Expropriation Without Compensation: The Law (In a Nutshell)

Expropriation without compensation ("EWC") has been one of the most debated legal and political issues in South Africa over the past decade, generating strong views both for and against the concept.

This article summarises the current legal position as objectively as possible, including the relevant constitutional provisions, the Expropriation Act 13 of 2024, and the current legal challenges to the legislation.

The Constitutional Framework

Section 25 of the Constitution protects property rights while establishing the constitutional framework for land reform. It provides that property may not be arbitrarily deprived and may be expropriated only in terms of a law of general application, for a public purpose or in the public interest, and subject to just and equitable compensation, agreed by the parties or determined by a court.

Such compensation must reflect an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including the property's current use, acquisition history, market value, the extent of direct state investment or subsidy, and the purpose of the expropriation.

The Constitution also provides that "public interest" includes the nation's commitment to land reform and that "property" is not limited to land.

Section 25 further requires the State, within its available resources, to take reasonable legislative and other measures to promote equitable access to land. It also provides for legally secure tenure or comparable redress where land rights are insecure because of past racially discriminatory laws or practices, and for restitution of, or equitable redress for, property dispossessed after 19 June 1913 as a result of such laws or practices.

Section 26 of the Constitution guarantees the right of access to adequate housing and provides that no person may be evicted from their home or have their home demolished without a court order granted after considering all the relevant circumstances. It also prohibits legislation permitting arbitrary evictions.

In 2021, Parliament considered, but ultimately rejected, a constitutional amendment that would have expressly authorised expropriation without compensation. Accordingly, section 25 remains unchanged, and the constitutional requirement of just and equitable compensation continues to apply.

The Expropriation Act

The Expropriation Act 13 of 2024 was signed into law on 23 January 2025. It repealed the Expropriation Act 63 of 1975 and establishes the legislative framework governing how organs of state may expropriate property for a public purpose or in the public interest.

The following is a practical summary of the Act and its key provisions.

Application of the Act:

The Act expressly prohibits arbitrary expropriation. Except in cases of urgent temporary use under section 20, an expropriating authority must first make a reasonable attempt to acquire the property by agreement before resorting to expropriation. The Act also provides for the temporary use of property in urgent circumstances.

Powers of the Minister:

The Minister of Public Works and Infrastructure may expropriate property for a public purpose or in the public interest, including on behalf of an organ of state that does not itself have expropriation powers. This includes property required for government accommodation, land and infrastructure.

Broadly, a public purpose refers to the use of property for government or public functions, such as roads, schools, hospitals or other public infrastructure, whereas public interest is wider and includes land reform.

Where only part of a property is required, the Minister may, at the owner's request, expropriate the entire property if leaving the remainder would materially impair its use or value. Where the Minister acts on behalf of another organ of state, ownership and possession vest in that organ of state, which is responsible for the associated costs.

Property Investigation and Valuation:

Before deciding whether to expropriate property, the expropriating authority (being the organ of state authorised to expropriate property) must investigate whether the property is suitable for the intended purpose, identify all registered and unregistered rights affecting it, and determine an offer of just and equitable compensation.

Suitably qualified persons may inspect and value the property only with the owner's or occupier's written consent or, failing that, under a court order.

Any damage caused during the investigation must be repaired or compensated for, and the investigation must comply with applicable privacy and information protection laws.

Intention to Expropriate:

Before property may be expropriated, the expropriating authority must serve a notice of intention to expropriate on the owner, mortgagee and known rights holders, and publish the notice.

The notice must explain the proposed expropriation, identify the property, state the public purpose or public interest served, provide the reasons for selecting that property, specify the proposed dates of expropriation and possession, set out the proposed compensation and how it was calculated, identify the empowering legislation, and invite affected persons to lodge objections or submissions within 30 days.

Recipients must, within 30 days, indicate whether they accept or dispute the proposed compensation (or request further particulars), disclose any additional rights holders of whom they are aware, and, in the case of land, provide details of any unregistered lessees, purchasers or builders holding a lien.

The expropriating authority is required to consider all objections, submissions and responses before deciding whether to proceed. If it elects to proceed, compensation must either be agreed upon or determined by a court where necessary, after which a formal notice of expropriation may be issued. If it decides not to proceed, it must notify affected parties in writing and publish that decision.

Notice of Expropriation:

If the expropriating authority decides to proceed, it must serve a notice of expropriation on the owner, mortgagee and affected rights holders in their preferred language and publish the notice. The notice must identify the property, state the purpose and reasons for the expropriation, specify the dates on which ownership and possession will pass, identify the empowering legislation, and record the compensation agreed upon or determined by a court. It must also be accompanied by supporting documents explaining how the compensation was calculated, when it will be paid, and, where applicable, plans identifying the affected land or rights.

If the property is land, the owner is required, upon request, to provide the title deed (or details of the person holding it), and any person in possession of the title deed must produce it within the prescribed period.

Vesting and Possession:

Upon expropriation, ownership of the property generally vests in the expropriating authority (or the person on whose behalf the property is expropriated) on the date specified in the notice of expropriation. The authority only takes possession of the property on the date stated in the notice (or another agreed date), meaning that ownership and possession do not necessarily pass simultaneously.

Until possession passes, the expropriated owner or rights holder is generally entitled to continue using the property and to receive any income derived from it, but remains responsible for maintaining the property and for municipal rates, taxes, levies and normal operating costs. The expropriating authority may recover any loss in value caused by a failure to maintain the property, but must reimburse the owner for necessary maintenance costs incurred after the date of expropriation.

Registered rights in favour of third parties (other than mortgages) generally remain in force unless separately expropriated, and the date of expropriation may not precede service of the notice of expropriation.

Unregistered Rights:

The Act protects persons who hold unregistered rights (legal rights in property that are not recorded in a public register, such as certain leases or other personal rights). If such a person was not given notice of the expropriation or has not been compensated, they may submit evidence of their right and claim compensation.

If the claim is accepted, the expropriating authority must notify the rights holder of the expropriation, provide the relevant documentation, and compensate them in accordance with the Act. Where the rights holder is a lessee, rental remains payable to the former owner until possession passes to the expropriating authority, and thereafter, where applicable, to the expropriating authority.

An owner or rights holder who knew of an unregistered right but failed to disclose it may be held liable to the expropriating authority for any additional compensation it is later required to pay as a result of that non-disclosure.

Compensation:

The starting point under both the Constitution and the Act is that compensation for expropriated property must be "just and equitable", reflecting an equitable balance between the public interest and the interests of those affected. In determining what is just and equitable, all relevant circumstances must be considered, including the property's current use, its acquisition and use history, its market value, the extent of direct state investment or subsidy, and the purpose of the expropriation. The Act also identifies factors that should generally not influence compensation, such as unlawful improvements to the property's value, improvements made after notice of expropriation, or changes in value attributable to the proposed expropriation itself.

The Act further provides that nil compensation may, in limited circumstances, be just and equitable where land is expropriated in the public interest. Examples include abandoned land, land held purely for speculative purposes, certain unused state-owned land acquired without consideration, and land whose market value is equal to or less than the value of direct state investment or subsidy.

Importantly, these examples are not exhaustive, and nil compensation is not automatic. The Act provides only that nil compensation "may" be just and equitable, having regard to all the relevant circumstances. Whether those circumstances exist in any particular case will ultimately be determined in accordance with the Constitution and, where necessary, by the courts.

When making an offer of compensation for land, the expropriating authority must also take into account any outstanding municipal rates, taxes, levies and other charges relating to the property.

Compensation must be paid on the date and in the manner agreed by the parties or determined by a court. A dispute regarding the amount or timing of payment does not generally prevent ownership or possession from passing to the expropriating authority unless a court orders otherwise. If compensation is paid before the final amount is determined, any overpayment must be refunded with interest. Where VAT is payable, compensation will only be paid once the claimant has provided the required tax documentation and confirmed their tax compliance.

Where compensation cannot be paid directly - for example, because the person entitled to it cannot be identified or located, fails to provide the information required for payment, or there is a dispute or court order preventing payment - the expropriating authority may (and in some circumstances must) deposit the compensation with the Master of the High Court. The funds are then held in the Guardian's Fund, where they accrue interest until the person entitled to them is identified or a court directs how they are to be paid.

Interest:

Interest accrues on any outstanding compensation from the date the expropriating authority takes possession of the expropriated property until payment is made. The interest rate is linked to the rate prescribed under the Public Finance Management Act. However, interest does not accrue during any period in which the claimant has failed to comply with certain statutory requirements, and it ceases once the compensation has been paid, deposited or otherwise made available in accordance with the Act.

Mortgage Bonds and Deeds of Sale:

Where expropriated property is subject to a registered mortgage bond or a deed of sale, the Act regulates how compensation is paid, rather than who is ultimately entitled to it. The expropriating authority may not pay the compensation unless the owner and the mortgagee or purchaser have agreed how it is to be paid and have notified the authority of that agreement.

If no agreement is reached within the prescribed period, or if a dispute arises, the expropriating authority may deposit the compensation with the Master of the High Court, after which the parties may approach a court to determine how the compensation should be distributed.

Rates, Taxes, and Other Charges:

The Act regulates how outstanding municipal rates, taxes, municipal levies and other municipal charges are dealt with when compensation is paid. Where the municipality notifies the expropriating authority of outstanding amounts within the prescribed period, the authority must notify the owner and, if those amounts are not disputed within 20 days, may deduct them from the compensation and pay them directly to the municipality.

If the municipality fails to notify the expropriating authority of the outstanding charges within 30 days, the authority may pay the compensation without making any deduction and is not liable for those outstanding amounts. The owner, however, remains personally liable to the municipality for those charges until possession of the property passes to the expropriating authority.

These provisions apply specifically to municipal charges and do not expressly extend to homeowners' association, estate or similar private levies.

Dispute Resolution:

Where the expropriating authority and an affected party cannot agree on the amount, timing or manner of payment of compensation, they may first attempt to resolve the dispute through mediation. If no agreement is reached, either party may approach a competent court to determine or approve just and equitable compensation. The Act also preserves the right of any person to approach a court on any issue relating to the application of the Act.

Where the Act has not been complied with, the court may grant any order that is just and equitable, taking into account all relevant circumstances. Importantly, an appeal against a court's determination of compensation does not automatically suspend the expropriation. The expropriation may proceed unless a court grants an interim interdict based on compelling prospects of success on appeal.

Urgent Expropriation:

In cases of urgent public need, the Act permits an expropriating authority to temporarily use property without immediately expropriating ownership. This power is limited to situations such as disasters or other urgent and exceptional circumstances, generally where no suitable government-owned property is available, and may only be exercised for up to 12 months, subject to a court-approved extension of no more than 18 months in total.

Although certain procedural requirements may be shortened or modified because of the urgency, the owner or rights holder remains entitled to just and equitable compensation, and any disputes regarding compensation are determined in accordance with the ordinary provisions of the Act. The expropriating authority must also repair or compensate for any damage caused during the temporary use and may, if necessary, later commence formal expropriation proceedings in accordance with the Act.

Withdrawal of Expropriation:

An expropriating authority may withdraw an expropriation if it is in the public interest to do so or if the reason for the expropriation no longer exists. However, withdrawal is subject to important limitations.

After three months from the date of expropriation, it generally requires the written consent of the affected parties or the authorisation of a court. Withdrawal is also not permitted once the land has been registered in the expropriating authority's name or compensation has been paid, unless the necessary consents are obtained.

If an expropriation is validly withdrawn, ownership reverts to the original owner, any rights extinguished by the expropriation are restored, the relevant property registers must be corrected, and the expropriating authority is liable for the reasonable costs and damages resulting from the withdrawal.

Service and Publication of Documents:

The Act prescribes detailed procedures for the service, publication and language of notices and other documents. Notices must generally be served personally, by registered post and electronic mail, or, where the recipient cannot reasonably be located, by public notice. Certain notices must also be published in the Government Gazette, local newspapers, and, in the case of land, displayed prominently on the property. Where appropriate, additional publication by radio or television may be used.

The Act further requires documents to be provided in English and, where a person has requested it, in their preferred official language. Recipients are also entitled to request a translation of communications into another official language.

Extension of Time:

The Act allows the extension of certain time periods where there is good cause. An expropriating authority may extend time limits applicable to owners, rights holders, interested persons or other organs of state upon written request, and may also extend its own time periods where the affected parties agree or good cause exists. Examples of good cause include the need to obtain extensive documents or information, consult with other organs of state, or other circumstances making compliance within the original period unreasonable.

Any extension must be communicated in writing, stating its duration, the reasons for it, and, where applicable, drawing the recipient's attention to their right to approach a court.

Expropriation Register:

The Act requires the Director-General to establish and maintain a publicly accessible register recording all intended expropriations, completed expropriations, withdrawals of expropriations, and decisions not to proceed with proposed expropriations. All expropriating authorities are required to provide the relevant notices to the Department within 20 days to ensure that the register remains up to date.

Offences:

The Act distinguishes between civil breaches and criminal offences. An owner or rights holder who fails to comply with certain disclosure obligations under the Act - such as failing to identify known rights holders or provide required information about them - may be liable to a civil penalty imposed by a court. Such non-compliance is not a criminal offence.

By contrast, any person who wilfully provides false or misleading information in a document submitted under the Act commits a criminal offence and may, upon conviction, be fined or imprisoned for up to three years.

Regulations:

The Act empowers the Minister to make regulations necessary for its implementation, including regulations dealing with administrative procedures, prescribed forms and notices, and the maximum civil penalties that may be imposed.

The Act also provides that minor procedural defects will not automatically invalidate regulations, notices or decisions, provided the non-compliance is not material, does not prejudice any person, and is not procedurally unfair. Similarly, minor errors may be corrected without repeating the full statutory process where doing so does not materially affect anyone's rights or interests.

Competing Legislation:

The Act provides that other legislation authorising the expropriation of property must, where possible, be interpreted consistently with the Expropriation Act. References in other laws to compensation under the former Expropriation Act are to be understood as referring to the constitutional standard of just and equitable compensation and the provisions of this Act. Where there is any conflict between this Act and another law dealing with matters covered by it, the Expropriation Act prevails.

Constitutional Challenges

The Expropriation Act is currently the subject of constitutional challenges before the courts. Among others, the Democratic Alliance, AfriForum and the Institute of Race Relations have challenged various provisions of the Act, contending that they are inconsistent with section 25 of the Constitution and unlawfully permit expropriation without compensation.

At the time of writing, no court has ruled on the constitutionality of the Act, nor has any court authoritatively determined the circumstances in which nil compensation may be just and equitable. The outcome of these proceedings will play a significant role in determining how the Act is interpreted and applied in practice.

Conclusion

The Expropriation Act establishes a comprehensive legal framework governing the expropriation of property. It expands upon the constitutional framework by prescribing the procedures to be followed, the manner in which compensation is determined and paid, and the circumstances in which nil compensation may be considered. While the Act contains extensive procedural safeguards, several of its provisions remain the subject of constitutional challenge. Until the courts have determined those challenges, aspects of the Act's practical application will remain uncertain.

As matters stand, section 25 of the Constitution remains unchanged. Compensation must therefore continue to meet the constitutional standard of being just and equitable, and the constitutionality and practical application of the Expropriation Act will ultimately be determined by the courts.

Fraser Stockley

BCom Law; LLB

Partner at Le Roux Vivier Attorneys

Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the views of the firm. This content is provided for general information only and does not constitute legal advice. While every effort is made to ensure accuracy, the law may change and its application depends on the specific facts of each matter. Readers should seek professional legal advice before acting on any information contained herein. The firm and the author(s) accept no liability for any loss or damage arising from reliance on this content.