Key legal consequences of expropriation of land without compensation

Abstract

There is an urgent need and constitutional imperative to expedite land reform in South Africa to maintain peace and stability. Against this backdrop, the Presidential Advisory Panel on Land Reform and Agriculture ("the Panel"), in its Final Report dated 4 May 2019, gave input on a proposed constitutional amendment that would permit expropriation of land without compensation ("EWC") to take place in South Africa. Taking the Panel's work into account, Parliament then gazetted a Bill setting out proposed amendments to section 25 of the Constitution of the Republic of South Africa, 1996 ("the Constitution"). Significantly, the proposed Bill contemplates the first ever amendments to the Bill of Rights in the Constitution since the dawn of democracy in South Africa. Although the proposed Bill and its associated draft, enabling legislation have put in motion the process to introduce EWC in South Africa, it is uncertain what the key legal consequences of doing so will be. It is particularly uncertain what the key legal consequences of introducing EWC in South Africa will be in light of the impact of the COVID-19 pandemic on South Africa's economy. This dissertation addresses what some of the key legal consequences of EWC will be. It highlights the myriad of procedural and substantive constitutional legal challenges that await the proposed Bill and its associated enabling legislation. It then analyses the impact of EWC on common law property rights and the law of contract before addressing the impact of EWC on lenders and borrowers where a mortgaged property is the target of an EWC process. Finally, this dissertation addresses the potentially significant and unintended tax consequences that EWC will have on taxpayers and the fiscus and which may, in fact, benefit some of South Africa's wealthiest land owners.