Fears around government’s ‘unlimited’ power over property rights

The opposition Democratic Alliance has outlined its concerns around the Expropriation Bill which is open for public comment until the end of February of 2021.

The DA said that the bill contains sections that could disenfranchise owners of all types of property in South Africa, not just landowners or farmers. It added that it was concerned about the following issues:

  • The bill has a list of five circumstances under which zero compensation could be paid, with clear indications that the list could be extended without restriction at government’s will;
  • In its current form it offers government near unlimited powers to simply expropriate personal property – the bill even going so far as to allude to intangible property which could include copyrighted and patented property;
  • The bill lacks clear definition in a number of areas and provides very little in terms of oversight opportunity by experts to ensure fairness to ordinary South Africans.

“This bill will clearly and severely impact property rights and cannot be entrusted in its present form to a corrupt government,” the DA said.

It also criticised government for not giving members of the public enough warning time to comment on the bill.

“Worryingly, it appears as if the government is not as committed to the principle of participative democracy as it should be, despite the huge impact this bill will have on our Constitutional right to own property if it is enacted,” it said.

“While the print advertisements requesting submissions on the bill were published on 10 December 2020, social media posts only went out on 29 January 2021. And, almost two months into the public participation process, a media plan has still not been finalised.”

Questions around foreign owners

Law firm Cliffe Dekker Hofmeyr says that the bill has caused controversy, uncertainty and confusion regarding the impact it will have on South African and foreign property owners alike.

The introduction of ‘expropriation without compensation’ has caused the bulk of the debate, especially with the law’s current approach to the reading of section 25 of the Constitution – preventing the arbitrary deprivation of property and allowing for expropriation subject to just and equitable compensation, it said

The firm has drawn specific attention to the issue of foreign-owned property in the country and the fact that the bill does not make any specific accommodation of international investors.

Given this silence, it is presumed that such property will be treated in the same manner as locally owned property, the firm said.

“Any preference given to foreign owners (or local owners for that matter) may constitute unfair discrimination based on nationality, which would be clearly unconstitutional.

“Despite the need for equal treatment between foreign and local property owners, the Bill is silent on how service of necessary documentation and publication for that matter is to be effected in respect of foreign-owned property targeted for expropriation.

The absence of a protocol for notifying foreign owners of an intended expropriation presents a severe barrier to the requirement to actively participate with owners prior to any expropriation, said Cliffe Dekker Hofmeyr.

“In the absence of foreign property owners receiving notice of the expropriation, the expropriating authority runs the risk of acting arbitrarily and against public interest when expropriating foreign-owned property.

“As with other service-related matters regarding foreign parties, a rigorous service process for foreign-owned property that is targeted for expropriation can and must be developed to address these concerns.”

Cliffe Dekker Hofmeyr said that there is no doubt that the Expropriation Bill will cause grave concern among foreign investors.

However the legislature is required, especially to address the pushback it may encounter, to ensure it crosses the “t”s and dots the proverbial “i”s as far as procedure is concerned, it said.

“In light of the extensive public, political and legal scrutiny of the Expropriation Bill, the bill’s procedural and substantive provisions must be carefully interrogated.

“This will assist in ensuring constitutional compliance, while assisting the State to achieve the desired redress as well as affording adequate protection to private property owners.”

Read: What it costs to buy vs rent in South Africa right now

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Fears around government’s ‘unlimited’ power over property rights