Thursday, September 20

Market value versus just and equitable compensation

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Legal precedents on issues relating to expropriated land are needed to ensure that “fair and equitable” compensation is paid, says DA leader Mmusi Maimane.

Legal precedents on issues relating to expropriated land are needed to ensure that “fair and equitable” compensation is paid. So says DA leader Mmusi Maimane who referred to the 2013 Mala Mala land claim.

He said the government paid R1 billion for the land, exhausting the entire budget for the year, and the matter should have been challenged in court. “We should have been much more aggressive by going to court and saying: ‘In the interest of justice, what would be the just and equitable price for that property?’”

He said jurisprudence was needed to ensure that land transfers occurred in a legal way. “Expropriation is not the debate. Any government in the world expropriates land. 

“The just and equitable question must be on the table. I think the simple ‘market based’ catch is not sufficient… “It must not be up to politicians. There must be good case law. 

“If the ‘just and equitable’ price for the Mala Mala land was, for example, R100, then so be it.” Responding to a panel discussion on the balancing act between just compensation and market value prices, Justice Zac Yacoob said section 25 of the constitution mentioned five factors on which compensation was based. 

These included: 

1. The current use of the property: If the property was not currently being used then less compensation would be paid than if it was being used to generate income. 

2. The history of the land use and acquisition of the property: This affects how much the property is worth to the person getting rid of it on a ‘just and equitable’ basis. Also, if the property was acquired, for example, 200 years ago, and now belongs to someone who has not used it in 30 to 40 years, then its value is less.

3. Market value is a factor taken into account.

4. The extent of direct state subsidy in the property: This has an impact on the price as if the government had been subsidising farmers who worked the land, then that must be considered as the state cannot be made to pay twice.

5. The purpose of the expropriation: If the land is being expropriated to build a road through it, then the case can be argued that the farmer who owns the land will also benefit from the road, so that could be just and equitable compensation. Yacoob said the government should, when looking to expropriate land, identify the property needed for a particular reconstructive purpose and then “bargain hard” with the owner for a good deal.

“If he gives you a good deal then take it. Do not go to court for the sake of it. If it is not a good deal then go to the Constitutional Court as quickly as possible and get an answer.” Deputy Minister of Public Works Jeremy Cronin emphasised that poor communities also had their land expropriated, for example, for a dam to be built on it. In these cases the price based on “just and equitable” compensation was “significantly larger” than the market value.

LAND GRABS: “There is huge popular pressure and we have to understand it, respond to it, and deal with it effectively through a rational, well-planned, democratic and constitutional system of land reform that is urgently needed.” – Deputy Minister of Public Works Jeremy Cronin Picture: Bongiwe Mchunu/African News Agency

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