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New Land Ownership Rights In Tbvc Areas Set To Affect Developers

Legally speaking  NEW LAND OWNERSHIP RIGHTS IN TBVC AREAS SET TO AFFECT DEVELOPERS The suggested changes to the Upgrading of Land Tenure Rights Act of 1991 ULTRA set out in the Land Tenure Rights Amendment Bill form part of a labyrinth of South Africa's land reform legislation, says Sihle Bulose, Senior Associate at the global law firm CMS. "This is unique in the sense that our country's land ownership system is not straightforward. We have laws that are tryiktojaclo wIAlifirsiiku done."  

Sihle Bulose is a corporate lawyer at CMS South Africa, who advises fisted and unlisted clients on mergers and acquisitions, corporate restructuring and general commercial matters. He also assists with legal due diligence investigations, and regularly helps multinational firms establish a presence in South Africa and the rest of Africa. I've has worked with South African and multinational dents in various sectors, including financial services, red estate, infrastructure development, telecommunications, mining, energy, consumer goods and the public sector.

The ULTRA formed part of a progressive movement away from the apartheid era and the unjust land ownership system. ULTRA was aimed at providing better ownership or full ownership of land rights to citizens within township and rural areas. "The apartheid era laws provided for leasehold rights in black townships," says Bulose. The ULTRA provides a legal process for these leasehold rights to be automatically converted into ownership rights if a township had a township register a separate system, but similar to the Deeds Office. A validated township register assisted with converting these rights into ownership. "What the occupants of these properties often have is a certificate," says Bulose. "This would have been issued by a municipal or land authority during the apartheid era. These certificates were usually made out in the name of a male relative, who were often favoured by legislation." Applicants in rural areas who were granted the permission to occupy land during the apartheid era can use the ULTRA to convert this permission to occupy into full ownership by making a formal application for a title deed at the relevant Deeds Office. Applicants in tribal areas who occupied land that was owned by a tribe can also convert tribal land rights into full individual ownership rights but they are first required to apply for a conversion, which would only be approved by a resolution of their tribal council. "There were restrictions within the first 10 years of these tribal land conversions," says Bulose. "The applicants could not sell or alienate the land. Following this, they were free to deal with the land as a tribe as they saw fit."  

Legally speaking  Two recent court judgments have prompted Parliament to review ULTRA In the Rahube case, Mantshabelle Mary Rahube resided with her brother, Hendsrine Rahube, who sought to evict her. He relied on the right that was converted in terms of the ULTRA, which entitled him to full ownership of the property In 2018, the Constitutional Court ruled in Mantshabelle's favour. Because she had resided on the property for more than 30 years, the court noted that it was prejudicial for her as a woman to be removed from the property By providing automatic registration of these rights and not allowing for competing claims, the conversion process set out in the ULTRA in most instances prejudiced all women. The Constitutional Court ordered Parliament to reopen this process for any conversions implemented on or after 27 April 1994 to ensure that all applicants had the opportunity to compete for the conversion of these rights. In 2019, the court held in the Herbert case that Section 25A of the ULTRA was unconstitutional to the extent that it excluded the application of certain provisions of ULTRA in the areas previously known as Transkei, Ciskei, Venda and Bophuthatswana. "One of the anomalies about the ULTRA is that when it was originally passed in 1991, it did not apply to the whole of South Africa as defined today," says Bulose. "Transkei, Ciskei, Venda and Bophuthatswana had a greater level of autonomy during apartheid when compared to other homelands.

They were excluded from the application of this piece of legislation." The Rahube judgment states that we need to avoid upending transactions and arrangements with third parties that were agreed upon in good faith. Bulose says that, from a property perspective,  Mantshabelle Mary Rahube resided with her brother, Hendsrine Rahube, who sought to evict her. He relied on the right that was converted in terms of the ULTRA, which entitled him to full ownership of the property. 

The National Assembly has passed the Upgrading of Land Tenure Rights Amendment ULTRA Bill which was approved during the hybrid plenary held on Tuesday, the 1st of December 2020. The bill was necessitated by two orders of the Constitutional Court which found that the Upgrading of Land Tenure Rights Act, 1991 Act No. 112 of 1991 as amended was unconstitutional because it "discriminated against the rights of women to independently own property" and that ULTIUs Section 3 was inapplicable in the former apartheid homelands of the Transkei, Bophuthatswana, Venda and Ciskei formerly known as the TBVC states . Section 25 5 and 9 of the Constitution of the Republic of South Africa places an obligation on Parliament to pass legislation that ensures that a person or community whose tenure is legally insecure as a result of the past, racially discriminatory laws or practices, is entitled to either tenure that is legally secure or comparable redress. The bill was referred to the Portfolio  , 1 any challenge to property rights converted in terms of the ULTRA could be a cause of concern. However, there are exceptions to the proposed Amendment Bill. "If I were a developer who previously purchased land from an owner with land rights converted in terms of the ULTRA, this would be something that would worry me," says Bulose. "But if I can show that, at the time of the land acquisition, I had proper diligence in place and I was acting in good faith, then the claim should not affect me." In this instance, he believes that the government may provide an alternative remedy, such as compensation to the applicant who was unfairly discriminated against. In the case of a property developer who acquired land from a male descendant whose property rights were converted in terms of the ULTRA, the property developer needs to prove that the male descendant was in possession of a title deed issued in terms of the ULTRA and that he was entitled to pass some form of ownership or tenure on to a third party.

In this case, it would be difficult in Bulose's mind for a court to rule against the property developer. From the commercial property sector's perspective, it is unlikely that a shopping centre will be built on someone's private land. Usually, shopping centres are built in areas of a township that are owned by the municipality and, from this perspective, there would be less of a risk. "The potential challenge of ownership rights converted in terms of the ULTRA could be something that has a negative impact for developments that were done previously," says Bulose. "But looking forward, it is something positive because there is a predefined process in place and, if no objections have been raised during the process, developers can rest assured that there won't be any further claims" Bulose believes that developers should be aware of other existing land reform legislation, particularly in the rural land context. This includes the Extension of Security of Tenure Act of 1991, which protects employees who have resided on land for extended periods of time, for example. "If I were a developer, I would undergo the verification process of ensuring that there are no gazetted land claims made in respect of the land I wish to acquire or develop," he says. "You can do so by lodging queries with the department and reviewing the Government Gazette. "It is about giving people secure tenure and allowing them to economically exploit their land this is the main issue." Bulose says that because of Covid19, the passing of the Amendment Bill has been delayed.

The approved amendment also   Legally speaking  depends on sufficient public comment, and whether any changes need to be made. South Africans can expect to wait at least another six months for the Bill to be signed into law. "Parliament may need to publish the regulations that govern the process for competing claims," says Bulose. "If you introduce a piece of legislation without the regulations in place to give practical guidance, this could be considered irrational."  ULTRA AMENDME T BILL WILL DEPRIVE MILLIONS OF PROPERTY RIGHTS  "The Upgrading of Land Tenure Rights Act, ULTRA, is arguably South Africa's most important law, yet very few know about it. If the ULTRA Amendment Bill now before Parliament is enacted, it will cause the biggest expropriation without compensation ever, perhaps 4m homes impacting 16m low income black people" said the Free Market Foundation's Leon Louw at a recent Free Market Foundation FM F media briefing webinar this week.  T . C, he Constitutional Court ordered the Amendment due to a misunderstanding that the original 1991 Act discriminates against women.

This is untrue. The Amendment should be scrapped, said Louw" The FMF's Khaya Lam My Home Land Reform project has been successfully using ULTRA to issue title deeds to rightful owners for 10 years. In 1991 ULTRA automatically created property ownership for millions of victims of apartheid land dispossession by providing that "the ownership of land shall vest exclusively in the person who, according to the register of land rights ... was the holder of that land ... immediately before the act ." All that remained was to give people title deeds. This meant that factually and legally, land holders became owners at the stroke of the statutory pen. The number affected remains unknown but is likely to be millions. Most recipients were and remain unaware of being owners. Clause 1 of the Amendment Bill would retroactively dispossess   


Portrait of Sihle Bulose
Sihle Bulose