Why South Africa’s New Land Expropriation Act Is Stirring Legal Controversy

South Africa’s newly signed Land Expropriation Act is under serious legal scrutiny, with experts questioning whether it aligns with the Constitution. President Cyril Ramaphosa signed the Act into law on 23 January 2025, but it has yet to come into effect—something that has not slowed the debate surrounding its implications.

At the heart of the controversy is a clause that allows for “nil compensation” under certain conditions, something not explicitly provided for in the Constitution. While proponents argue that the law follows the intention of Section 25 of the Constitution—which outlines the conditions under which property may be expropriated—critics fear it opens the door to unconstitutional land seizures.

What Does the New Law Say?

The Act replaces the outdated 1975 Expropriation Act and introduces clearer procedures for when and how the state can take property. It affirms that expropriation cannot be arbitrary and must be for a legitimate public purpose. However, it also introduces conditions under which zero compensation may be offered. These include:

• Land that is unused or held purely for speculative gain.

• State-owned land that is not essential for its functions.

• Land that has effectively been abandoned.

• Cases where public investment in the land equals or exceeds its market value.

According to legal experts at Cliffe Dekker Hofmeyr, this “nil compensation” provision is a major legal red flag.

Is It Constitutional?

Here lies the legal dilemma. The South African Constitution does not explicitly allow for expropriation without compensation, and previous efforts to amend it to do so failed in Parliament. The Constitution mandates that property rights cannot be violated arbitrarily and that expropriation must come with fair compensation.

This raises the question: Can the new Act’s “nil compensation” clause withstand constitutional challenge?

Legal experts say that only the courts can ultimately decide. “Whether the wording of ‘nil compensation’ versus, for example, ‘no compensation’ is sufficient to succeed against a constitutional challenge can only ultimately be determined by our court,” said Cliffe Dekker Hofmeyr.

Potential Upside: Better Processes and Mediation

Despite its controversy, the new Act isn’t all bad news. Legal analysts agree that it brings a more structured and less combative approach to land expropriation:

• Mediation is now required before court action, encouraging amicable resolutions.

• Strict timelines and procedural clarity are built into the law, including how bonds and securities are handled.

This new structure may help avoid drawn-out legal battles and provide clarity where the previous law lacked guidance.

Cities like Johannesburg have even signaled that they could use the Act to reclaim hijacked buildings, which are often unused or unsafe, and potentially qualify for expropriation with nil compensation.

Where to From Here?

While the Act introduces some promising reforms in the expropriation process, its constitutionality remains untested. Experts believe that only once cases are brought before the courts will South Africans fully understand the real-world impact of the new law.

Until then, uncertainty looms large. Property owners, investors, and legal professionals alike will be watching closely to see how the courts interpret the law—and whether it will stand the test of the Constitution.

{Source: BusinessTech}

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