Legislative hitches hinder Property Developments
Several new property developments worth more than R12 billion planned in South Africa are at risk of being scuppered due to change in bureaucratic legislation, the South African Property Owners Association (SAPOA) has warned.
Briefing SA Commercial Prop News in statement on Tuesday, SAPOA Chief Executive, Neil Gopal, and the association’s President Estienne de Klerk said billions of rand in new property development in South Africa are being held up by various legislative delays.
Two pieces of legislation are of particular concern to Sapoa, is section 60 of the Spatial Planning and Land Use Management Act of 2013 (SPLUMA); and, Subdivision of Agricultural Land Act (SALA) of 1970 (Act No. 70 of 1970).
“We have raised our concerns around SPLUMA with the Minister of Rural Development and Land Affairs, 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,” explained Gopal.
Legislative hitches arose when the Spatial Planning and Land Use Management Act (Spluma) replaced the Development Facilitation Act (DFA) last year.
However, property development applications, appeals and other matters brought before municipalities and provincial appeals tribunals have been affected as a result of the transition to the new legislation. Section 60 of SPLUMA allows the Minister discretion to permit applications and appeals under the old DFA to continue under to new act.
According to BDLive, Errol Heynes, Mr Nkwinti’s chief of staff, said on Wednesday that the ministry had not received Sapoa’s letter.
"The matter evidently requires an adequate response. As you are aware, Parliament is busy with swearing in new members and there is the inauguration of the president and the appointment of the Cabinet all taking place in close succession, and that most likely involves Minister Nkwinti ," Mr Heynes said.
"If the minister does not use his discretionary powers in terms of this section of the act, it could mean the many new property development applications would have to be launched again, Mr Gopal said. "This is unnecessary bureaucracy," he said.
In its letter to the Minister, SAPOA cited a sample of major property projects to highlight the prejudice the commercial property sector faced as a result of the disjuncture between the old and new legislation.
The impact on job creation and potential rates payable to local authorities is significant.
The three mentioned projects alone totalled more than R12 billion. SAPOA said the three projects were not the only developments that would be affected “by the failure to discharge the provisions of section 60 of SPLUMA”.
Many projects nationwide could be affected, which could literally hold up developments worth billions of rand more.
With regards to the dated Subdivision of Agricultural Land Act (SALA) of 1970 (Act No. 70 of 1970) legislation, Gopal said it was making it very difficult for agricultural land to be rezoned for commercial development.
“In fact, 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 explained.
“In the interim, the government has published the Preservation and Development of Agricultural Land Policy. While this policy has similarities to SALA, the land reform process is also set to impact on the policy. SAPOA awaits the outcome of the consultation process on the policy,” Gopal added.
The commercial property sector and related construction industry makes a significant contribution to the South African economy. Gopal said the sector’s role should not be underestimated and would be a key contributor to the country’s National Development Plan (NDP) goals.