President Cyril Ramaphosa’s recent assent to the Expropriation Act, 13 of 2024 (the “Act”) has sparked significant discussion about its implications for land ownership, economic stability, and legal protections in South Africa. The Act replaces the Expropriation Act, 63 of 1975, with the stated intention of aligning the country’s expropriation framework with section 25 of the Constitution. Although assented to on 23 January 2025, the Act will only come into force once proclaimed by the President in the Government Gazette, the date for which has not yet been provided.
Given the complexity and sensitivity of this issue, it is essential to approach it with a neutral and fact-based perspective, ensuring an accurate understanding of what the Act entails.
KEY FEATURES OF THE EXPROPRIATION ACT 2025
Expansion of Expropriation Grounds – The 1975 Act permitted expropriation only for public purpose, such as infrastructure projects. The new Act expands this scope to include public interest, which incorporates South Africa’s commitment to land reform and equitable access to land. This means expropriation is no longer limited to projects such as roads, public schools, or public hospitals but now includes redistributive measures.
Introduction of Just and Equitable Compensation – Under the 1975 Act, compensation was determined strictly by market value, often making expropriation financially burdensome for the state. The Act introduces the concept of just and equitable compensation, as provided for in Constitution, requiring the consideration of –
- the current use of the property;
- the history of acquisition;
- the extent of direct state investment or subsidy; and
- the public interest served by the expropriation.
The Act does allow for nil compensation in very specific circumstances, including where –
- the land is abandoned or unused;
- the land is held purely for speculative purposes;
- the land is currently held by an organ of state, is not being used for a core function, and was previously acquired by the state without compensation; and
- the land’s market value is less than the value of direct state investment in improvements.
Enhanced Procedural Safeguards – The new Act reinforces procedural safeguards to protect landowners by introducing –
- mandatory negotiations between the state and property owners before expropriation proceedings commence;
- formal notifications detailing the reasons for expropriation and the proposed compensation; and
- recourse to the courts, ensuring disputes over compensation or legality of expropriation can be adjudicated before final expropriation takes place.
Increased Judicial Oversight –Courts play a more active role in reviewing expropriation decisions to ensure compliance with constitutional principles. Property owners have the right to challenge expropriation orders and compensation decisions in court, reinforcing the rule of law and due process.
KEY DEBATES SURROUNDING THE ACT
Misconceptions around Nil Compensation – One of the most contentious aspects of the Act is the inclusion of nil compensation under specific conditions. It is important to note that –
- compensation remains the default requirement. The Act does not permit expropriation without compensation as a general rule; and
- nil compensation is strictly limited to rare scenarios where it is deemed just and equitable, in line with constitutional guidelines.
Application Beyond Rural Land – The Act applies to all types of property, not just agricultural land. This includes urban land, commercial properties, and other forms of real estate. Consequently, businesses and investors must be aware of how the Act may impact property transactions and investment strategies.
Legal Challenges and Constitutional Concerns – The Democratic Alliance and other organisations have announced legal challenges against the Act, arguing that –
- the adoption process did not fully comply with constitutional procedures;
- some provisions are vague and open to broad interpretation; and
- the introduction of nil compensation could amount to confiscation rather than expropriation.
Despite these concerns, the Act remains subject to judicial review, ensuring that any constitutional inconsistencies can be addressed through legal processes.
IMPLICATIONS FOR PROPERTY OWNERS AND BUSINESSES
The implementation of the Act will have far-reaching consequences for property owners, businesses, and the broader economy. Key considerations include –
- for Landowners: The need to understand their rights, compensation mechanisms, and legal recourse options;
- for Investors: The introduction of just and equitable compensation may affect land valuations and investment confidence; and
- for the State: The balancing act between land reform obligations and maintaining economic stability will be critical to the Act’s success.
UNDERSTANDING THE EXPROPRIATION ACT
The Act represents a landmark shift in property law, purporting to align South Africa’s expropriation framework with constitutional principles. While concerns remain, particularly regarding nil compensation and the broader implications for property rights, the Act also introduces stronger procedural safeguards and judicial oversight to protect landowners.
As legal challenges unfold and implementation progresses, stakeholders must stay informed, proactive, and engaged in shaping a fair and transparent land reform process. Businesses and individuals seeking legal clarity on how the Act affects them should seek expert legal counsel to navigate its complexities.
For tailored legal advice on expropriation, land rights, and compliance, Bishop Fraser is available to provide comprehensive legal support.
