Home / Expropriation Without Compensation / These are the 5 types of property that can be expropriated without compensation under a brand new Bill

These are the 5 types of property that can be expropriated without compensation under a brand new Bill

Posted on December 22 2018 by Gert Minnaar in Expropriation Without Compensation

  • The minister of public works published a new version of the Expropriation Bill for public comment on Friday morning.
  • It spells out exactly how expropriation – mostly with compensation – will work.
  • These are the five kinds of property the draft law specifies could justly be expropriated without compensation.

Public works minister Thulas Nxesi on Friday morning published a draft of the new Expropriation Bill, kicking off a 60-day comment period.

The draft law spells out in detail how expropriation – mostly with compensation – will work, detailing how valuation should be done, how disputes should be settled, and how money should be paid.

No property, including land, may be expropriated arbitrarily or for any reason other than the public interest, the law holds.

But the Expropriation Bill also specifically holds that “it may be just and equitable for nil compensation to be paid where land is expropriated in the public interest” – under certain circumstances.

  • These are the five kinds of property the new Expropriation Bill says could be subject to expropriation without compensation.

1. Abandoned property

It does not specifically refer to hijacked buildings in central business districts, but legal experts have previously speculated that such buildings would be easy targets for expropriation without compensation.

2. Property owned by the likes of Eskom and Transnet.

Not paying compensation could be just “where the land is owned by a state-owned corporation or other state-owned entity”, the Expropriation Bill says.

The more than 700 state entities in South Africa include many with extensive land holdings surrounding various facilities – including such urban gems as Eskom’s Megawatt Park headquarters north of Johannesburg,.

3. Land held for speculation

It may be equitable to pay nil compensation “where the land is held for purely speculative purposes”, the draft reads.

It does not specify how to differentiate between land snapped up for future development and land bought with the idea of flipping it for a profit.

4. Land into which the state has already invested more than its value

Expropriation without compensation could be done when the market value of the land is less than the value of “direct state investment or subsidy” spent either to buy it, or on capital improvements made.

There has been speculation that failed land reform projects, where government has heavily subsidised community farming projects, could be subject to expropriation and re-redistribution.

5. Farms with labour tenants – or perhaps just portions of such farms

Expropriation without compensation may be appropriate where “the land is occupied or used by a labour tenant”, the draft law says.

Labour tenants are defined as people who live or have the right to live on a farm, or in some cases those who had parents or grandparents who worked on a farm in return for living there. They also include some people who had the right to cropping or grazing.

The draft bill makes provision for partial expropriation, which could be used to expropriate only sections of farms, but also has a mechanism where those affected by partial expropriation can ask for the full property to be taken instead. 

  • Phillip de Wet on 21 December 2018 in Business Insider