New property legislation stalls development

Posted On Thursday, 22 May 2014 18:15 Published by
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About R12bn in property work perhaps more is stalled by a transition to new property legislation, says Sapoa.

Neil Gopal

The switch could force developers to relaunch development applications, appeals and other matters brought before provincial land tribunals.

Confusion arose when the Spatial Planning and Land Use Management Act (Spluma) replaced the Development Facilitation Act (DFA) last year.

Municipalities were placed in a position where they could let legal matters which had arisen between property companies and municipalities under the DFA stand, or force companies to start again using Spluma. Rural Development and Land Reform Minister Gugile Nkwinti also has the discretion to let property applications begun under the DFA be carried through to Spluma.

Sapoa said it wrote to the minister last week, but had not received a response. Errol Heynes, Mr Nkwinti's chief of staff, said yesterday that the ministry had not received Sapoa's letter.

"The matter evidently requires an adequate response. As you are aware, Parliament is busy with swearing in new members and there is the inauguration of the president and the appointment of the Cabinet all taking place in close succession, and that most likely involves Minister Nkwinti," Mr Heynes said.

Sapoa CEO Neil Gopal said companies and municipalities were caught in a legislative bottleneck. "We have voiced concerns about development bottlenecks before, which are often caused by legislative delays, illconsidered legislation, or (legislation that has) unintended consequences," he said.

"This, together with an increasingly complex regulatory environment, is restricting the growth of the commercial property sector in the country." In its letter, Sapoa asked Mr Nkwinti to use his discretion to remove some of the financial, economic and social effects being experienced by the commercial property sector because of the legislative snarl-up.

The problem was affecting property development, job creation and poverty alleviation. "If the minister does not use his discretionary powers in terms of this section of the act, it could mean the many new property development applications would have to be launched again, Mr Gopal said. "This is unnecessary bureaucracy," he said.

The letter cited a sample of three major property projects to highlight the prejudice the commercial property sector faced as a result of the disjuncture between the old and new legislation. The effect on job creation and potential rates payable to municipalities was significant, said Mr Gopal.

"The three sample projects were worth R12bn, but many more projects nationwide could be affected, which could literally hold up developments worth billions of rand more," Sapoa president and Growthpoint Properties executive director Estienne de Klerk said.

Sapoa said it was also concerned about the Subdivision of Agricultural Land Act. This act had made it difficult for agricultural land to be rezoned for commercial development.

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