The Department of Rural Development and Land Reform (DRDLR) provided responses to the three public submissions deemed relevant to the Property Valuation Bill.
The Banking Association of South Africa (BASA) submission recommended changes to the definitions of ‘land reform’, ‘market value’ and ‘value’ as they had shortcomings. It recommended that the definition of ‘land reform’ be expanded upon to draw a clear distinction between what constitutes ‘land reform’ and normal state acquisitions, disposal or leases of property. For ‘market value’, it recommended that ‘credible data’ should be defined in the Bill and the definition of ‘market value’ should be altered. The definition of ‘value’ should be broadened up to the level that its security would be paid or there be provision of a blanket state guarantee that financial institutions would not suffer losses if state valuations paid to property owners were less than the market value. In Clause 5(c), BASA said there would be a conflict of interest if the Office of the Valuer General (OVG) was to be accountable to the Minister of Rural Development and Land Reform. It recommended that the OVG be accountable to the Minister of Public Works. In Clause 7, BASA submitted that the powers afforded to the OVG were too wide. It recommended that the clause should be amended to ensure that a person’s constitutional rights were not infringed upon. In Clause 9, BASA submitted that the clause did not specify the skills that the Deputy Valuer-General was required to have. It recommended that it include the specific skills required of the Deputy Valuer-General. In Clause 11(2), BASA said that the clause was ambiguous. It recommended that the content of the clause be amplified to clearly specify what assistance might be needed. In Clause 13(3), BASA said that holders of registered rights should be notified of intended valuations to be conducted by valuers. It recommended that a written notice be sent to holders of registered rights.
The DRDLR responded to BASA’s submissions: On ‘land reform’, it stated that the distinction between “land reform” and the state acquiring/disposing or leasing property in its normal course of business” was contained in Clause 12. The DRDLR rejected BASA’s recommendations about the definition of ‘market value. The recommendations about ‘value’ were regarded as speculative and that they would negate the whole object of the Bill and go against the Constitution. On Clause 5(c), the DRDLR rejected the recommendation and said that there was no basis for it. On Clause 7, the DRDLR noted the recommendation, but was not in total agreement with it. As regards Clause 9, the DRDLR was in agreement and proposed that specific functions would be assigned to the Deputy Valuer-General. On Clause 11(2), the DRDLR enunciated that assistance would be provided by specialists. The DRDLR rejected the recommendation for Clause 13(3) and failed to understand any basis for it.
A committee member asked why the DRDLR felt BASA’s submission about ‘value’ was speculative. The same member commented that the DRDLR’s response to Clause 9 was inadequate and that the submission had to be given more consideration. Another member referred to DRDLR’s response to Clause 11(2) and asked from where the specialists would be sourced.
AGRI-SA was concerned that valuations conducted by the OVG of land targeted for reform would influence the purchase price offered by the state to land owners, not a determination of compensation for expropriation. It was proposed that the two concepts were unnecessarily blurred by the Bill. AGRI-SA expressed its concerns that the Bill would undermine the chances of successfully concluding transactions to buy land for reform and force the state to expropriate the land. On Clause 1, it recommended that the definition of ‘land reform” was too wide and certain words were recommended to curtail its wide meaning. The definition of the word ‘land development’ was seen as being vague. It was recommened that it should be amended to give clarity. On Clause 7, it said that the powers afforded to OVG were wide and recommended that the OVG’s powers should be qualified. On Clause 8, it said that that issue of appointments was vague and should be clarified. On Clause 10, it said that the functions of the Valuer-General and Deputy Valuer-General were not totally clear. Concerning Clause 11, it said that there was no distinction made between authorised valuers and assistants. It recommended that the necessary distinction be made. On Clause 13, comments were made about Clause 13(1)(c) and(d); Clause13(1)(f) and Clause 13(3).
The DRDLR did not accept the recommendations. On Clause 1, the recommendation was rejected. It stated that the words proposed to curtail the meaning of ‘land reform’ would limiting the meaning of the phrase itself. Clause 7 recommendations were similarly rejected. As regards Clause 8, DRDLR clarified the provisions of the clause. Clauses 10 and 11 recommendations were accepted. On Clause 13, the recommendation about Clause13(1)(f) and Clause 13(3) were accepted while the recommendation about 13(1)(c) and (d) was rejected.
A Member commented that the DRDLR response to AGRI-SA’s submission about Clause 1 was inadequate and therefore required further explanation. A Member referred to the submission on Clause 11(4) which dealt with the directives issued by the Valuer-General. He asked whether there ought to be guidelines as to what would constitute the nature and methodology of the directives.
TAU-SA saw the Bill as an effort by government to introduce legislation which would result in the Valuer-General getting total control over valuations. TAU SA urged that when the value was determined, all possible uses should be considered in as far as those uses might influence the value of a property. On Clause 1, it said that the definition of the words ‘property’ and ‘valuation’ should be modified. Clause 7 should be scrapped. Clause 8 should be amended to ensure an appointee had no political interest. Clause 11 needed to be amended to reflect the specific requirements required. Clause 12 should be amended to prevent corruption. In Clause 13, there was a need to achieve a balance between the valuer’s function and the property owner’s interest.
The DRDLR did not accept most of the recommendations proposed, but clarified its stand on the issues raised. The recommendations about Clause 1; Clause 7; Clause 8; Clause 11 and Clause 12 were not accepted. On Clause 13, it stated that the clause would be amended to reflect the recommendation.
A Member asked from where the “universally accepted definition” of ‘valuation’ was sourced. A Member referred to the DRDLR response to the submission about Clause 8(2) which stated that the TAU SA ’s proposal would contravene section 19 of the Constitution which dealt with the political rights of citizens. He commented that the DRDLR interpretation of section 19 of the Constitution was incorrect.
A Member pointed out that the submissions received by the Committee on the Bill were few. He therefore proposed that the Bill should be afforded more time for public comment. The Committee decided that due process had had been followed on the Bill and as such there was no need for the Bill to be subjected to a further call for comment.
The Chairperson tabled the agenda and Mr K Mileham (DA) proposed that item three - clause by clause consideration of the Property Valuations Bill - be moved to the next meeting. The reason was that the ‘Department Response to the submissions’ was a lengthy document which had only just been received and Members had yet to properly consider the document. The Committee agreed.
Mr Thapelo Motsoeneng, Chief Director, asked the Chairperson for guidance on how the deliberations should be presented to the Committee. He sought to know if the submissions were to be taken consecutively.
The Chairperson directed the DRDLR to present each submission and the response of the DRDLR about each submission. Members would ask questions in respect of each submission and DRDLR response after they had been presented.
Mr Motsoeneng commenced with a summary and response to the Banking Association of South Africa submission.
Banking Association of South Africa (BASA) submission
On Clause 1, BASA submitted that the definition of ‘Land Reform” as defined in the chapter was too wide as it did not draw a distinction between land reform and the state acquiring/disposing or leasing property in its normal course of business. Section 25(3) of the Constitution defined “public interest” as “includes the nation’s commitment to land reform and to reforms to bring about access to all South Africa’s natural resources.” It followed that the definition of “just and equitable” compensation as contained in that section of the Constitution did not include the acquisition, disposal or lease of property in the state’s normal course of business. Thus, this should be excluded from the definition as such valuations should be based purely on market value. BASA recommended that the definition of “land reform” should be expanded upon to draw a clear distinction between what constitutes “land reform” and normal state acquisitions, disposal or leases of property.
On the definition of ‘market value, it referred to “the absence of other credible data, prices paid by the state for any acquisition of property may be considered” and recommended that: “credible data” should be defined in this Bill; in the event of there being no “credible data” it would be preferential for alternative valuation methods to be used, for example, the direct capitalisation method, as the usage of prices based on state acquired properties for land reform purposes could distort what was deemed to be the market value of such properties.
BASA noted about the definition of ‘Value’ that it was a direct extract from section 25(3) of the Constitution, which definition could result in valuations being less than market value. This was of great concern to financial institutions as the Banks Act Regulations (which were derived from the global regulatory framework), required financial institutions to derive the security value of a property from the market value of that property. The extension of credit was a risk that had to be managed in terms of strict prudential rules imposed on financial institutions, as consequences for not adequately managing the risk credit posed could lead to systemic consequences for the economy as was evidenced by the current global financial crisis. Lenders adhered to strict risk based pricing principles when calculating the interest rate. These included the risk profile of a client and their ability to repay a loan. Unless valuations were calculated on the market value of the property, a consequence of the Bill would be that private sector lenders would:
- withdraw from providing loans where property was being offered as security for the loan and/or
- adopt a more conservative approach to the extent of the loans they would be prepared to provide as compared to property values (so called maximum loan to property value) and/or
- more importantly, this could impact negatively on the capital adequacy and the stability of commercial banks.
In turn, this could sterilize the market, affecting food security. In stakeholder engagements with the DRDLR over the past two years, DRDLR recognized the need for the state to avoid such an occurrence. It was understood that in December 2012, Cabinet had approved their policy framework document: “A policy framework for land acquisition and land valuation in a land reform context and for the establishment of the Office of the Valuer-General, dated 18 October 2012. BASA recommended that the definition of “value” should be broadened to either include the:
- need for valuations to take cognisance of and where necessary to adjust valuation calculations upwards to a level where monies owed to registered rights holders (mortgagees/special notarial bond holders) up to the level of their security would be paid;
- provision of a blanket state guarantee that financial institutions would not suffer losses if state valuations and hence the compensation paid to property owners was less than the market value.
Response of DRDLR to BASA submission
In response to BASA’s submission on the definition of ‘Land Reform”, the DRDLR stated that the distinction between “land reform” and the state acquiring/disposing or leasing property in its normal course of business” was contained in Clause 12. Valuations for purposes of land reform were linked to section 25(3) of the Constitution. Whereas the valuation for any reason other than land reform is based on the market value principle.
In response to BASA’s submission on the definition of ‘market value”, the DRDLR commented that it did not agree with the proposal. Valuers must be given the space to utilise data relevant to the particular valuation.
In response to BASA’s submission on the definition of ‘value”, the DRDLR commented that the submission was speculative. In any credit agreement the lender took on a particular level of risk and priced such risk into the amount of the loan and the interest they charged. Even in instances where consumers passed the affordability test the risk of default remained and lenders priced that into the interest charged. The banking sector would adjust to this policy implementation as it should recognise that this was a national imperative that was guided by the letter and spirit of the Constitution. With regard to the banks’ ability to provide credit to the agricultural sector, the Valuer-General was not a stand-alone intervention, but one amongst a suite of instruments aimed at transforming land relations in the country. One such instrument was the recapitalisation and development programme of the Department which made funding available to farmers. The DRDLR did not agree with the BASA’s recommendations. They would negate the whole object of the Bill and go against the Constitution.
BASA submission on Clause 5(c)
BASA did not believe that the Office of the Valuer-General could be “impartial and must exercise the powers and perform the functions of office without fear, favour or prejudice” if it was to be accountable to the Minister, given the DRDLR’s vested interest in the quantum of compensation to be paid for acquisition of property for land reform purposes. There was therefore a conflict of interest if the Office of the Valuer General was to be accountable to the Minister. This was deemed to be a critical issue. It also noted that the Office of the Valuer-General was intended to provide a specialist valuation service to multiple national and provincial departments for acquisition, disposal or lease of properties. It followed that as its intended function was broader than the valuation needs of DRDLR, that it should vest within the Department of Public Works, which catered for the needs of the broader State. BASA recommended that Clause 5(c) be amended to read “is accountable to the Minister of Public Works”.
The DRDLR replied that it did not agree with the proposal. There were no valid bases to infer that the Minister would interfere in the functioning of the Office of the Valuer-General. The main thrust of the Office of the Valuer-general was aimed at promoting land reform which function vested with the RDLR Minister.
BASA submission on Clause 7
On Clause 7 dealing with the powers of the Valuer-General, BASA submitted that the clause made provision for the Office of the Valuer-General to “engage in any activity to promote the proper, efficient and effective valuation of property”. BASA was of the view that this power should be qualified to reflect that this should be restricted to comply with constitutional principles such as the rule of law. The Dawood Constitutional Court case held that an administrative action which affected a person’s fundamental rights was unconstitutional. BASA recommended that either the wording should be amended to ensure that a person’s constitutional rights was not infringed upon or the words “engage in any activity to” be deleted.
The DRDLR commented that the submission was noted, however did not agree that the power should be qualified, as in terms of section 16 of the Constitution, any “law or conduct inconsistent with the Constitution was invalid”.
BASA submission on Clause 9
This which dealt with the Deputy Valuer-General. BASA recommended that it be amended to include the same skills set and the Valuer-General: a registered valuer, with suitable experience and knowledge of public administration and public finance matters.
The DRDLR proposed that Clause 9 and 10 be amended to provide that the Valuer-General be responsible for the valuation functions and the Deputy Valuer-General responsible for the day to day management of the office and the finances.
BASA submission on Clause 11(2)
This dealt with the valuation of property. BASA said that it did not understand what was meant by this clause. The Property Valuers Professions Act and the SA Council for the Property Valuers Profession made provision for the registration and usage of candidate valuers who were professionals studying towards their valuer qualification and registration as valuers. They could conduct valuations subject to these being counter signed by a registered valuer. It was assumed that this was what was being suggested by the clause. If so, the drafters should align this clause to those clauses within these Acts. Further, if such a valuation was disputed by the property owner, an independent Valuer should be tasked with conducting a fresh valuation of the property. The content of the clause should be amplified by the drafters to clearly specify what assistance such assistants might provide.
DRDLR stated that Clause 11 provided that all valuations were conducted by registered valuers, but that they might be assisted by specialists in a particular field.
BASA submission on Clause 13(3)
BASA said holders of registered rights (mortgages / holders of special notarial bonds) who enjoyed real rights, should be notified that a valuation was to be conducted on the property by the authorised valuer. It recommended the clause read: “a written notice must be delivered to the owner or person apparently in charge of the property and the holders of registered rights…”
The DRDLR said that it did not agree with the proposal. It was not clear why the responsibility to notify the holder of registered rights about the valuation should be placed on the authorised valuer.
Mr Mileham referred to BASA’s proposal about the definition of ‘value’ in Clause 1. He asked why the DRDLR felt the submission was speculative.
Mr Mileham referred to the DRDLR response to BASA’s proposal about Clause 9 on the Office of the Deputy Valuer-General. He found the response of the DRDLR inadequate. He referred to Clause 8(2) and stated that the functions of the Deputy Valuer-General as set out in the clause demanded that the person occupying that position ought to be someone who possesses a number of skills. It appeared that the DRDLR had not taken this into consideration and as a result BASA’s submission ought to be given more consideration.
Mr M Swathe(DA) referred to BASA’s submission on Clause 11 about the registered valuer. DRDLR had replied that all valuations were conducted by registered valuers, but that they might be assisted by specialists in a particular field. He asked from where these specialists would be sourced.
Mr Motsoeneng replied that the specialist to assist the registered valuers would also be registered valuers. If for any reason the registered valuers needed professionals who were specialists in another field, then those specialists might be recruited for the valuation.
On Clause 1, Mr Motsoeneng replied that DRDLR had said it was speculative because market forces did have an effect on whether the banks would grant a loan.
On the required functions of the Deputy Valuer-General, Mr Motsoeneng replied that the Deputy Valuer-General’s position could be likened to the position of a Chief Operations Officer who had the obligation of catering for the day-to-day running of an organisation.
Ms Tshepo Mahlaela, Chief Director: Legal Services, presented the submission of Agri-SA.
AGRI-SA said it had participated in the formulation of policies and draft legislation for the Office of the Valuer-General (OVG) in the Green Paper on Land Reform consultation process. The organisation had provided inputs throughout the NEDLAC process and submitted commentary on both earlier versions of the Bill. AGRI-SA recognised the need to accelerate land acquisitions to speed up the pace of land reform. Whilst government might have paid inflated prices for land in certain transactions, this could be attributed to a lack of clear instruction and monitoring of valuers, corruption, and poor implementation of the process rather than a failure of the willing-buyer willing-seller principle. AGRI-SA stood by its support of market-based transactions for land reform. Where expropriation was necessary, AGRI-SA supported the view of the Food and Agricultural Organisation (FAO) of the United Nations that compensation must be based on equivalence. Affected owners and occupiers should be neither enriched nor impoverished as a result of the expropriation for a public purpose or in the public interest.
As stated in its commentary throughout the various drafts, a valuation by the OVG should be restricted to the state’s own internal house-keeping requirements and must never be binding on the property owner. The Bill must in no way restrict the owner’s ability to access the courts if a dispute arose. From a legal-conceptual point of view, AGRI-SA did not believe that it was appropriate to impose the factors related to just and equitable compensation for expropriation onto normal land acquisition transactions.
The Constitution only prescribed ‘just and equitable compensation’ and the factors used to determine it in the context of expropriation. The Bill did not make reference to expropriation anywhere. In the Explanatory Memorandum to the Bill, it seemed clear that the intention was to combat escalating land values and exorbitant prices paid for land targeted for reform by providing the state with an internal valuation capacity. Clearly therefore, valuations conducted by the OVG of land targeted for reform would influence the purchase price offered by the state to land owners, not a determination of compensation for expropriation. It was proposed that the two concepts were unnecessarily blurred by the Bill. The factors used to determine ‘value’ in the Bill only had a constitutional basis as far as expropriation was concerned, there was no constitutional basis advocating that these factors should influence the purchase price in a normal sale/purchase transaction.
From a pragmatic point of view, AGRI-SA was concerned that the Bill would undermine the chances of successfully concluding transactions to buy land for reform and force the state to expropriate the land. If land earmarked for land reform was valued using the criteria set out in this Bill, and such a value was less than the market value, it seemed unlikely from a business perspective that a land owner would voluntarily accept an offer from government that was less than the market value if he could receive more for it on the open market. For this reason, the government would then have to resort to expropriation.
Finally, AGRI-SA was concerned about the suitability of authorised valuers to interpret factors synonymous with just and equitable compensation. The Bill mandated professional valuers to arrive at a value which must reflect an equitable balance between the public interest and the interests of those affected by the acquisition. In doing so, a valuer must consider and give a quantifiable value to factors such as the purpose of the expropriation, and the history of the acquisition of the property. This essentially involved the weighing up of competing constitutional rights and interests, a function traditionally allocated to the courts. Unlike the judiciary, AGRI-SA was concerned that a professional valuer would in all probability not have the required skills, expertise and experience to make such a value judgement. This was precisely why section 25 of the Constitution, from which the provision was taken verbatim, entrusted the courts with the task during expropriation, and not professional valuers.
The Bill did not restrict the owner’s right to access the courts in the case of a dispute. The DRDLR was of the view that it was appropriate to impose the factors relating to just and equitable compensation for expropriation on to land acquisition transactions for land reform purposes as this was a precursor to expropriation. The utilisation of the same factors used to determine just and equitable compensation, for determining the value of property identified for land reform was not unconstitutional. If agreement could not be reached the Department would expropriate. The Expropriation Bill proposed the use of registered valuers to ascertain the value of property that had been identified for expropriation. Section 25 only entrusted to the courts the determination in the event that those affected could not agree on the compensation. Furthermore section 25 did not preclude the use of a professional valuer to value a property with a view to determine a just and equitable compensation for the property.
Agri-SA’s comments on Clause 1
The definition of ‘land reform’ was too wide and should be curtailed to prevent unintended consequences.Certainty regarding the scope and content of land reform in the context of the Bill was vital because a distinction was made between land earmarked for acquisition or disposal by a national or provincial government department which must be valued according to market value on the one hand, and land identified for land reform on the other, which must be valued according to ‘just and equitable compensation’ taking into consideration the factors listed in section 25(3) of the Constitution. The word “land development” was vague and could lead to confusion in interpretation. This phrase created great uncertainty and AGRI-SA requested that the definition be amended to provide certainty.
In addition, according to the rules of statutory interpretation, where a list was preceded with the word “includes”, it meant that it was not a closed list. The result was that the Bill might be interpreted to cater for ‘land reform’ that fell outside of land redistribution, land restitution, tenure reform and land development. This causes uncertainty about which method of valuation was to be followed in instances where it might be related to land reform, but not necessarily fall within the ambit of an existing land reform programme. AGRI-SA suggested that “as provided for in a law of general application aimed at such redress” should be inserted at the end of the sentence immediately after the words “tenure reform”. Agri- SA also sought clarity on the meaning of the phrase: “also considering all the underlying economic factors of the market”. What were the underlying factors of the market?
The DRDLR replied that according to the International Association of Surveyors, ’land development’ was defined as the building of new infrastructure; the implementation of construction planning and the change of land use through the planning permission and granting of permits. This tied very neatly with other departmental programmes like Rural Infrastructure Development, Spatial Planning and Land Use Management. Further to this was the requirement to ensure that the farms acquired through the various land reform programmes were developed through the Recapitalisation and Development programme. If the words ‘as proposed’ were inserted at the end of this definition this would have the effect of limiting the meaning of the phrase “land reform” as this would require that each of the phrases “land redistribution”; “land restitution”; “land development” and “tenure reform” would have to be amplified or defined in a law of general application, failing which it would not be possible to apply these terms. Every valuation took place in a certain context and not in a vacuum and this implied that “underlying economic factors of the market” should be considered.
Agri-SA’s comments on Clause 7(c)
This provision stated that the Office of the Valuer-General may “engage in any activity” to promote the proper, efficient and effective valuation of property. Affording an administrative official any powers deemed necessary undermined the constitutionally protected principle of the rule of law, and should be qualified. The right to just administrative action contained in section 33 of the Constitution provided that all ‘administrative action’ must be lawful, in other words there must be a law of general application that granted the administrator the authority to make that decision. If the power conferred on the administrator was so wide that it was impossible to tell or determine when an official was acting intra vires or ultra vires, it might well unjustifiably infringe on an interested person’s right to just administrative action. Justice O’Regan dealt with this issue in the Dawood case. The Constitutional Court held that where administrative action affected a person’s fundamental rights, that administrator’s actions would be an unconstitutional and unjustifiable limitation on section 33 if the administrator’s powers were not curtailed or prescribed by law. AGRI-SA therefore suggested that the powers of the Office of the Valuer-General be qualified and described in more detail in the Bill.
The DRDLR did not agree that the power referred to should be qualified. In terms of section 16 of the Constitution, “law or conduct inconsistent with the Constitution is invalid”.
Agri-SA’s comments on Clause 8(2)
This clause dealt with appointments. It submitted that there should be clarification, perhaps via regulations, what would constitute ‘sufficient experience’.
The discretion to decide whether a person had “sufficient experience” vested with the Minister.
Agri-SA’s comments on Clause 10
This clause dealt with the responsibilities of the Valuer-General and Deputy Valuer-General. It was proposed that the word “the” might accidentally have been omitted in the title of this section immediately prior to the words “Valuer-General”. Clause 10(1)(b) stated that the Valuer-General takes all decisions in the exercise by the Office of the Valuer-General of its powers. AGRI-SA wondered if this meant that the Valuer-General could trump any decisions taken by an official to whom he/she had delegated the authority to decide on the matter in terms of Clause 19 of the Bill? Also, did this make all decisions by other officials “ultra vires”?
The DRDLR agreed and the necessary amendments would be effected. In respect of Clause 10(1)(b), Section 19(3) clearly provided that the Valuer-General may confirm, vary or revoke any decision taken as a consequence of a delegation, subject to any rights that may have accrued to a person as a result of the decision.
Agri-SA’s comments on Clause 11
This clause dealt with authorised valuers and assistants. AGRI-SA welcomed Clause 113) as identity cards could help mitigate conflicts between authorised valuers and managers or farm owners when valuations must be conducted. It was however suggested that assistants who may accompany the authorised valuers must also be issued with identity cards to avoid confusion. On Clause 11(4), would the directives be published for public comment? AGRI-SA believed that the directives should be published for public comment as it believed that organised agriculture could make a profound, positive contribution to the directives. By making the OVG aware of standing arrangements such as the AGRI-SA Access to Farms Protocol, AGRI-SA could assist the OVG in the interest of co-operation and conflict mitigation.
On Clause 11(3), the DRDLR agreed that it ought to be amended to include a person who had been authorised to assist a valuer. On Clause 11(4), the DRDLR replied that the directives would not be published as they were merely to ensure that the valuer was clear on what was expected of him/her for each valuation.
Agri-SA’s comments on Clause 13
This clause dealt with general valuation powers. On Clause 13(1)(c) and (d): AGRI-SA submitted that these provisions should be qualified so that the owner would not be unduly prejudiced in any subsequent price negotiations in lieu of selling the property to the government. Such a qualification would bring the Bill in line with section 68(1)(c)(i) of the Promotion of Access to Information Act (Act 2 of 2000), or PAIA. Section 68(1)(c)(i) allowed a private body to refuse access to certain records of that body if the disclosure would put the private body at a disadvantage in contractual or other negotiations.
On Clause 13(1)(f), although AGRI-SA was wholeheartedly in support of the content and intention of the clause, it was suggested that the wording be reconsidered. Currently it states “an authorised valuer may –(f) must be in possession...” The word ‘may’, followed by ‘must’ was somewhat contradictory.
On Clause 13(3), AGRI-SA believed that merely giving notice to the owner/tenant/manager prior to entering a property for valuation purposes might lead to unnecessary conflict. AGRI-SA drew the Department’s attention to the precarious safety situation on farms. Farm attacks had been plaguing rural communities throughout the past decade, as a result, farmers might be very apprehensive and suspicious of persons entering farms without a prior appointment. AGRI-SA believed that the equivalent provision in the in Clause 5(3) of the Expropriation Bill reflected the best practice to avoid unnecessary conflict and should hence be repeated here. The Bill should therefore be amended so that a valuer would attempt to make an appointment to inspect the property and if the owner/tenant/manager unreasonably refused, then the OVG would obtain a court order. An the owner/tenant/manager would in terms of court practice be punished with a cost order for frivolously or vexatiously refusing access, so the necessary checks and balances were already in place.
Clause 13(1)(c) and (d) did not preclude the protection afforded to individuals by section 68 of the Promotion of Access to Information Act. The Expropriation Bill also contained similar provisions.
On the submission made on Clause 13(1)(f), the DRDLR agreed that it would be amended.
It also agreed to the proposal for Clause 13(3).
Mr Mileham referred to Clause 1 where AGRI-SA had asked for the meaning of ‘underlying economic factors of the market’. The response of the DRDLR was inadequate. He asked for the exact factors which required consideration.
Mr Mileham referred to Clause 11(4) which dealt with authorised valuers exercising their functions subject to the directives issued by the Valuer-General. There ought to be guidelines to give guidance to what would constitute the nature and methodology of the directives. There was also a need for the directives to be made public.
Ms Mahlaela replied to the question on the nature of directives to be utilised, saying the directives would be the internal standard operating procedures. However, on the standard to be used, the Bill provided in Clause 6 that the OVG was to make recommendations to the Minister to determine the procedures and guidelines.
Ms Mahlaela replied on the exact factors to be utilised in Clause 1, saying that valuations did not arise in a vacuum. The factors would vary from time to time depending on the time in which a valuation was happening.
TAU SA submission
TAU SA said that the Bill was an effort by government to introduce legislation which would result in the Valuer-General getting total control over valuations by, inter alia, appointing own valuers, and attaching a value on land according to their own views. By doing this, Section 25 of the Constitution, which clearly stated that a court of law should determine compensation, was been ignored. When the value was determined, all possible uses should be considered in as far as those uses might influence the value of a property. Added to this, the following aspects were also of importance: the market value of the property; the usage thereof; the principle of “just and equitable”. The anticipated utilisation of the Bill to unilaterally suppress valuations was regarded as unconstitutional.
Section 25 only entrusted to the courts the determination of compensation in the event that those affected could not agree on the compensation. Furthermore section 25 did not preclude the use of a professional valuer to value a property with a view to determine just and equitable compensation for such property. The criteria to be considered in determining the value for land reform purposes was linked to section 25 of the Constitution.
TAU SA comments on Clause 1
On ‘property’, it submitted that if movable property (especially if agricultural-related property such as livestock, implements, fertilisers, chemicals, tools, etc) was included the problem would escalate dramatically. To what extent would valuers be able to attach accurate valuations to such elements? This required valuers experienced in the field of agricultural-related valuations.
On ‘valuation’, TAU SA requested that reference to “specific use” (as used by the Land Bank) be replaced by “highest and best”.
On Clause 7(c)
TAU SA wondered why the concurrence of the Minister was needed? It believed this could create a loss of impartiality. It was proposed that the clause should be scrapped.
On Clause 8(2)
TAU SA said it should be expected that the appointee should not be politically tainted and therefore involvement in active party politics prior to appointment should disqualify a candidate. Further, any indication of bias should lead to immediate suspension and consequent dismissal should the bias become obvious.
On Clause 11
TAU SA noted that no indication was given to required qualifications. The lack of such prescription opened avenues for inexperienced and incompetent persons to be appointed. Clear requirements for the various positions were necessary.
On Clause 12(b)
TAU SA said that the authority to determine values of properties belonging to the state opens unseen and various avenues which could be exploited for illegitimate enrichment. It required a proper rework to ensure legitimacy.
On Clause 13(2)(b)
TAU SA said that the current description opened possibilities that properties could be inspected at the pleasure of the valuer and much to the disruption of the owner. It required qualification that it be conducted by prior appointment and agreement between the parties.
Response of DRDLR to TAU SA comments
On ‘property’, the DRDLR replied that the Bill provided that only registered valuers with extensive experience in the valuation of property would be utilised to conduct valuations.
On ‘valuation’, the DRDLR replied that the definition of “valuation” was based on the universally accepted definition.
On Clause 7(c), the DRDLR said it did not contain a reference to the Minister. This comment might refer to 7(a). The determination of a staff establishment was regulated by the Public Service Act which assigned the duty to the Minister.
On Clause 8(2), the DRDLR replied that the proposal would contravene section 19 of the Constitution which dealt with the political rights of citizens.
On Clause 11, the DRDLR replied that it dealt with appointment of valuers and required that the persons to be appointed must be a registered valuer with extensive experience in the valuation of property. Valuers were registered in terms of the Property Valuers Profession Act, No 47 of 2000.
On Clause 12(b), the DRDLR replied that it was not clear in respect of what this statement was based.
On Clause 13(2)(b), the DRDLR replied that Clause 13 would be amended to require the land owner’s permission before the property can be inspected.
TAU SA further submitted that the Bill as envisioned sought to circumvent the operation of the market as the basis of arriving at a valid value, in order to take property from one citizen and give it to another citizen for reasons that were self-admittedly racially based. TAU SA said that when it voted to adopt a “democratic” system in 1993/94, it was not on the basis that any family of the nation would be discriminated against on the basis of our skin colour for the rest of eternity. The Bill further was not seeking purely and solely to redress any past misappropriation of land, but to provide the State with carte blanche to appropriate land and reallocate it in line with the political doctrine of the ruling party. The Bill was seeking to institutionalise a disregard for personal property rights. The last time that this happened was in Zimbabwe, a nation on our borders. Zimbabwe, a decade after passing such legislation, was currently the second poorest nation on Earth [the poorest being the DRC].
Furthermore, the previous time this happened was in Mozambique, a nation on our borders. Mozambique became the poorest country on earth within a decade of passing such legislation and implementing the socio-political polity that drove such legislation [it had now risen to the tenth poorest nation on Earth on the strength of massive privatisation that was being stifled by equally massive corruption – leading to social and political unrest that follows the African pattern that could be seen in the DRC, Sierra Leone, Liberia and other liberated African socio-political agglomerations, and that the beginnings of these could be seen in South Africa]. There was no country in Africa that had implemented such legislation that was not amongst the poorest countries on the planet. An appeal was therefore being made to those considering the legislation to have some thought and consideration for the majority - the poor and the under-educated people who have elected them - trusting that they would implement policies that would improve their standard of living and their quality of life, and not cause them to share the suffering and deprivation of the people on the borders of South Africa. It was important to note that unlike Mozambique and Zimbabwe, South African people would not have a Republic of South Africa to go to in order to find work and provide sustenance to their families and their governments when the economic collapse associated with state sponsored and politically initiated disregard for personal property rights occurs.
The DRDLR commented that the further views made by TAU SA were clearly political in nature and had no direct bearing on the Bill.
Mr Mileham observed that the DRDLR had stated that the definition of “valuation” was based on the universally accepted definition. He asked from where this definition had been gotten.
Mr Mileham referred to the DRDLR’s response to the submission concerning Clause 8(2) which stated that the TAU SA’s proposal would contravene section 19 of the Constitution which dealt with the political rights of citizens. Municipal managers were prohibited from being active members of any political party. He was therefore of the view that the DRDLR’s interpretation of section 19 of the Constitution was incorrect.
Mr Motsoeneng replied that the proposal for Clause 8(2) was not an active prohibition from politics but that the appointees should not have been involved in politics prior to appointment.
Mr Motsoeneng replied that the DRDLR got the universally accepted definition “valuation” from a professional body. The submission did not contest the definition but rather proposed an addition to it.
Mr Mileham interjected and sought to confirm if the definition came from the South African Institute of Valuers.
Mr Motsoeneng stated that he was not certain of the precise source of the definition, but assured him that he would identify the source.
The Chairperson asked if there were any more submissions and responses the DRDLR wished to present to the Committee.
Mr Motsoeneng replied that the remaining submissions were of a general nature which were based on individual opinions and did not relate to any provision in the Bill. Technically, the DRDLR was not able to respond them. The DRDLR was done with those submissions that warranted a response from the DRDLR.
The Chairperson asked Members if they had any more comments.
Mr Mileham said he was of the opinion that the submissions received by the Committee were few. He personally did not believe that the period allowed by the Committee for public comments was long enough. He therefore proposed that the Bill should be afforded more time for public comments.
The Chairperson asked the Committee Secretary if the proper procedure had been followed on the Bill.
The Committee Secretary confirmed that the proper procedure had been followed and that no one had requested an extension of time for a submission to be made on the Bill.
Ms Nwgwenya-Mabila stated that there were processes to be followed for public comments. If people had shown up during the time period allowed for the tender of submissions and comments, then there was no need to start the process all over again after the close of that time period.
Mr Swathe agreed with the opinion of Mr Mileham to have the Bill subjected to another round of consultation with the public. There was a likelihood that people did not get to see the advert inviting comments on the Bill.
Mr Mandela agreed with the opinion of Ms Nwgwenya-Mabila and stated that it was possible that a lot of people did not make submissions on the Bill because they were in agreement with it.
The Chairperson stated that due process had been followed on the Bill and as such there was no need for the Bill to be subjected to further submissions.
The Committee adopted some minutes of a previous meeting and the meeting was adjourned.
- PC Rural: Adoption of minutes; Responses and deliberations on submissions received on the Property Valuations Bill [B54-2013] 2
- PC Rural: Responses and deliberations on submissions received on the Property Valuations Bill 2
- PC Rural: Adoption of minutes; Responses and deliberations on submissions received on the Property Valuations Bill [B54-2013] 1
- PC Rural: Responses and deliberations on submissions received on the Property Valuations Bill 1
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