Property Valuation Bill [B54-2013]: deliberations; Committee Report on Restitution of Land Rights Amendment Bill public hearings

Rural Development and Land Reform

26 February 2014
Chairperson: Mr J Thibedi (ANC)
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Meeting Summary

In response to criticism that it had not taken the public submissions seriously, the Department said that it had been consulting with civil society since 2012 on the Bill. It could not take on board all proposals although it had tried to be accommodating.

The Committee went clause by clause through the Bill and the Department presented any proposed amendments. A number of clauses were amended, including the definitions, namely, the definition of land reform, market value, valuation and value. Further amendments were effected to clauses 6, 9, 10, 11, 13, and 15.

The Democratic Alliance were vocal in their complaints about procedure and the speed at which the Bill was being processed. It sought clarification on many of the clauses, one of these being land development which the DA maintained had nothing to do with property valuation. Further, it said that the appointment of Valuer-General should be subject to parliamentary approval to ensure independency, impartiality, and fairness in property valuation. This suggestion was not endorsed by the Committee.

After deliberating on the Bill clause by clause, the Chairperson requested the Department to present an amended Bill to the Committee on the following day at 08h30 for consideration and adoption. The Chairperson did not agree to a request for political parties to present the proposed amendments to their principal. He said voting was to take place the next day at 8.30am as the Bill was urgently needed.

Meeting report

Property Valuation Bill [B54-2013]: deliberations
The Chairperson asked the procedure to be followed for deliberating on the Property Valuation Bill and the Committee agreed to follow a clause by clause procedure.

A committee member noted that the fact that comments were requested from the public, did not mean that all the comments must be inserted into the Bill.

Mr Vusi Mahlangu, Deputy Director General agreed. The Green Paper was introduced in 2011. The Department had, since 2012, been engaging with civil society especially with those that had submitted inputs and comments. By and large, the Bill was a product of that engagement. The Department had honestly widely been consulting the parties concerned and these outstanding issues noted in the recent submissions were those that the Department could not agree to. This did not mean that the Department was dismissive of the public submissions. The submissions coming from the public hearings were taken seriously and were considered and this had even resulted in their agreeing to certain amendments.

Ms Tshepo Mahlaele, Chief Director: Legal Services, said that the Committee should read the Bill clause by clause and the Department would recommend the proposed amendments to particular clauses as they were reached.

The Chairperson agreed with the Department that it was not dismissive of the public comments. He said that he would read through the definitions in Chapter 1 of the Bill. After the reading, Members could deliberate on the definitions. Similarly, he would read through the other chapters.

Mr Mileham objected to the argument of the Department. He stated that the Bill that was in front of him was not an amended Bill. He requested the Chairperson to record his objection, which the Chairperson noted.

Mr S Ntapane (UDM) objected to Mr Mileham’s objection and, to save a time, requested the Chairperson to proceed.

The Chairperson reiterated that he would read through clause by clause and the Committee would have an opportunity to look at those clauses and see whether such clauses needed to be amended. If this was so, the Committee must formulate how the amended clause should read. The A list of Committee proposed amendments would come after this process was completed.

The Department agreed that they would draft the A list. It would be sent to the Committee for approval. If approved, the Department would proceed with the publication of the B version of the Bill.

Ms P Ngwenya-Mabila (ANC) seconded Mr Ntapane.

Before proceeding to read the Bill, the Chairperson appealed to members of the Committee not to continue to interrupt him.

Mr Mileham raised the issue of consistency in the usage of terms with specific reference to the valuers and assistants and Valuer-General and Deputy Valuer-General

The Department stated that it intended to substitute the term Deputy Valuer-General with Chief Executive Officer (CEO). This would totally and substantially affect clause 9 and 10 of the Bill.

The Chairperson sought clarification on substitution and asked whether everywhere in the Bill the Deputy Valuer-General appeared would be replaced by the CEO. The Department responded in the affirmative.

Mr Mileham said that if that change would be effected, the functions of the CEO ought to change as well. The CEO functions must be redefined because he/she cannot act as a Valuer-General.

The Department agreed with him.

Arrangement of Clauses
The Committee adopted this taking into the consideration that the Deputy Valuer-General has been replaced by the CEO.
Clause 1 Definitions
With reference to the definition of 'land reform', Mr Mileham said that the word ‘includes’ should be replaced by ‘means.’ He further submitted that “land development” was vague and could lead to confusion in interpretation. He was not happy with the Department's written response in which the Department defined land development as the building of a new structure; the implementation of construction planning, permission and granting permits. Mr Mileham argued that this definition clearly illustrated that land development did not tie with the object of the Bill. In the Bill, land development should be defined or taken out.

The Chairperson responded that defining the term was not a central issue given that other terms such as land restitution and land redistribution and tenure reform were not defined.

With reference to the 'market value' definition, Mr M Swathe (DA) said that he was not happy with the broad definition. It could be abused in the process because it opened a can of worms. Without clear and concise definition, the value of property might not well be evaluated. The term should be defined taking into account international aspects for the term to have a proper sense.

Mr Mileham was not happy with the phrase “exchange on the valuation date between a willing buyer and a willing seller” because the state is most of the time a willing buyer. The state might misuse its power to influence the seller to sell.

The Department replied that the state actually is not a willing buyer. It is compelled to buy by acts of parliament. Market value would be determined by a valuer on the basis of a number of criteria.

Mr Mileham sought a clarification on clause 12(b) which also referred to “market value of the property” and the difference from former practices.

Mr Ntabane, in answering Mr Mileham, said that he was of the view that the government was paying exorbitant prices when paying for land. The Department found the matter to be unreasonable and it was a good thing to regulate it.

The Department said that it would look at the definition and see if it could be redefined.

Mr Mileham sought clarification on the definition of valuation whether it included valuation of expropriation of land.

The Chairperson replied that he understood valuation in terms of selling and buying because the Bill did not deal with issues related to expropriation. The Department agreed with the Chairperson.

However, after discussion, the Committee concluded that the first definition of 'valuation' be amended and remove this last part of the definition: “including the legal framework and also considering all the underlying economic factors of the market”.

As regards the definition of “value”, Mr Mileham explained to the Committee that a clause (f) was needed to protect the creditors and/or financial institutions who might be affected by the acquisition.

The Department explained that, in practice, if a house is mortgaged R10 million by a financial institution and a valuer rates that house to be R8 million, the financial institution would say that a buyer has to say pay R10 million anyway. The Department concluded that the suggested clause was unnecessary. Central to this problem is that financial institutions focus on market value. But the Bill requires them not to look at merely market value but to take into consideration other aspects.

Mr Mileham disagreed with the Department explanation and indicated that the Bill negatively impacted on the security of financial institutions.

Mr M Swathe said that in that case the buyer and seller ought to abide by the contract between them.

The Chairperson said that when the peoples of South Africa, in 1996, adopted the Constitution and said that it ought to be supreme; it might be possible that they did not understand what it meant. Transformation was integral to the problem the Committee was facing. He asked, for example, why people should apply for land which is in the hand of others. In the transformation process, there should be bitter matters that many people have to endure so as to make sure the needed transformation happens.

Clauses 2, 3 and 4
These remained as they were.

Clause 5
As regards clause 5(c), Mr Mileham asked the department why the Valuer-General is accountable to the Minister instead of the Director General.

The Department replied that it was desirable to report to the Minister if one takes into account the duties and responsibilities of the Valuer-General.

Clause 6
It was noted that clause 6(e) was supposed to be 6(d) and this amendment was effected.

Mr Mileham sought clarification on use of the verb “value” in clause 6(a). He said that there was distinction between the following to terms: valuation and value. Valuation is a process of evaluating the value of something whereas value has its own meaning.

The Committee said that this difference ought to be visible.

Clause 7
Mr Mileham said that clause 7(c) was very broad, and vague. It undermined the rule of law.

The Committee did not agree with him.

Mr Mileham requested that the Chairperson record his objection.

Clause 8
Mr Mileham proposed that appointment of Valuer-General and the CEO should be made by the Minister subject to the approval of Parliament. This would promote fairness and impartiality. The candidates would be able to work independently without fear and favour.

The Department replied that the intention of the Bill was to provide a valuation to the government but not to the public. These positions do not fall into the position of institution listed in the Chapter 9 of the Constitution. So the issue of fear and without favour should be set aside.

The Chairperson asked the Department whether a Valuer-General and CEO would not be accountable to the public and whether these two positions should not be equated to the Chapter 9 Institutions positions. The Department noted with approval.

Mr Mileham explained to the Committee that integral to evaluation was independence of the Valuer-General, given that properties should be fairly and impartially evaluated without state interference.

Mr Swathe seconded Mileham and said that ICASA is another body that followed Mr Mileham's proposed procedure of appointment. Although the members of the Committee were of the view that the work of Valuer-General might not affect the public, they might have misjudged this role.

The Committee objected and requested the Chairperson to list his objection.

Mr Mileham, referring on clause 8(2), pointed out that the clause was lacking because it did not address the office of Valuer- General becoming vacant. He proposed an amendment here.

The Department replied that the Minister would, in the case of the office becoming vacant, have to appoint an acting Valuer-General. It was not comfortable with Mr Mileham’s recommendation. It requested the Committee leave the provisions as it is. Appointment of an Acting Valuer-General should be subject to the discretion of the Minister.

The Chairperson concluded that the Department should consider redrafting the provisions to include, when the office becomes vacant, the Minister should exercise his/her discretion to appoint an acting Valuer-General.

Clauses 9 and 10
The Department noted that Deputy Valuer-General was replaced by Chief Executive Officer (CEO). Clause 10 would be redrafted to clearly set out the responsibilities of the Valuer-General and CEO.

Clause 11
In discussion, the Committee was of the opinion that clause 11(2)(b) was clumsy. The phrase “with such qualifications” did not make sense in the paragraph. It was agreed that the phrase be removed.

Clause 12
Mr Mileham said that clause 12 failed to provide for a notice of intention to value the property. The Department replied that seven days to issue a notice of intention to value property would be inserted in the clause.

Clause 13
Mr Mileham stated that a person should not be required to disclose information that would disadvantage him/her.

The Department said it was not necessary to amend this because “may” rather than “must” was used.

The Department stated that clause 13(3) would be substituted with another paragraph that was read out by Ms Mahlaele.

Clause 14
This was approved as is.

Clause 15
Mr Mileham submitted an amendment for clause 15(1) that included a defined time frame for preparing a valuation report.

A reasonable time advanced by the Department and the Committee agreed to was six months.

Mr Mileham suggested an amendment of clause 15(2) to include the methodology used in drafting a report.

The Department replied that such inclusion was unnecessary. Methodology is always essence of the report. Therefore a report could not be made without being based on a particular methodology.

Clauses16, 17 and 18
These were approved by the Committee.

Clause 19
With respect to clause 19(4), Mr Mileham reminded the Committee that there was a submission that advised the Committee to remove the last part of the provision, namely “subject to any rights that may have accrued to a person as a result of the decision.” However, there was another submission that appealed to the Committee not to disturb the provision. Mr Mileham supported the latter submission and all the members of the Committee agreed with him.

Clause 20
Mr Mileham sought clarification to why the regulations made by Minister should not be approved by the Committee. The Department replied that the regulations are internal matters and there was no need to refer them to the Committee for approval.

Clause 21
The Department stated that the provision would provide that once the President has signed the Bill, the Bill will come into effect upon its publication.

The Chairperson, in his concluding remarks, said that the Department should be given an opportunity to redraft or amend and insert the Committee inputs and comments. The Department ought to make an A list of Committee proposed amendments and send the A list to the Committee the following day. The Committee would then consider and adopt the amended Bill.

Mr Mileham and Mr Swathe objected to the presentation of the Bill on the following day on the basis that there was not sufficient time for the Department to rework the changes to the Bill.

The Chairperson insisted that that the caucus would not change the mandate and the Bill was urgently needed. On the following day, the Committee would be able to look at the amended Bill that would include all changes made.

Mr Swathe requested that Members be given an opportunity to consult with their political party principals.

The Chairperson rejected the request. He informed Members that the meeting would be taking place at 08h30 the following day.

Committee Report on Public Hearings: Restitution of Land Rights Amendment Bill: adoption
The Committee adopted this report with only minor amendments.

Meeting was adjourned.


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