President Cyril Ramaphosa assented to the Expropriation Act 13 of 2024 on 24 January 2025, marking a significant development in South Africa’s evolving land reform framework. The Act aims to provide for the expropriation of property for a public purpose or in the public interest, and to regulate the procedures and principles governing such expropriation, including the determination of compensation. Importantly, it identifies certain circumstances where nil compensation may be considered just and equitable — a concept that has generated considerable debate since its first proposal in the context of constitutional land reform.
The Expropriation Act replaces the Expropriation Act, 1975 (Act No. 63 of 1975), bringing the legal framework for expropriation into alignment with the Constitution of the Republic of South Africa, 1996, and the principles of administrative justice and fair compensation under Section 25, often referred to as the “property clause.” Section 25(2) of the Constitution provides that property may be expropriated only for a public purpose or in the public interest and subject to compensation that is “just and equitable”, reflecting a balance between the public interest and the interests of those affected. The new Act clarifies how these constitutional principles should be applied in practice, particularly in cases where the payment of compensation may not be warranted.
The Nil Compensation Debate
The inclusion of provisions for nil compensation has reignited a longstanding national debate about the balance between land reform objectives, constitutional property rights, and economic stability. The Act sets out a limited number of circumstances where expropriation without compensation may be just and equitable — for example, where land is held for speculative purposes, abandoned, or where the state has previously invested significantly in its improvement. These provisions are not intended as blanket authorisations for uncompensated expropriation, but rather as exceptions requiring strict justification in the public interest.
The Act’s implementation raises important questions about how courts will interpret and apply “just and equitable” compensation in the context of nil compensation. Until judicial guidance is provided, uncertainty remains as to how these provisions will function in practice. It is against this backdrop that a test case has emerged, likely to shape the future of South African expropriation law.
The Ekurhuleni Test Case
The Ekurhuleni Metropolitan Municipality (“the Municipality”) recently expropriated a 33.6847-hectare property, Portion 406 of the Farm Driefontein, from Business Venture Investments 900 (Pty) Ltd, offering no compensation. The Municipality intends to utilise the property for a social housing project, citing the public interest in advancing access to adequate housing — one of the core objectives underpinning South Africa’s land and housing policy.
While the property owner does not dispute the lawfulness of the expropriation itself, it is contesting the nil compensation component, seeking market-related compensation instead.
In February 2019, the Municipality published its Notice of Expropriation, offering no compensation. The property owners submitted a claim for R30,050,000.00, slightly above the Municipality’s 2017 valuation of R26,438,000.00. Over subsequent years protracted legal correspondence and procedural disputes followed. In 2020, after the owners compelled the Municipality to make an offer, the Municipality formally rejected the claim, maintaining an offer of R0.00. By 2024, an independent valuation placed the market value at R64,000,000.00 — underscoring the stark difference in valuation perspectives.
A Constitutional Crossroads
This dispute will test the constitutional boundaries of Section 25, particularly whether nil compensation can satisfy the requirement of “just and equitable” compensation under the Constitution. The case also highlights broader issues of administrative rationality, valuation methodology, and the balance between land reform imperatives and investor confidence.
Mediation between the parties is scheduled for October 2025, followed by an 18-day trial in February 2026. The outcome is expected to have far-reaching implications — not only for landowners and municipalities but also for public policy, economic stability, and future land reform jurisprudence.
Conclusion
The Ekurhuleni matter represents one of the first significant legal tests of the Expropriation Act 13 of 2024. It will likely determine how courts approach compensation disputes, the threshold for nil compensation, and the interpretation of public interest in the context of property rights.
While the political and economic discourse surrounding expropriation without compensation often generates more heat than light, the judiciary’s interpretation in this case may provide much-needed clarity and legal certainty — both for the state and private property holders navigating South Africa’s evolving land reform landscape.
For further information or queries, please contact Siyanda at siyanda@caf.co.za or 021 674 2083.
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