UNDERSTANDING THE NEW EXPROPRIATION BILL 2008 A guide

UNDERSTANDING THE NEW EXPROPRIATION BILL: 2008 A guide to the Bill Portfolio Comm on Public Works : 26 March 2008

Background • Cabinet decision: 16 May 2007 • Gazetted Policy discussion document: 13 November 2007 • Received written submissions, until January 2008 • Two national workshops(11 and 15 February 08) • 11 February workshop was a public sector workshop and included, three tiers of govt and several parastatals with expropriating powers. • 15 February workshop was a general public workshop and it included farmers Association, Agri-SA, property groups, political parties, community based organisations • Table the Bill before Cabinet and approved: 5 March 2008 Portfolio Comm on Public Works : 26 March 2008

Structure of the Bill • • • • The Preamble Definitions Powers of the Minister Expropriation on behalf of juristic persons Delegation of powers by the Minister Investigation and valuation of property Taking the decision to expropriate Notice to expropriate Vesting of property on the expropriating authority Consequences of expropriation of unregistered rights Basis for determining compensation, including the Board Approval of compensation by a court Withdrawal of compensation Impact on other legislation Portfolio Comm on Public Works : 26 March 2008

The Preamble • Values of the Constitution • Social justice • Right of the state to expropriate in the public interest and for public purposes, subject to payment of just and equitable compensation Portfolio Comm on Public Works : 26 March 2008

Powers of the Minister • The Minister has the power to expropriate on behalf of ü The State ü Individuals ü Juristic persons Portfolio Comm on Public Works : 26 March 2008

Investigation before an expropriation • Before deciding, investigate: Ø Unregistered rights Ø Impact of the expropriation on future plans, including town planning • The Bill establishes an Expropriation Advisory Board operating at national and regional level primary to advise Expropriating authorities on all aspects of expropriation • The Minster may call upon the Board to furnish relevant information, such as: Ø Ø Ø Unregistered rights History of the property State investment Market value Current use of the property Suitability of the property for the expropriation purpose Portfolio Comm on Public Works : 26 March 2008

Delegation • Powers may be delegated to: Ø DDG: powers in s 3 and 4 • Powers to withdraw an expropriation may not be delegated Portfolio Comm on Public Works : 26 March 2008

Taking the decision (s 11) • Publish and serve a notice to that effect • Notice ought to be served on Regional Land Claims Commission and the Municipality • The notice must contain: ØNotice that the property will be expropriated ØThe amount offered as compensation ØAn opportunity to make representations within 21 days of the notice Portfolio Comm on Public Works : 26 March 2008

Negotiation and urgent expropriations • On receipt of representations, attempt to reach agreement with the owner of the property and holders of unregistered rights • Urgent expropriations by the Minister: only where: ØIt is reasonable and justifiable in the view of the authority ØActing on the advice of the Board Portfolio Comm on Public Works : 26 March 2008

Expropriation Advisory Board • Shall consist of the chairperson, deputy and other members as determined by the Minister • The Board shall also have a Secretariat to be accountable to the Department • DPW shall maintain a register of all expropriations either contemplated, finalised or withdrawn Portfolio Comm on Public Works : 26 March 2008

Notice of expropriation (s 12) • Notice must be served on: ØRegistrar of deeds ØOwner and holders of unregistered rights • Notice must include an offer of compensation, and must state clearly the basis for the determination of compensation Portfolio Comm on Public Works : 26 March 2008

Vesting of property on the authority (s 13) • Property vests on the state as follows: ØMortgaged: when the “owner” is released from the mortgage ØOther property, on an agreed date or on the date in the notice Portfolio Comm on Public Works : 26 March 2008

Holders of unregistered rights (s 14) • They are entitled to compensation • Notice must be served on them • They must be offered compensation when the property is expropriated Portfolio Comm on Public Works : 26 March 2008

Basis for determination of compensation • Decided by the expropriating authority on the basis of the advise by the Expropriating Advisory Board • Must be just and equitable and reflect an equitable balance between the interests of those affected and the public interest • All relevant factors, including the following, must be considered: ü See section 25(3) of the Constitution ü No preference should be given to market value Portfolio Comm on Public Works : 26 March 2008

Compensation • When determining compensation, no account must be taken of: ØImprovements done in order to secure a higher amount of compensation ØAnything done with the object of increasing the value of the property in order to gain therefore • Interest shall be paid on compensation money Portfolio Comm on Public Works : 26 March 2008

Claims for compensation (s 17) • A person who receives notice of expropriation may serve a notice to claim compensation • Such notice must contain relevant explanation on how she or her arrived at her or his claim • The authority may deliver a statement explaining whether the amount claimed will be paid and if not, the reasons therefore (s 14) • Parties may negotiate on the amount and may request particulars from each other (s 15) • Where there is no agreement, the expropriating authority must issue a final determination on the amount Portfolio Comm on Public Works : 26 March 2008

Payment of compensation (s 20) • Amount is due and payable on the date of the agreement or the date determined by the expropriating authority • Payment may be made to the owner, the holder or the Master where the owner cannot be identified, such as an absentee landlord Portfolio Comm on Public Works : 26 March 2008

Mortgaged property • Compensation may not be paid, without agreement between buyer, mortgagee and claimant • Absence of an agreement, any party may approach the court for an order determining the rights of the parties Portfolio Comm on Public Works : 26 March 2008

Municipal rates (s 22) • On receipt of the notice to expropriate, the municipality must inform the expropriating authority of any rates which are outstanding in respect of a property • Expropriating authority will be responsible to pay the rates, deducting from the compensation money • If the municipality fails to inform the expropriating authority of the rates, the owner will continue being liable for the rates Portfolio Comm on Public Works : 26 March 2008

Deposit of compensation with the Master (s 23) • The money may be paid to the master where: ØA court interdict states so ØThe owner cannot be ascertained • The expropriating authority will not be liable where the money is paid to the Master Portfolio Comm on Public Works : 26 March 2008

Approval of compensation by a court (s 24) • Where there is no agreement, a court by way of review proceedings, shall pronounce on the compensation • Test used by the court will be that set out in PAJA. In other words, a review of the Minister’s decision will be process driven and not necessarily amount to a reconsideration of the decision on the merits Portfolio Comm on Public Works : 26 March 2008

Withdrawal of compensation (s 25) • Minister shall have the power to withdraw where the public interest or public purpose so require Portfolio Comm on Public Works : 26 March 2008

Repeal of laws • The Expropriation Act, 1975, including its amendments • The Land Affairs Act, 1987, including its amendments Portfolio Comm on Public Works : 26 March 2008

End Portfolio Comm on Public Works : 26 March 2008