UNDERSTANDING THE NEW EXPROPRIATION BILL:2008

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

2. 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

3. 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

4. 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

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

6. Investigation before an expropriation • Before deciding, investigate: • Unregistered rights • 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: • 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

7. Delegation • Powers may be delegated to: • DDG: powers in s3 and 4 • Powers to withdraw an expropriation may not be delegated Portfolio Comm on Public Works :26 March 2008

8. Taking the decision (s11) • 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: • Notice that the property will be expropriated • The amount offered as compensation • An opportunity to make representations within 21 days of the notice Portfolio Comm on Public Works :26 March 2008

9. 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: • It is reasonable and justifiable in the view of the authority • Acting on the advice of the Board Portfolio Comm on Public Works :26 March 2008

10. 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

11. Notice of expropriation (s12) • Notice must be served on: • Registrar of deeds • Owner 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

12. Vesting of property on the authority (s13) • Property vests on the state as follows: • Mortgaged: when the “owner” is released from the mortgage • Other property, on an agreed date or on the date in the notice Portfolio Comm on Public Works :26 March 2008

13. Holders of unregistered rights (s14) • 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

14. 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: • See section 25(3) of the Constitution • No preference should be given to market value Portfolio Comm on Public Works :26 March 2008

15. Compensation • When determining compensation, no account must be taken of: • Improvements done in order to secure a higher amount of compensation • Anything 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

16. Claims for compensation (s17) • 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 (s14) • Parties may negotiate on the amount and may request particulars from each other (s15) • Where there is no agreement, the expropriating authority must issue a final determination on the amount Portfolio Comm on Public Works :26 March 2008

17. Payment of compensation (s20) • 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

18. 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

19. Municipal rates (s22) • 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

20. Deposit of compensation with the Master (s23) • The money may be paid to the master where: • A court interdict states so • The 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

21. Approval of compensation by a court (s24) • 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

22. Withdrawal of compensation (s25) • Minister shall have the power to withdraw where the public interest or public purpose so require Portfolio Comm on Public Works :26 March 2008

23. 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

24. End Portfolio Comm on Public Works :26 March 2008