Call for Public Comment: Expropriation Bill, Bill 23 of 2020

Public participation is a well-established and critical process in South Africa’s legislative process. On Wednesday 2 December 2020, the Portfolio Committee on Public Works and Infrastructure officially invited stakeholders and interested parties to submit written submissions on the Expropriation Bill [B23 - 2020]. Written submissions are to be submitted to by no later than Wednesday,  10 February 2021.

19 Jan 2021 3 min read Dispute Resolution Alert Article

At a glance

  • Public participation is a critical process in South Africa's legislative process, specifically regarding the Expropriation Bill [B23 - 2020].
  • The Bill requires attention in several areas, including clarity and certainty in the circumstances for land expropriation, due service of notices to property owners in foreign jurisdictions, and the impact on financial institutions and mortgagees.
  • Concerns exist regarding the vague language in the Bill, lack of engagement with financial institutions as mortgagees, and the timing and process of transferring ownership of expropriated property.

As indicated in our Webinar held on 12 November 2020, the Expropriation Bill undertakes a significant mandate in an effort to achieve its goals of redress and equality in South Africa. With this being said, the importance of public comment to this Bill cannot be underrated.

This engagement process presents a vital opportunity for interested parties to have their voices heard and concerns considered by the appropriate legislative bodies. Furthermore, this engagement presents a dual purpose of facilitating equitable land reform while protecting property rights. The need for public participation is of particular importance given the legal, political and historical treatment of the Bill.

Presently, the Bill requires attention if it is to achieve its intended purpose and thus the call for public comment is of utmost importance. By way of high level summary and by no means an exhaustive list, the following areas are required to be addressed prior to the Bill’s enactment in order to allow for the proper implementation of the nation’s commitment to land reform, without infringing on an individual’s Constitutional rights:

  1. Section 12(3) of the Bill sets out the listed circumstances under which land can be expropriated for nil compensation. There are many aspects of this section that need to be addressed in order to provide clarity and certainty and to avoid the arbitrary deprivation of citizen’s right to property. The use of the words “including, but not limited to” is unacceptable and should be deleted. This phrase opens the flood gates to a plethora of bases on which land can be expropriated and can lead to abuse.
  2. One area requiring clear attention is the absence of the process of due service of relevant notices to property owners residing in foreign jurisdictions. This presents clear practical and substantive limitations of the Bill.
  3. The Bill leaves further uncertainty regarding the impact on financial institutions, particularly in their role as the mortgagee to a property intended to be expropriated. While section 18 of the Bill attempts to provide direction regarding a property to be expropriated which is subject to a mortgage – the Bill leaves much to be desired regarding the position of mortgagees.

    What we would like to see is a clear definition of a financial institution as a right holder insofar as the encumbered property is concerned. Due consultation should be held with the financial institutions as mortgagees during the process of expropriation - whilst currently there is no clear obligation on the expropriating authority to engage with financial institutions as mortgagees prior to the contemplation of compensation for the property to be expropriated.

    Another related aspect that is required to be addressed is the date on which a bond is to be cancelled once expropriation occurs, and the practical considerations relating to the bond cancellation in the Deeds Office and the termination of the obligations to a mortgagee in this regard.
  4. According to the present Bill, ownership of the expropriated property vests in the State, or the person on whose behalf the State caused such expropriation, on the date recorded in the notice of expropriation. In the result, transfer of ownership according to the current version of the Bill passes prior to registration in the Deeds Office.

This raises many substantive, legal and practical concerns (specifically taking into account the Alienation of Land Act and Deeds Registries Act) and as such is required to be dealt with should the Bill meet its objectives whilst escaping undue technical hurdles.

Whilst the Bill attempts to protect individuals’ Constitutional rights while implementing its objectives in historical redress, there are areas within the Bill which have glaring issues and will ultimately be problematic should consideration not be had to these issues.

Should you require any further details regarding the process and substance of such submissions, please contact us for more information.

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