expropriation without compensation, sparked by poorly informed commentary, is unfounded. The Expropriation Act sets very specific conditions that must be met for expropriation to take place. The process includes determining “fair and equitable” compensation (Section 5), negotiating with the property owner, and resolving disputes, with the final decision resting in the courts, not with the Minister of Public Works and Infrastructure. This structure is intended to ensure that compensation is just and that any expropriation follows a clear and fair procedure.

The Act, Everitt explains, will not increase the likelihood of expropriation without compensation, but rather may limit it. The Act specifically allows the expropriation of unused or underutilized land in rare cases, such as when the state can prove that the landowner does not use, intend to develop, or plan to generate income from the land. These rare instances are outlined in Section 12(3) of the Act.

Another key point Everitt highlights is that the Expropriation Act is not the “Expropriation Without Compensation Act” as some may believe. It is procedural legislation designed to guide the implementation of expropriation within the framework of the existing constitutional provision. The Act establishes the procedures for expropriation, which are necessary to uphold the constitutional principle of expropriation for public purposes. It is about setting the “how” of expropriation, not the “what.”

Everitt also stresses that expropriation laws are common worldwide, with most countries enabling the state to acquire private property for public purposes such as infrastructure development, provided the owners are compensated. What distinguishes South Africa’s approach is the provision for expropriation in the public interest, as stated in Section 25(a) of the Constitution. While this term has raised concerns in the past, the new Act ensures that all expropriations—whether for public purpose or public interest—are subject to the same set of rules and legal challenges.

The Expropriation Act requires that the expropriating authority must thoroughly assess all relevant factors before expropriating property, including its suitability for the intended purpose, any registered and unregistered rights associated with it, and its impact on local municipal plans. The Act aims to provide a fair and transparent process for property owners, ensuring that their rights are protected.

Despite the strong reactions to the legislation, Everitt concludes that the Expropriation Act should reassure property owners and investors. He argues that the law strengthens the protection of property rights and affirms that South Africa’s Constitution safeguards the interests of property owners from arbitrary expropriations without compensation.

While the date for implementation of the Expropriation Act has yet to be determined, it is clear that the Act is a procedural safeguard designed to ensure fairness and transparency in any expropriation process, offering protection to property owners.

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