Property laws imperil plans worth billions

This is an extremely important Article in my opinion.  There needs to be a uniform path that Property Developers walk in order to reach the goal of creating new developments.  I believe that it is the intention behind SPLUMA that the myriad of Acts and Ordinances applicable across South Africa be consolidated to a certain extent.  However, it is not only the Planning Laws as such that need to be streamlined but all the extraneous legislation that impacts on the process.

Gareth Shepperson
Commercial and Property Attorney

Property laws imperil plans worth billions

Legislative delays and bureaucratic legislation were placing billions of rand in new property developments at risk of being scrapped, the SA Property Owners Association (Sapoa) has warned.

Neil Gopal, the chief executive, said this week that the country could not afford these delays, especially with high unemployment and lacklustre growth, and the issue needed to be addressed urgently.

Gopal said the commercial property sector and related construction industry made a significant contribution to the economy and should not be underestimated because it would be a key contributor to achieving the goals of the National Development Plan.

Two pieces of legislation are of particular concern to Sapoa: the Spatial Planning and Land Use Management Act, which essentially replaces the Development Facilitation Act, and the Subdivision of Agricultural Land Act.

Gopal said property development applications, appeals and other matters brought before municipalities and provincial appeal tribunals had been affected by the transition from the old spatial planning act to the new.

However, he said section 60 of the spatial planning act allowed the minister the discretion to permit applications and appeals under the old act to continue under the new act.

He said Sapoa had raised its concerns around the new act with Rural Development and Land Affairs Minister Gugile Nkwinti.

'Sapoa sent a letter to the ministry in which we asked the minister to use the discretion given to him in terms of section 60 (2) (d) of the act, which, if used, will remove some of the financial, economic and social effects that are currently being experienced by the commercial property sector in terms of development of properties, creation of jobs and poverty alleviation.

The impact on job creation and potential rates payable to local authorities is significant.

'If the minister does not use his discretionary powers in terms of this section of the act, it could mean that many new property development applications would have to be launched again. This is unnecessary bureaucracy.'

Gopal added that failure by the minister to exercise this discretion would have a significant and negative impact on the development of commercial property.

He said Sapoa, in its letter to the minister, cited a sample of major property projects to highlight the prejudice the commercial property sector faced because of the disjuncture between the old and new legislation, with three projects alone valued at more than R12 billion.

But Gopal said these three projects were not the only developments that would be affected by the failure of the minister to use the discretion provided in section 60 of the new spatial planning act.

'Many projects nationwide could be affected, which could literally hold up developments worth billions of rand or more. The impact on job creation and potential rates payable to local authorities is significant.

'We've voiced concerns before about development bottlenecks, which are often caused by legislative delays, ill-considered legislation or [laws] that have unintended consequences.

'This, together with an increasingly complex regulatory environment, is restricting the growth of the commercial property sector in the country,' Gopal said.

The out-of-date Subdivision of Agricultural Land Act was making it difficult for farmland to be rezoned for commercial development, he said.

'This piece of legislation was meant to have been repealed in 1997. It went through the repeal legislative process and was assented to by the acting president in 1998 but, amazingly, appears not to have been proclaimed for implementation by the president in the Government Gazette.

'This means that the act of 1970 is still applicable and in force,' he said.

The government in the meantime had published the Preservation and Development of Agricultural Land Policy.

He said this policy had similarities to the Subdivision of Agricultural Land Act but the land reform process was also set to affect the policy.

Sapoa was awaiting the outcome of the consultation process on the policy.

Business Report


Denny Crane

Denny Crane
It's not me ... yet. Denny Crane from the TV series Boston Legal. Click on picture if you're not sure who he is!