South Africa: New Act's Impact On Property Rights

Last Updated: 7 June 2012
Article by Edward Nathan Sonnenbergs

Most Read Contributor in South Africa, September 2016

Originally published in Property24, 23 May 2012

Property developers wishing to obtain property rights are advised to proceed under the existing provincial ordinances to change land rights.

Andrew Bembridge, director at Edward Nathan Sonnenbergs says property investors and South Africans wishing to obtain property rights should not proceed with new change of land rights applications under The Development Facilitation Act 67 of 1995 (the "DFA") as all applications under the DFA will be brought to a halt on 18 June 2012.

Developers with applications already in the process may have to reapply under different laws, he says.

Bembridge explains that the DFA came into effect as an alternate mechanism for approval of land developments to expedite the time consuming process of applying for land use changes and development under the existing provincial ordinances.

While not stated in the DFA, the original intention of the DFA was to ensure that the provision of low cost housing was expedited.

However without such limitation legislated for in the DFA, the mechanisms in the DFA were utilised for procuring rights for developments in all sorts of matters, including the development of properties for business purposes.

He says the DFA tribunal has extremely wide powers and assumes the planning functions of a municipality.

It is not bound by municipal plans or frameworks and empowered to disband or remove restrictive conditions and even waive the applicability of other legislation to a proposed development.

According to Bembridge, the Constitutional Court in the matter of City of Johannesburg Metropolitan Municipality (as applicant) and Gauteng Development Tribunal & Others (as respondents), decided on the 18 June 2010 that chapters V and VI of the DFA were constitutionally invalid for a number of reasons.

The main reason being that the function of municipal planning vests in municipalities and the decisions of tribunals under the DFA encroached upon this municipal function, he says.

However, he notes that the declaration of invalidity by the Constitutional Court was suspended for 24 months from the date of the order to enable Parliament to correct the defects in the DFA or enact new legislation.

Bembridge points out that the consequence of the decision is that all applications brought under the DFA which are not finalised will immediately come to a halt on 18 June 2012, because without chapters V and VI of the DFA, existing DFA decisions cannot be implemented.

He warns developers who currently have applications in process under the DFA as of 18 June 2012 may be forced to re-apply under alternate legislation. All applications that have been granted by the tribunal under the DFA that require to be "worked through" – in that further phases are still to be implemented - will come to a halt and developers will have to reapply under the existing provincial ordinances related to town planning, he says. He says there has been no attempt to correct the defects in the DFA during the 24 month period allowed by the Court.

The new legislation has been prepared in the form of the draft Spatial Planning and Land Use Management Bill 2012 (commonly referred to as SPLUMB).

SPLUMB is presently open for comment until 25 May 2012 and will not be promulgated by 18 June 2012.

Bembridge says SPLUMB is in itself not a solution to replace the DFA as it intends to provide for a uniform, effective, efficient and integrated regulatory framework for spatial planning and land use management.

It sets principles for future spatial planning and requires that spatial development frameworks be established on a national, provincial and municipal level.

Furthermore, it requires the establishment of tribunals at provincial and municipal level to deal with applications to amend land rights, he explains.

Bembridge warns that spatial development frameworks still have to be established at national, provincial and municipal level.

Therefore, SPLUMB will not be effective until the plans and tribunals are established and regulations published.

SPLUMB does however, in its current 2012 draft, include transitional provisions which enable tribunals under the DFA to continue to function until all applications, appeals and other matters pending before the tribunals had been decided or otherwise disposed of.

He says SPLUMB intends to repeal the DFA and provide that no new land development applications may be brought under the DFA after the date of repeal of the DFA.

Meanwhile, application has been made by the South African Council for Consulting Professional Planners & Others to the Constitutional Court to extend the period of the suspension of the order of constitutional validity for a further two years.

Hopefully the Constitutional Court will grant such an order to avoid the terminal consequences to existing DFA applications and decisions, but while uncertainty exists, developers should proceed under the existing provincial ordinances to change land rights, he adds.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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