Weekend Argus (Saturday Edition)
AGRICULTURAL LAND BILL
IN MARCH, Rural Development and Land Reform Minister Gugile Nkwinti published the draft Regulation of Agricultural Land Holdings Bill for public comment.
The bill is aimed at progressing land reform in the agricultural sector and will have far-reaching implications for current and future owners of agricultural land.
The closing date for the submission of public comments has been extended to June 13.
Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, says among the disquieting legislative changes in the new Regulation of Agricultural Land Holdings Bill are total bans on non-citizens owning farms and that any foreign nationals who own agricultural land can’t sell their property on the free market – the Land Reform Ministry has first choice.
Only if the ministry doesn’t want it, can a farm be sold through normal channels.
“Perhaps more alarming is that in any district identified by the ministry as a ‘redistribution area’, all farmers regardless of citizenship may only sell to black buyers. If none is found, the ministry will determine a value and buy the land. The farmer will have no negotiation leverage – if he doesn’t agree to the price, his farm will be expropriated.”
Ian Badenhorst, managing director of Seeff Country, says it is unclear whether the bill will further the land issue, but he believes it is likely to further dent investor confidence.
“We believe legislation such as this would be better crafted in collaboration with the agricultural industry,” says Badenhorst.
“It appears the draft act is fairly impractical and unlikely to meet the requirements of the constitution. It is therefore critical for property owners and buyers not to panic and think there is going to be a large-scale redistribution.
“There are agricultural organisations making the necessary submissions aimed at providing government and law makers with more insight and clarity.”
Zinaid Rawoot, a partner at Webber Wentzel, says while it is not unheard of for countries to restrict foreign ownership of land, the current draft of the bill does give rise to concerns about its practical implementation. Concerns include:
"The reference in the bill to concepts of an 'offer' and 'a right of first refusal' may result in confusion. The bill purports to attempt to grant the minister a right of first refusal but places an obligation on a foreign owner to ' offer' the right of first refusal to the minister. In our view, it would be preferable if the minister were rather granted a clear legislative right of first refusal.
"It is unclear whether a sale agreement subject to a suspensive condition and the sale of controlling interest in a juristic owner of land, would be regarded as acquisitions of ownership which would trigger a requirement to notify the transaction to the Land Commission."