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Big changes South African property-owners need to watch out for in 2017

Big changes South African property-owners need to watch out for in 2017

There are a few significant changes on the cards for the South African property sector in 2017.

While many of the proposals bring welcome amendments, legal analysts and real estate agents have noted that some of the changes coming into force this year won’t necessarily be welcomed by all involved.

Real-estate group, Just Property, and Cor Van Deventer, director of law firm Greyvensteins lay out what property owners can expect:

The Expropriation Bill

Van Deventer has raised concerns about how the current definition of “property” in the bill is wide open to interpretation, in that it could include residential and commercial property, other movable property, as well as intangible property such as intellectual rights.

“In addition, as compared to the Expropriation Act of 1975, which only makes provision for expropriation for public purposes, the new Bill goes a step further by including ‘public purpose’ and ‘public interest’ definitions,” said Van Deventer.

“The new version of the Bill opens the door for expropriation of land for people who would like to undertake economic developments, such as low-income housing ‒ in fact, it encourages it,” said Van Deventer.

Office of the Valuer-General

House cost buying home

According to previous expropriation laws, when government expropriated land for roads, farmland or electricity usage, it was on the ‘willing seller, able buyer’ principle – where, if owners did not really want to sell, they didn’t have to, said Van Deventer.

With the establishment of the Office of the Valuer-General, the government can now expropriate property and pay out what the valuators have determined the price of the property to be. This amount will be will be based on market value.

To be considered will also be the property’s history of acquisition, current use and the purpose of expropriation.

The Promotion of Protection of Investment Bill

This bill stems from a court case in which foreign investors challenged the South African policy of Black Economic Empowerment (BEE) in international arbitration.

“According to this Act, government may take measures, in accordance with the Constitution and legislation, to redress historical inequalities, uphold the values and principles of the Constitution, foster economic development and protect the environment,” said Van Deventer.

“In its first draft, the Bill did not allow for international arbitration. It has tried to downplay concerns by stating that international arbitration may be resorted to, only if such arbitration is consented to by government and only once all domestic remedies have been exhausted.”

Bilateral investment treaties

“This Act makes provision that foreign investors will not be treated less favourably than South African investors, taking into account that the majority of BITs were entered into before our Constitution came into effect,” explained Van Deventer.

The investment security provision also states that foreign investors will get the same level of security as domestic investors, but this is subject to the state’s available resources and capacity.

“It is clear that the Act protects South African interests above those of foreign companies. Proponents of this Act argue that it is in keeping with international trends, but other countries that have cancelled BITs, like Australia and Canada, have vastly different economic environments to ours,” he said.

Read: The metros where South Africa’s first-time buyers are choosing to live

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  • Ubaba meet Baba

    It’s quite simple, without property rights, you don’t have a state.

  • Jacobus Pienaars

    “government may take measures, in accordance with the Constitution and legislation, to redress historical inequalities, uphold the values and principles of the Constitution, foster economic development and protect the environment” – I wonder is that one was used by minister Oyster Box.

  • Jennifer

    Its important to protect citizens. All countries put their citizens first. A friend bought a property in Europe, he does not have EU passport/citizenship, certain properties were reserved for EU citizens only and when he did finally find a property he could buy he still had to first get permission from the local municipality to buy because he is not an EU citizen and his criminal record were checked.

  • Tiaan van Dyk

    Bogemelde berig is grootliks korrek behalwe in een opsig. Die bewering dat die Waardeerder-Generaal die prys op markwaarde baseer is nie korrek nie.

    Die prys word bepaal ingevolge Art 25(3) van die grondwet – 5 kriteria – waarvan markwaarde net een kriteria is. Daar word nie meer gewig toegeken aan markwaarde as aan die ander vier kriteria nie.

    Die staat kan ook die “tydstip” en “metode van betaling” bepaal – art 25 van die grondwet. Dit laat die deur oop vir latere betaling en nie noodwendig in geldwaarde nie.

    Sien ook die res van Art 25 van die grondwet:
    ‘n Verdere kommerwekkende vraag is wie die “openbare belang” gaan bepaal (onderskei van “openbare doel”). Byvoorbeeld:- as daar betogings is oor dienslewering van water kan dit ge-interpreteer word dat dit in “openbare belang” is om iemand se voorraad waterpype en toerusting te onteien.
    (Onthou dat “onteiening” beteken dat eiendomsreg dadelik kan oorgaan en die onteiende eienaar moet later gaan veg vir sy vergoeding – dit is een van die verskille tussen die huidige/ ou onteieningswet en die be-oogde nuwe onteieningswet.)
    Sien ook die saak van Agri-SA vs die minister van minerale – daarin is onderskeid gemaak tussen “onteiening” en “ontneming” – sien art 25 (1) 7 art 25 (2) van die grondwet.
    Hoewel die argument meer ingewikkeld is kom dit basies daarop neer dat dit “onteiening” plaasvind indien die persoon wat die goedere neem (onteien) die eienaar word. As die persoon wat die goedere onteien /neem NIE eienaar word nie, maar iemand anders as die persoon wat die goedere neem word eienaar, dan is dit “ontneming” (- “dispossession”) en nie onteiening nie. Dit hang saam met die begrip van die staat is die “voog”.
    Wat is die effek daarvan? By “onteiening” is vergoeding betaalbaar en by “ontneming” is GEEN vergoeding betaalbaar nie! En dit is hoekom baie voormalige mineraalreghouers hul minerale en aanverwante regte (soos tantieme) verloor het en geen vergoeding daarvoor gekry het nie.
    Dieselfde “ontnemings”-beginsel is gebruik om water te “ontneem” en word nou ook in toekomstige wetgewing ingebou. Die volgende wat “ontneem ” gaan word is waarskynlik om landbougrond en nie net landbougrond wat een of ander eis op het nie..
    Tiaan van Dyk (prokureur) – 012 004 0628

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