White colonial land dispossession stretches back to the expansion of Dutch settlements in the Cape following the arrival of the Dutch East India Company in South Africa in 1652.
This displacement of the indigenous population led to wars with the colonial settlers.
Following the formation of the Union of South Africa in 1910, the practice of racial segregation continued. By the time the Native Land Act, (Act 27 of 1913) limiting ownership to specific areas for each racial group was enacted, there already existed spatial segregation through land dispossession. In the urban areas, segregation was driven by the Natives (Urban Areas) Act 21 of 1923 where local authorities set aside land for occupation by Africans in separate areas called locations. The Natives Trust and Land Act, 1936 (subsequently renamed the Development Trust and Land Act), paved the way for forced removal and the creation of racially segregated areas called Bantustans.
It extended the total percentage of land allocated to African reserves from 7% to 13.6%. The Natives Laws Amendment Act, 46 of 1937, prohibited the sale of land by whites to Africans in urban areas, except with the permission by government. The Group Areas Act, 1950, permitted government to create separate residential areas for each racial group and facilitated the destruction and removal of other communities when their areas were proclaimed as white.
In 1961, South Africa became a republic. However, the discriminatory practices continued with the Nationalist Government entrenching racism by preventing social integration, and continued indoctrination of the minority white population. Land tenure in the homelands (former Bantustans) was completely insecure as the allocation of the right to occupy land was at the pleasure of the local chief, and discriminated against females (patriarchal society).
Correcting past discriminatory acts
With the new democratic elections in South Africa, a Bill of Rights was entrenched in the Constitution of South Africa, Act 109 of 1996 (the Constitution), which was negotiated by all political parties in existence at the time. This Bill of Rights in relation to property (Section 25) provided for :
- In terms of s25(5) Government was enjoined to foster conditions to enable citizens to gain access to land on an equitable basis;
- In terms of s25(6) the Government was required to enact legislation to correct the past racially discriminatory acts that were in force, in relation to tenure which was insecure;
- In terms of s25(7) to provide restitution (or other equitable redress) to any person or community that was dispossessed of property after 19 June 1913 as a result of past discriminatory acts or practices; and
- In terms of s25(9), Parliament was instructed to enact the legislation referred to in section 6.
The legislation that flowed from the Bill of Rights was as follows:
Land Reform (Labour Tenants) Act, 3 of 1996 which provided for security of tenure of labour-tenants and those persons occupying or using land as a result of their association with labour tenants;
Interim Protection of Informal Land Rights Act, 31 of 1996 (IPILRA) provided temporary protection for people with insecure tenure to prevent them from losing their rights to land while land reform was being introduced. While this act, still in force, aims to protect the rights of undocumented owners and users, it largely overlooks individuals whose tenure on communal land is insecure;
Communal Property Associations Act, 28 of 1996 enabled community groups, called communal property associations, to acquire, hold and manage property;
Land Restitution
Extension of Security of Tenure Act, 62 of 1997 regulated the conditions on and circumstances under which the right of persons to reside on land could be terminated and to regulate the conditions and circumstances under which persons, whose right of residence had been terminated, could be evicted from land;
The Transformation of Certain Rural Areas Act 94 of 1998 provided for the transfer of certain land to municipalities and certain other legal entities, the removal of restrictions on the alienation of land and matters with regard to minerals;
The Government Immovable Asset Management Act, 19 of 2007 provided for a uniform framework for the management of an immovable asset held or used by a national or provincial department, ensuring the coordination of the use with the service delivery objectives and providing for the issuing of guidelines and minimum standards in respect of immovable asset management by a national or provincial department;
The Restitution of Land Rights Act, 22 of 1994 addressed the requirement of S25(7) of the Constitution and has subsequently been amended by the Restitution of Land Rights Amendment Act, 15 of 2014; and
The Property Valuation Act,17 of 2014 provided for the establishment of the Office of the Valuer-General for purposes of expediting land reform. The Valuer-General is also able to assist government departments with market valuation for purposes other than land reform.
Section 25(3) of the Constitution requires that, inter alia, the following factors be considered when determining compensation for expropriation:
- The current use of the property
- History of acquisition of property
- Market value of the property
- Extent of direct state investment and subsidy in acquisition / beneficial capital improvement
- Purpose of the expropriation
However, the Regulations to the Property Valuation Act appear to conflate Current Use with Current Use Value which had the effect of reducing the compensation payable. The formula required that both market value and current use value be determined and then averaged. This formula was not fully accepted by the landowners which resulted in the Land Restitution targets not being achieved. This formula was proposed to be revised, and a recommendation has been made to the Minister, who is currently considering this submission. It will in all probability be amended to hopefully deal with the challenges experienced in acquiring land for this purpose.
Tenure Rights existing in South Africa on Communal Land as categorised by the Office of the Valuer-General
Tenure rights in South Africa can arguably be grouped into 3 categories:
Formal Rights – surveyed and registered according to the formal land tenure system (Surveyor-General and Deeds Registry)
Less Formal Rights – Locally recognised, or allocated tenure rights that have not been incorporated into the formal land tenure system (upgraded)
Informal Rights – Locally recognised, or tenure rights allocated by Traditional Leadership or other individuals. These customary rights are found in rural villages within Traditional areas and communal lands held in trust for the community and owned by either the State or the Zulu King in KwaZulu-Natal (Ingonyama Trust land). The KwaZulu-Natal Ingonyama Trust Act, No. 3KZ of 1994 came into effect in April 1994 and, while being an act of the KwaZulu-Natal Legislative Assembly, it has now been given National status as it is now administered by the National Government.
Typical Settlement of Ingonyama Trust Land
Challenges with these Tenure Rights in South Africa
These rights often overlap, e.g. one person may have a formal right registered in the Deeds Office with another informal tenure right conferred by the Traditional Authority on the same property to another person.
Boundaries are also not always respected or adhered to in many instances with encroachments being common.
A common example of encroachments, Edendale AA
Often the less formal rights are not always clearly demarcated or surveyed. An exception to this are the Garden Lots in the former Transkei (Eastern Cape) where these lots were surveyed, and Quitrents were recorded manually in a register kept at the Umtata Deeds Office. The problem with this was that generally when the holder died, the estate remained unreported, and the Quitrent title was never updated.
Surveyed in 1898 and Grantees recorded on 1901
The beneficiaries are therefore not recorded as occupants and a process of identifying the rightful rights holder, and consultation with the community and Traditional Authority must be undertaken. While the Upgrading of Land Tenure Act, 112 of 1991 (ULTRA) was supposed to provide for the upgrading of Quitrents into ownership, this does not appear to have been achieved due to these challenges.
ULTRA also provided for Leasehold rights and Deeds of Grant rights in terms of various statutes as indicated in Schedule 1 to the Act, to be upgraded to ownership. Rights to Occupation on certain land was also entitled to upgrade to ownership in terms of Schedule 2 to the Act.
Ultra has since been amended to provide for the application for conversion of tenure rights to ownership and for the automatic conversion of rights to ownership for Schedule 1 tenure holders where a township register had been opened at the commencement of the amendment act.
Informal rights are often based on a “notional” site.
Because the market within these areas is not always informed and/or consistent, tenure rights and their legal complexity become incredibly difficult to interpret.
The South African Government (Department of Rural Development and Land Reform together with the Office of the Valuer-General) will be undertaking a pilot project to record communal land rights by surveying the boundaries, investigating the vested rights to determine any overlapping of rights and confirming secure tenure. Those with undocumented land rights will be identified with a geo-spatial link to the subject “notional” site.
An Electronic Deeds Registration system has been developed which will allow the recordal of all types of land tenure systems and their administration. The registration of all rights will take place within this repository utilising a unique identifier such as the SG 21 Digit key that is currently used for the identification of formal land rights (Recordal of Land Tenure Rights Portal – OVG, 2024). Once the enabling legislation has been enacted, these rights can be valued and recorded in the Deeds Registry.
Tenure rights on commercial sites have always been better defined, as long leases on Ingonyama Trust Land are being recorded in the Deeds Registry making their valuation and property tax collection marginally easier to undertake.
There is currently a challenge in collecting property taxes due to the indigent rural population that resides on these communal lands. Many of their dwellings are wattle and daub structures and unemployment is high. Most often a policy decision is taken by the local authorities to exempt these residential tenure rights as the cost of collecting the taxes would outweigh the benefit (and the value) of the tax collected.
The Approach to Valuing these Less Formal and Informal Rights.
An informal right to land is defined in IPLIRA as including the use of, occupation of, or access to land in terms of:
- any tribal, customary or indigenous law or practice of a tribe;
- the custom, usage or administrative practice in a particular area or community, where the land at any time vested in the former homeland areas;
- beneficial occupation of land for a continuous period of not less than five years prior to 3 December 1997.
And “Beneficial occupation” is defined in section 1 of IPILRA as meaning “the occupation of land by a person, as if he or she is the owner, without force, openly and without the permission of the registered owner”.
The land over which a person has informal rights can be referred to as a “notional” site.
Section 2(4) of IPILRA provides that “for the purposes of this section [i.e. Section 2] the custom and usage of a community shall be deemed to include the principle that a decision to dispose of any such right may only be taken by a majority of the holders of such rights present or represented at a meeting convened for the purpose of considering such disposal and of which they have been given sufficient notice, and in which they have had a reasonable opportunity to participate”.
These rights are commonly required to be valued as part of statutory acquisitions by our national roads agency (South African National Roads Agency Limited SOC – SANRAL) in terms of the South African National Roads Act, 7 of 1998, the Expropriation Act, 63 of 1975 and Section 25(3) of the Constitution of South Africa.
In all instances, International Valuation Standards must be applied, and these valuations shall follow the steps required in the valuation of formal, registered rights, i.e. inter alia, consideration of Highest and Best Use, comparable market evidence as well as any other information that the valuer may be able to source from community consultations and meetings with Traditional Authorities and any other stakeholders.
An approach often used by developers, the residual method, is often applied to arrive at a value for agricultural land with housing potential, working backwards from the value of serviced and zoned land to arrive at a value for land with residential potential.
The Office of the Valuer General has been tasked with the development of a valuation framework for the valuation of communal land to facilitate and unlock opportunities for residential and commercial property development. Leasehold is the form of land tenure envisioned for this communal land development as it is a secure right registerable in the Deeds Office. This will bring much-needed investment to rural areas that have been previously excluded due to insecure tenure rights. While this may seem to be encouraging financial recklessness, the reality of the situation is that the majority of the population residing in these traditional areas are indebted to loan sharks as they are unable to obtain finance from the banking sector. This will hopefully serve as an entry to the general economy by providing security for loans.
Unlocking rural land for commercial development
Conclusion
While valuing these indigenous lands presents a challenge, it can be done by adhering to International Valuation Standards (IVS). The valuer must disclose, as part of the valuation requirements, the nature and significance of the inputs and their verification, the basis of value and all others stated in the latest IVS. Where possible, the result can be checked by employing another approach, with the necessary adjustments.
South Africa is not alone. The writer believes that we can all benefit by sharing ideas and information to overcome these challenges.
References and Acknowledgement
Land: dispossession, resistance and restitution | South African History Online (sahistory.org.za)
Office of the Valuer-General
Greater Edendale and Vulindlela Development Initiative (GEVDI)
