Hannes Visser has filed objections to the North West land claims commission's October notice that it will expropriate his 500 ha farm in Sannieshof. The department of land affairs says final negotiations should end in a week or so, 2½ years after they were opened. Nobody expects sudden agreement so the expropriation is almost certain to go ahead.
Government will pay Visser the R1,75m that its valuer says the farm is worth. It will hand the land to the family of Thomas Molamu, who lost it in the 1940s. Visser will probably go to court to get the R3m he wants, thus testing section 25 (3) of the constitution for the first time. The chorus of warnings that foreign investors will pull out will continue. The Zimbabwe land-grab drum will be banged. Yet this process will emulate those used routinely in other countries, from Japan to Jamaica.
Why has government been so slow to use expropriation for land restitution or reform? Is it because of world reaction to government land expropriation in Zimbabwe? Or can't it afford the cost?
Neither, says former land affairs director-general Geoff Budlender: "Government's edginess in using expropriation probably has more to do with administrative clumsiness than lack of political will or money.
"The department of land affairs has no existing expertise in expropriation, unlike the department of public works, which has a section dedicated to this task, with experienced staff, established procedures and manuals."
In Budlender's time, he adds, "we started an expropriation, but the owner trapped us in legal and administrative procedures. The case simply became lost in the process."
Eminent domain - the power to take private property against the will of its owner - is fundamental to all states. The democratic ones compensate the owners. The world was not incensed because Zimbabwe's government expropriated farms, but because it did not compensate farmers properly and because of the thuggery that ensued.
Some critics say expropriation should be limited to "public use" such as building roads or the Gautrain, not to sell to other private owners. But public use has been stretched in most countries to "public good", which includes selling to private developers if their projects are for wider benefit.
For instance, the British government is expropriating land for urban regeneration around the new Wembley soccer stadium in London and the 2012 Olympic Games site. Much of it will end up in private hands.
The celebrated US case of 1984, Hawaii Housing Authority vs Midkiff, is most similar to SA's land restitution and reform expropriations. Hawaii's legislature enacted a law to take land from owners of large estates and give it to tenants on small pieces of land. The state argued that it remedied market failure caused by land oligopolies that prevented tenants getting ownership. The US supreme court declared the state's purpose legitimate.
The court again supported a wide definition of public use in June when reviewing Kelo vs the City of New London. It approved the Connecticut city expropriating Kelo's home on the banks of the Thames River to create expansion space for Pfizer Pharmaceuticals, parks and other public use.
But there are limits: the Georgia federal court stopped the city of Atlanta from taking a pensioner's home to produce a parking bay for property tycoon Donald Trump's limousine.
A clause in the US constitution's fifth amendment declares: ". . . nor shall private property be taken for public use without just compensation".
Section 25 (3) of the SA constitution goes further than that by requiring "just and equitable compensation" for "public purpose or in the public interest".
Paul Rubie of UK property consultants Knight Frank says the aim of compensation is to replace the property the owner loses with cash. He is organising the expropriation of land around the new Wembley stadium.
"Usually this means market value," says Rubie. "But there are issues of disturbance' such as the cost to the owner of legal advice or improvements that may be compensated as well."
So a court might support Visser's claim that he should be paid more for the abattoir he built on the farm.
The SA constitution also says the history of the property must be taken into account. This could include adjusting the compensation down if the owner paid below market price when the land was expropriated from the original owner using apartheid legislation.
Land and its expropriation are emotive and easily become political footballs. Government, farmers and opposition have played this issue for all it is worth around the "willing buyer, willing seller" model supposedly used to negotiate restitution.
But what began as a term to describe the negotiated transfer of land from white to black farmers has become a symbol for a pricing system that favours sellers and ensures "market value". Deputy president Phumzile Mlambo-Ngcuka says it must be "revisited".
The recent land summit called for "willing buyer, willing seller" to be abandoned so as to reduce the cost of land. Government has implied that to abandon it would also be to abandon market prices for farms.
Farmers and opposition political parties say it must be upheld to protect the rights of land owners. The Democratic Alliance says: ". . . should the willing buyer, willing seller' principle be abandoned, the impact on agricultural production, the broader property market, foreign investment and the economy as a whole would be disastrous."
These just add to the confusion. "Willing buyer, willing seller" is a term borrowed from the property valuation industry. If, as expected, the Visser expropriation goes to the high court, both parties will call expert valuers to argue for them. They will say that the market value of Visser's property is what a "willing buyer would pay a willing seller".
The court will then decide on a just and equitable compensation for Visser.
"But," says an advocate, "it will always be market value adjusted up or down, depending on the circumstances."
Financial Mail
Publisher: I-Net Bridge
Source: I-Net Bridge
