The Law of Property Valuation and Planning in South Africa

By A.J. JONKER

This book provides the knowledge needed for expert property valuation in line with the requirements of the Valuers Act. But the scope of its contents is not confined to the needs of the professional valuers and students; it will prove to be very valuable to all property people: estate agents, attorneys, quantity surveyors, architects, and property practitioners in general.

• Language: English
• Publisher: Partridge Publishing Africa
• Release date: Sep 26, 2014
• ISBN: 9781482803433

A.J. JONKER

The author is Dr. A.J. (Koos) Jonker who has been actively engaged in property valuation, development and planning since 1967. He holds the degrees of B.A. (Law) from the University of Stellenbosch, Management Development Programme for Real Estate Practitioners from the UNISA, Master of Economics from the University of Cape Town and a PhD. in Urban and Regional Planning from the University of the Free State. He has served as a founding member of the SA Council for Valuers, the National Executive of the Institute of Valuers and the board of directors of the Institute of Property Practitioners. He has lectured in Property Valuation at the University of Stellenbosch and the Cape Technikon and has appeared as an expert witness in numerous Supreme Court matters. He wrote and published books on Municipal Valuations in the Cape Province in 1980 and on Property Valuations in South Africa in 1983 which was updated in 1992.

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Copyright © 2014 by A.J. Jonker.

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Contents

Chapter 1 Fixed Property

1.1 INTRODUCTION

1.2 DEFINING FIXED PROPERTY

1.2.1 Ownership

1.2.2 Possession

1.2.3 Restrictions

1.3 PROPERTY RIGHTS

1.3.1 Traditional land rights in Southern Africa

1.3.2 Doctrine of Aboriginal or Native Rights

1.3.3 The South African Constitutional situation

1.4 THE CONTENTS OF THIS BOOK

Chapter 2 Market Value

2.1 DEFINING MARKET VALUE

2.1.1 Introduction

2.1.2 Willing Purchaser/Willing Seller

2.1.3 Normal transactions

2.1.4 Date

2.2 POTENTIAL

2.2.1 Quantification of value of potential

2.3 HIGHEST AND BEST USE

2.3.1 Definition of Highest and Best Use

2.3.2 Reasonable Probability

2.3.3 Physical Limitations

2.3.4 Economic Limitations

2.3.5 Legal Limitations

2.4 ONUS

2.5 BUILDING PLANS AFFECTING THE RIGHTS OF NEIGBOURS

2.5.1 The doctrine of legitimate expectations:

2.6 CONCLUSION

Chapter 3 Method Of Valuation

3.1 INTRODUCTION

3.2 DIRECT SALES COMPARISON

3.3 INCOME CAPITALISATION METHOD

3.4 THE LAND RESIDUAL METHOD

3.5 DISCOUNTED CASH FLOW

3.6 THE REPLACEMENT COST APPROACH

3.7 VALUATION OF LAND AND BUILDINGS SEPARATELY

3.8 OTHER METHODS OF VALUATION

3.9 CONCLUSION

Chapter 4 Planning And Land Values

4.1 URBAN PLANNING

4.1.1 The Changing World

4.1.2 Defining Urban Planning

4.2 HISTORIC URBAN PLANNING IN SOUTH AFRICA

4.3 PLANNING LEGISLATION IN SOUTH AFRICA

4.3.1 Background

4.3.2 National Level

4.3.3 Provincial Level

4.3.4 Local Level

4.3.5 Need for a new system

4.4 THE NEW SYSTEM

4.4.1 The Government Structure

4.4.2 The Development Facilitation Act (1995)

4.4.3 The Municipal Systems Act

4.4.4 Integrated Development Planning

4.4.5 Provincial Legislation

4.4.6 Local Authority Planning

4.4.7 Zoning schemes

4.4.8 Responsibilities of local authorities

4.4.9 Planning Decentralisation

4.4.10 The Spacial Planning and Land Use Management Act

4.5 PLANNING FOR ECONOMIC PRODUCTIVITY

4.5.1 Local Economic Development

4.5.2 Planning and Economics

4.5.3 The free-market revolution

4.5.4 Free-market critics

4.5.5 The South African free-market revolution

4.5.6 The compromise

4.5.7 Optimisation of land use

4.5.8 Infrastructure-led Development

4.6 PLANNING AND THE ENVIRONMENT

4.7 SUMMARY

Chapter 5 Compensation For Expropriation

5.1 INTRODUCTION

5.2 EXPROPRIATION LEGISLATION AND CASE LAW

5.2.1 The Expropriation Act

5.2.2 Actual Financial Loss

5.3 EXPROPRIATION v DEPRIVATION

5.4 COMPENSATION UNDER THE CONSTITUTION

5.4.1 The Pointe Gourde Principle

5.4.2 When Must Compensation Be Paid

5.4.3 Delayed Payment of Compensation

5.5 VALUATION OF A PORTION OF LAND

5.6 COMPENSATION FOR AN EXPROPRIATED RIGHT

5.7 MINING RIGHTS: THE NEW MINERALS ACT

5.8 CONCLUSION

Chapter 6 Compensation For Restitution

6.1 LAND REFORM AND EQUITABLE COMPENSATION

6.2 THE RICHTERSVELD SAGA

6.3 LEGISLATION

6.4 FAIR COMPENSATION

6.4.1 The market value of the land

6.4.2 The current use of the land

6.4.3 The history of the acquisition and use of the land

6.4.4 The extent of direct State Investment and subsidy in the acquisition and use of the land

6.4.5 The purpose of the expropriation

6.5. INTEREST ON DELAYED PAYMENT

6.6 CONCLUSION

Chapter 7 Further Legal Facets Of Valuation

7.1 INTRODUCTION

1.2 THE EXPROPRIATION BILL 2013

7.3 VALUATION FOR MUNICIPAL RATING

7.4 ADJUDICATION OF VALUES

7.4.1 Quasi Judicial Bodies

7.4.2 Arbitration

7.4.3 Mediation

7.4.4 Judge as Valuer

7.4.5 Evidence

7.5 REASONS

7.6 VALUATION REPORTS

7.7 CONCLUSION

Chapter 8 Valuation Of Different Kinds Of Properties

8.1 UNIMPROVED LAND

8.2 SINGLE RESIDENTIAL PROPERTIES

8.3 GENERAL RESIDENTIAL PROPERTIES

8.4 INDUSTRIAL PROPERTIES

8.5 COMMERCIAL PROPERTIES

8.6 AGRICULTURAL LAND

8.7 TOWNSHIP LAND

8.7.1 Potential Township Land

8.7.2 Townships

8.7.3 Approved Township Land

8.8 SPECIAL PROPERTIES

8.9 HOTEL VALUATIONS

8.10 CONCLUSION

Book References

Case References

CHAPTER 1 FIXED PROPERTY

1.1 INTRODUCTION

The choice of the name of this book emanates from the subject of property valuation which in itself is significantly affected by town and regional planning, economic forces of demand and supply and legal prescriptions set down by legislation and case law.

The determination of the value of a piece of real estate may primarily appear to be a purely economic exercise in which the influence of the forces of demand and supply would play the major role. It should entail only an analysis of the behaviour of buyers and sellers in the marketplace. This, in any event, is the normal approach adopted by the layman when considering this subject.

In reality there are numerous other aspects which influence the value of land. There are aspects of macro and micro economic influences, planning rights and expectations as well as numerous legal aspects, including laws, ordinances and common law relating to aspects which influence the behaviour of the market.

Certain aspects of legislation and law relating to property have been adhered to in South Africa for many generations. Legislation and common law relating to property valuation has developed relatively more recently – during the past 100 years while legislation and practice relating to urban and regional planning, particularly in the field of environmental sustainability has become more prominent under the new democratic political dispensation. The law relating to property ownership and valuation practice is uniformly applicable throughout the country, but planning law and practice is still somewhat fragmented with three Provinces still operating under outdated planning legislation (and practice) until 2014¹. Case law on property valuation is voluminous and has laid down many apt and noteworthy norms and principles, particularly in matters where the relevant statutes have not distorted the general concept of value.

The acceptance of, initially the interim constitution and later the South African Constitution has introduced a new approach to the ownership of property, planning law and the legal concept of value for expropriation and deprivation purposes. A comparative study between the pre- constitution and post constitution has been done.

Although much has been written about the concept of value, it has been found necessary to consider it in a thoroughly South African context.

1.2 DEFINING FIXED PROPERTY

A definition of ‘property’ will entail a complicated legal issue.² Since the introduction of the new constitutional order, with the property clause in the Bill of Rights the term ‘property’ may denote a variety of legal relationships qualifying for protection under the Constitution. This work is primarily concerned with immovable property which is land and everything that is attached to land.³

Physically immovable or fixed property constitutes a piece of the surface of the earth. All creatures, plants and living organisms benefit from some form of use of the surface of the land and the oceans. The concept of ownership of land has only really evolved over the past less than 3,000 years⁴ which, in the history of the earth, makes it a relatively modern concept. The Romans started to define land use and the value of land ownership just over 2,000 years ago. In many parts of the world the concept of land ownership has been introduced less than 500 years ago. Previously land ‘belonged’ to nobody – just like we view ‘ownership’ of the greatest parts of our oceans.

The physical attributes of a piece of land is only one aspect of ‘ownership’ or ‘value’. Ownership of land is basically a legal concept while the value thereof is a legally defined economic concept.

In South Africa a strong distinction is drawn between real rights and personal rights. By and large real rights are those that are registered in the Deeds Office while personal rights to fixed property (land) are unregistered rights like options, short term leases and purchase or sale agreements.⁵

A very important value influencing right on land is zoning – the legally permitted/restricted use of the property. The legal use that the real estate may be put to is usually limited by restrictions of use, laid down by central, provincial and local government. These restrictions are referred to as zoning or town-planning restrictions and permissions. There are also often limitations of use prescribed in the title deed – providing real rights/restrictions.

Factors of use limitation or restrictions are found in a myriad of laws, ordinances, by-laws and proclamations, a field wherein the environment is playing a growing role. There are also common law restrictions structured by court decisions.

Property has become a Constitutional Right and is therefore protected by the Constitution.⁶ The definition of property in section 25 of the SA Constitution does not limit the concept to land thus the distinction between real and personal property rights is not considered in the Constitution. In the FNB⁷ case the Constitutional Court indicated that it was impossible to define property comprehensively for purposes of section 25 and restricted itself to the statement that ownership of corporeal movables and of land is at the heart of the constitutional property concept but found it practically impossible and judicially unwise to attempt a comprehensive definition of property.⁸

The constitutional meaning of property involves two aspects: the objects of property rights and the content and scope of property rights. As far as property as a right is concerned, private law property in the Roman-German systems is traditionally associated with full ownership as opposed to other, lesser real and personal rights in property. As far as the object of the right is concerned, private law property is traditionally restricted to corporeal things in the Roman-Germanic systems and was traditionally regarded as the most complete real right, characterized by its absoluteness and exclusivity. The absoluteness principle presents a potential problem for constitutional interpretation because of its inhibiting implications for regulatory exercises of the state’s police power.⁹

1.2.1 Ownership

In South Africa proof of ownership of land can be found in the Deeds Office where each parcel of real estate is registered. Each registered property includes a surveyed diagram as an efficient system of registration of title to land would be impossible unless each registered unit of land is surveyed and represented on a diagram or general plan.¹⁰

Special attention has been given to ownership of land as it is an issue of no small importance. Land, land rights and immovable property are concepts that should be clearly identified. Urban and regional planning is one of the control mechanisms of land rights.

The use and acquisition of fixed property is different from that of movable goods.¹¹ In legal terms fixed property is regarded as being immovable and as such it is governed by a particular set of legal rules. The legalities of land use and ownership has a long history and the legalities thereof, as far as South Africa is concerned, may be traced to the Roman Empire.¹²

Land is a basis of material and psychological security and the way in which the law determines a system of tenure is a matter of immediate consequence to everyone. In Roman times land ownership was often referred to as being ‘absolute ownership’ which implied that the Roman owner was free from restrictions in relation to the things that he owned. It should however, be immediately obvious that no community could tolerate an entirely unrestricted form of ownership.

The right to have exclusive physical control of the property is the basis of the entire superstructure or basis of ownership. There are two aspects to this right: in the first place, the right to be placed in control, and secondly the right to remain in control. This incident of ownership is indeed the very one which has changed the least since the time of classical Roman law. Restrictions on the owner’s right to control the property may be self-created, as in the case where he has granted someone else the right to control the property by virtue of a lease, and so forth.

Many legal systems experience tension between the sanctity of ownership and the security of transactions. South Africa has one of the best systems of land registration in the world. It is however not the intention of this work to elaborate fully on this system as it would entail a very comprehensive study on its own.

1.2.2 Possession

Possession has been described as a "compound of a physical situation and of a mental state involving the physical control of a thing by a person and that person’s mental attitude towards the thing."¹³ Although ‘possession’ and ‘ownership’ are often used as synonyms in everyday speech, they are two quite distinct concepts to the jurist. Possession denotes the factual control of a thing, irrespective of whether the person concerned has any legal right to that thing, whereas ownership implies the legal basis for control of something.

Possession often constitutes an entitlement flowing from some or other right that the possessor has. It often forms part of the contents of a specific right in the sense that a person may possess a thing by reason of that person having a right to the thing concerned.¹⁴ Possession of land is usually controlled by lease agreements.

1.2.3 Restrictions

The (Roman) ‘Twelve Tables’ contained restrictions in respect of buildings, for example as to the spaces between buildings, and prohibited the demolition of buildings without official permission. Numerous limitations existed at private law, imposed mainly in the interests of neighbours. In contemporary society most of these kinds of restrictions and controls are enacted by legislation and controlled by local and central authorities. These right limitations are akin to zonings. This often poses problems to lawyers as the legal fraternity basically sees land ownership in the context of the registration of rights in the Deeds Office.

Similarly, legislation dealing with various aspects of property, some of which were peculiar to South Africa (for example, The Group Areas Act) has had a profound effect on the development of cities, notwithstanding the fact that racial legislation has been repealed. It is deemed unnecessary to consider this legislation in detail, although mention of some of these laws are made where necessary in dealing with particular aspects of land economics, or where this and similar legislation have left lasting imprints.

Section 25 of the SA Constitution recognises that the right to property is not absolute. Section 25(1) provides that [n]o one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property. The court held in Wary Holdings v Stalwo¹⁵ that, at common law, property owners have rights (dominium) to determine the manner in which their property is used. But these rights have for practical purposes never been unfettered. They have been limited by the common law and legislation to ensure that land ownership is regulated in a manner that is in the interest of all. In congested urban spaces, this need for regulation is particularly acute. Zoning or town-planning schemes are one of the key ways in which the rights of property owners are limited.¹⁶ They often provide for the maximum height of buildings in an area. They also often limit where a building may be built on an erf and the use to which properties may be put in urban areas. These are all limitations on the right of ownership.¹⁷

1.3 PROPERTY RIGHTS

It is generally accepted that property rights in active market economies are complex things. They comprise a wide range of rights ranging from short term personal rights to long term real rights..¹⁸ Countless types of property rights are defined and protected, from real estate and moveable property to new ideas and inventions. A real right is a claim of a legal subject of a thing as against other persons.¹⁹ The Roman law knew only a closed system of real rights being a limited number of real rights namely ownership, servitudes, pledge, mortgage, a building grant, and perpetual lease. In South African law there is no closed system of real rights, thus new real rights can develop. Besides ownership the categories of real rights which are most frequently encountered in practice include servitudes, restrictive covenants, mortgage, pledge and registered leases.

The distinction between real and personal rights forms the basis for the division of the law of property into the law of things and the law of obligations. In practice the distinction is important in the context of the registration of real right in respect of land in the deeds office. Real rights are concerned with the relationship between a person and a thing, whereas personal rights are concerned with the relationship between two persons. Real rights are characterised by a direct bond between the subject and the thing, without any reference to any other person. A real right is adequately protected by its registration in the Deeds Office in terms of the Deeds Registries Act.²⁰

Property rights include the right to use an asset, to permit or exclude its use by others, to collect the income generated by the asset, and to sell or otherwise dispose of the asset. In market economies these rights are defined in law. Yet many of these rights are limited by restrictions on use, pledge, and even ownership. Land use is often subject to strict controls, with prohibitions or high costs of change or transfer. These restrictions affect the demand of the property and hence its value.

In Fine Wool Products of South Africa Ltd v Director of Valuations²¹ a municipality had sold land to an industrial concern subject, amongst others, to the condition that if the transferee should sell any portion of the land at any time to any associate or industrial concern the price thereof shall not exceed the price paid by the transferee when the land was first acquired. This restriction was disregarded in the assessment of the value of the land for rating purposes and the assessment was based on the value of the land in the open market which exceeded the price paid for it. The court upheld the assessment on the basis, amongst others, that the restriction did not amount to a perpetual burden on the land as the language of the deed indicated that it was imposed only on the original purchaser and would not bind a subsequent owner of the land.

The US valuations handbook²² describes ‘ownership’ of land as a ‘bundle of rights’. It is therefore correct to regard one right as consisting of various other rights or duties²³. The mere fact that one of the rights comprising ownership may be transferred to another person, for example the right to possess the property pursuant to a lease, certainly indicates that the possession of the owner is a substantive right in itself. Merely because the owner has the right to possess something should not deprive possession of its character as a right. Possession does not change its nature simply because it is transferred for a limited period to someone else.

It is submitted that the property market deals in the rights relating to real property rather than the land and buildings themselves.²⁴ van der Walt²⁵ also alludes to the concept of a bundle of rights. The view that ownership is a bundle of various rights, duties, and liberties may well give rise to the argument that ownership has no content, or meaning, in itself that it is but a shell housing various rights, duties and so forth. To adopt this approach would, however, be tantamount to ignoring the incident of residuary for one may part with all the incidents or rights of ownership and still remain the owner. van der Walt & Pienaar²⁶ refer to property rights as ‘entitlements’: ²⁷

In mature market economies the distribution of property rights across the population and the legal forms through which they are exercised is relatively stable, having evolved over centuries. This is not so in many developing countries.

1.3.1 Traditional land rights in Southern Africa

Indigenous law is now an integral part of South African law depending, for its ultimate force and validity, on the Constitution²⁸. A large part of South Africa is community owned. This communal ownership or communal tenure of land emanates from the incorporation of the previous so called national self-governed states under the previous ‘Apartheid’ rule. This system of communal land rights allows residential and agricultural use in certain areas while the remaining areas are designated as common land for grazing or the extension of residential or agricultural use.²⁹

Gutto³⁰ sketches some of the historical approaches of land rights as exercised by African nations in Southern Africa, concentrating mainly on the transformations brought about by colonialism. He argues that when colonialism came to the sub-continent, land ownership was taken from the African by virtue of the argument that, … in Africa, there is no clear definition of ownership.³¹ This aspect was also discussed in the Richtersveld cases³². The argument that ownership was not defined in the era prior to colonialism is because ownership of land was not documented. There were areas where land was allocated to ‘chiefs’ who in turn would allocate specific areas to his subjects. This system is still to be found in the Eastern Cape and some other areas which were considered as ‘native’ reserves prior to the Constitution.

Summing up the main characteristics of indigenous systems of land-holding, Gutto feels that, generally these are devised to meet the needs of subsistence agriculture and depend on a sufficiency of land to allow a rotation which includes a long period of fallow and that:

• Land is held on kinship, and/or a local group basis.

• Individuals have definite rights, but these are qualified by membership of a family, kindred and ward or small village.

• Similarly, the individual claims of families exist concurrently with the wider claims of the clan or local group.

• The chief is the custodian of land, but not its owner.

• The normal unit of land ownership is the extended family, or kindred.

• Land once granted to a family remains the property of that family, and the chief has no right to any say in its disposal. This constitutes a definite limitation on the conception of land as the collective property of the tribe or local group.

• The kinship basis of land-holding ensures social stability, but the absence of individual proprietary rights prevents the raising of money on land.

• Land may be pledged and redeemed at any time.

• The principle of redeemability ensures that land shall not be permanently lost.

It is submitted that the technical definition of ‘ownership’ is irrelevant in this regard. The important issue is ‘land rights’ or ‘rights in land’. It is submitted that the historical tribal system relating to land, constituted a definite recognition of ‘land rights’ comparable to that of the Colonialists themselves, but merely in a different way. This is quite different to the approaches of the original Indian tribes in America where land rights were not allocated to individuals or in communist countries where land belongs to the State. However, although on different grounds, it must be accepted the Colonialists unjustly took tribal lands away with the argument that the land did not ‘belong’ to the African tribes, as pointed out by Gutto.³³

1.3.2 Doctrine of Aboriginal or Native Rights

Aboriginal title originated in precolonial systems of indigenous law. It is enforceable in the ordinary courts, but is not protected from extinguishment by legislative act. Aboriginal title is not an individual proprietary right but rather a communal right vesting in an aboriginal people. Aboriginal title is inalienable to anyone except the Crown or state government.

The view taken by the previous governments relating to indigenous law was discussed in some detail in the Supreme Court of Appeal case of the Richtersveld Community v Alexcor & Another.³⁴ The matter concerned a claim for restitution under the provisions of the Restitution of Land Act.³⁵ This Act contains a wide description of a ‘right in land’³⁶. The SCA held that the definition includes ‘a customary law interest’. An interest in land held under a system of indigenous law is thus expressly recognised as a ‘right in land’, whether or not it was recognised by the civil law as a legal right. It was held that; first, uninterrupted presence on the land need not amount to possession at common law for the purpose of an indigenous law right of occupation. Second, a nomadic lifestyle is not inconsistent with the exclusive and effective right of occupation of land by indigenous people. At the time of annexation the Richtersveld people had a customary law interest under their indigenous customary law entitling them to exclusive occupation and use of the subject land and that this interest was akin to the right of ownership held under common law.

The only requirement for the acquisition of aboriginal title is that the indigenous community must have had exclusive occupation of the land at the time when the Crown acquired sovereignty. According to the doctrine of aboriginal title the antecedent rights and interests in land held by indigenous inhabitants survived the coloniser’s acquisition of sovereignty and dominium. In their article, Aboriginal Title in South Africa Revisited,³⁷ the authors point out that the courts in other jurisdictions themselves concede that aboriginal title does not conform to the typical common-law concepts of property, and they freely admit that it is sui generis. The authors refer to the following distinguishing features between common law property rights and aboriginal title. Aboriginal title originated in precolonial systems of indigenous law. It is enforceable in the ordinary courts, but is not protected from extinguishment by legislative act. Aboriginal title is not an individual proprietary right but rather a communal right vesting in an aboriginal people. Aboriginal title is inalienable to anyone except the Crown or state government.

The courts that have recognised aboriginal land rights but have at the same time recognised that the Crown or State always had the power to extinguish aboriginal land rights. Termination requires appropriate legislative authority showing a clear and unequivocal intention to extinguish or to make the land over to others.

All the aspects of the doctrine do not fit comfortably into our common law. For instance, the idea that the State or Crown possesses radical title to all land may have its origin in English feudal law and may be foreign to our law. The court held that it was not necessary to pursue the matter any further and it became unnecessary to decide whether the doctrine forms part of our common law or whether our common law should be developed to recognise aboriginal rights. The court pointed out that indigenous rights in land were recognised at the Cape even in the time of the Dutch East India Company.³⁸

When the British Crown acquired sovereignty of the Cape Colony by conquest and cession in 1806 the indigenous land rights of the inhabitants were recognised and respected. There is a presumption that, in the case of both conquest and cession, a mere change in sovereignty does not extinguish the private property rights of the inhabitants of a conquered territory which continue in force unless confiscated by an act of state. The Privy Council has held, and the Constitutional Court has agreed³⁹, that a dispute between indigenous people as to the right to occupy a piece of land has to be determined according to indigenous law "without importing English conceptions of property law." This has been referred to as the doctrine of continuity⁴⁰.

Harrison⁴¹ aptly argued that planners, with their emphasis on ‘rational’ ordering and decision-making, are poorly equipped in dealing with non-modernist or traditional forms of land tenure, traditional authorities, complex cultural practices and traditional resource management systems. With their modernist mind-sets planners often relegate these to ‘irrational’ beliefs and practices that retard progress.

Regarding the legal theory of land ownership there are three aspects that merit special emphasis:

• It must be recognised that ownership of land constitutes a ‘bundle of rights’ in which the permitted land use constitutes a major value influencing factor, and,

• The importance of ownership is dissipated if the owner cannot retain security of tenure.

• The use to which land may be put is usually the most important value determining right. These rights are conferred by planning regulation.

1.3.3 The South African Constitutional situation

van der Walt⁴² summarises the Constitutional influence on property rights as follows:

• Insofar as South African private law subscribes to the Roman-Germanic tradition, the private-law interpretation of property will differ from the constitutional meaning of property in section 25.

• The difference between the traditional private-law meaning and the constitutional meaning of property implies that the objects of property rights in section 25 are not restricted to corporeal things or to ownership; and these rights are not absolute or exclusive, because they can be and are inherently limited in accordance with the property clause and the Bill of Rights.

• For the purposes of section 25 ‘property’ can therefore relate to a wide range of objects both corporeal and incorporeal, a wide range of traditional property rights and interests both real and personal, and a wide range of other rights and interests which (in the civil-law tradition) have never been considered in terms of property before⁴³.

• The exact range of objects and rights that can or should be included under the property clause might be determined, in every individual case, with reference to a general principle or guideline for the interpretation of the whole Bill of Rights, such as the promotion of the values that underlie an open and democratic society based on human dignity, the achievement of equality and freedom or the just and equitable balance that has to be struck between the protection of private interests and the promotion of the public interest.⁴⁴

From a practical point of view it must be noted that:

• South Africa has a sophisticated and excellent system of Deeds Registry, which must not only be retained, but could also be expanded by the use of modern technology.

• South Africa has vast numbers of poor urban residents who do not enjoy the privilege of land ownership. One of the certainties of the future is that urbanisation will continue at a high rate for the foreseeable future.

• Cities are where the majority of the population will reside. They constitute a mixture of sophisticated first world suburbs and centres and third world suburbs. There are vast differences in levels of socio-economic classes in these cities.

Constitutional dispensation concerning property and land rights provide only the legal framework upon which land tenure is developed. Such provisions are not by themselves the core of what a land tenure system may look like. The Development Facilitation Act⁴⁵ urges that land development should result in security of tenure and should provide for the widest possible range of tenure alternatives, including individual and communal tenure, and where land development takes the form of upgrading an existing settlement, it should not deprive beneficial occupiers of homes or land.⁴⁶ It is submitted that such legal framework should not only be facilitative, but also protective of these rights.

It is recognised that the registration of land in the Deeds Office and the diagrams in the Office of the Surveyor General are of great importance in the protection of property rights. The importance of non-registered property rights should not be underestimated. These non registered rights may be noted where zoning and planning provisions have a substantial effect on property values and in the informal settlements where occupational use is the prime factor of rights to which land value may be attached.

Land values are not only affected by rights on each particular piece of land, but also the land use and rights of adjacent and neighbouring properties. While efforts are needed to alleviate the vast class differences in urban society, it is important that overall and wider planning is properly executed to be able to retain land values.

It is submitted that property rights are as important as ownership and should therefore be protected on a similar basis. The right of use, which is usually governed by zoning, should be seen as a right in land and should be protected as such. Compensation must be paid for any loss of value to a property or right in property caused by any planning action of the authorities.⁴⁷ Thus if an adjacent or nearby re-zoning causes a decrease in value to a property then the owner should be compensated for this diminution of value on the basis of the difference between the market value of the property prior to the re-zoning and the market value after re-zoning. This is not a novel concept as it was provided for in the previous Cape Townships Ordinance⁴⁸ and in our Appellate division:

Grond word onteien wanneer die regte van die eienaar daarvan onteien word.⁴⁹ [Land is expropriated when the rights of the owner are expropriated.]

This reference was made to a farm that was expropriated shortly after the water rights thereon had been taken away and the State wanted to pay dry land value to the owner. The taking of such rights is now protected by section 25 of the SA Constitution.

Planning regulation represents a fundamental effect on the rights of property owners. They can deprive the landowner the freedom to utilise the land as he wishes and they can confer rights that have a materially beneficial value on the land. The premise that the social obligations of land ownership create and justify a measure of government regulation of the exercise of the rights of ownership in land is vital to this the concept. The planning process in South Africa has changed substantially since the advent of the Constitution.

1.4 THE CONTENTS OF THIS BOOK

Chapter 2 considers the concept of the market value of property, looking