14 August, 2018
Information Document on Expropriation
seems to be some confusion about expropriation and how it takes place. This information document is an attempt to
clarify some of this confusion.
25(2) of the Constitution regulates expropriation. This section provides as follows: "Property
may be expropriated only in terms of law of general application
(a) for a public purpose or in the
public interest; and
(b) subject to compensation, the
amount of which and the time and manner of payment of which have either been
agreed by those affected or decided or approved by a court."
25(3) governs the calculation of compensation where expropriation takes
place. Subsection 3 provides that both
the amount of compensation and the time and manner of payment should be just
and equitable. When compensation is
determined, the court should consider all relevant circumstances including the
current use of the property, the history of acquisition and use, the market
value, state subsidies and the purpose of the expropriation.
Expropriation Act, no 63 of 1975 determines the process of expropriation. The Act provides that property can be
expropriated for public purposes, provided
that compensation is paid to the owner.
the state decides to expropriate land, an expropriation notice must be served
on the owner, by either handing it to the owner or sending it by registered
post. The notice must contain a clear
description of the property, its size and situation. The date of expropriation must also appear on
is transferred to the state on the date of expropriation. The owner of the expropriated property is
obliged to maintain the property from the date of expropriation to the date
when the state takes possession of the property. The owner may continue to use the property
and get an income from it until the state takes possession. The owner should continue to pay taxes on the
property as well as other expenditures relating to the property until the state
takes possession of the property.
compensation is offered in the notice of expropriation. The owner must then indicate within 60 days
from the date of the expropriation notice whether he accepts the amount of
compensation offered. If he is not
satisfied with the offer, he should indicate the amount desired and how it is
calculated. If no compensation is
offered the owner should still indicate within 60 days the amount of
compensation desired for the property.
Details should be given of all improvements to the land as well as of
any leases over the property. The
Minister may request the owner to deliver his title deed to the Minister within
the owner requires an amount of compensation which is not acceptable to the
Minister, the Minister may offer a different amount. If the owner is not satisfied with the offer
he may, within a period indicated in the notice, apply to the Court for the
determination of compensation. Failure
to do so will be deemed as acceptance of the amount offered.
the parties do reach agreement over compensation, the Minister is obliged to
pay at least 80%of the amount to the owner on the day on which the state takes
possession of the property. If the land
is subject to a fideicommissum, the money should be paid into the Master of the
High Court's office.
no agreement can be reached, the High Court will determine the amount of
compensation. Any of the parties may
make an offer of settlement before the Court makes a ruling.
Determination of compensation
Act provides that the compensation paid may not be more than the amount which a
willing buyer would pay. An amount for
real financial loss which is the result of the expropriation may also be
awarded. If no market exists for the
specific property, then the improvements should at least be compensated for, or
an alternative method should be used to determine compensation.
Act also provides for a solatium. The
Constitution does however not provide for any solatium and as a result it is
possible that no solatium will be paid in future. Provision is also made for the payment of
interest at the rate specified by the Treasury Act.
following rules apply when an amount of compensation is determined:
- The fact that the property is
taken without the consent of the owner is not taken into account;
- The suitability of the
property for the specific purpose which the state needs it for, is not taken
- If the value of the property
was increased as a result of it being used for an illegal purpose, this increased
value will not be taken into account;
- Improvements effected after
the date of the expropriation notice will not be taken into account;
- Any increase or decrease in
the value of the property which is the result of the purpose for which it is expropriated,
or which is the result of the conduct of the state, will not be taken into
- Any advantage which the owner
will receive as a result of the expropriation will be taken into account.