South African law

Image credit: Pixabay

The development of real estate law in South Africa

With land on the forefront of conversation in the country currently, it is important to note the importance of real estate law in South Africa.

South African law

Image credit: Pixabay

In South Africa, there is an efficient system of registration of title to land that is based on a land survey system. This then also gives rise to a certain basis of registration of land. Ownership of land is evidenced by a title deed issued by the deeds registry, which will record the owner’s details and the conditions under which the land is held. These conditions are normally imposed by local authorities and by private agreement.

As in the rest of the world, there has recently been a downturn in the property market that has affected the prices and activity in the real estate market. The National Credit Act 34 of 2005 became law on 1 June 2006 and is a comprehensive piece of legislation regulating the granting of credit to consumers, especially potential homebuyers seeking financial assistance to participate in the market.

The purpose of the National Credit Act is to protect consumers and regulate credit providers. This act regulates consumer credit, promotes responsible credit granting, and prohibits reckless granting of credit. The National Credit Act has had a marked effect on real estate activity in South Africa as credit is not easily available to consumers.

Here is a look at where else legislation plays a role in real estate activity in South Africa:

Foreign investment

Over the past few years, South African property has attracted foreign investment. There is also no restriction on foreign investors acquiring property in South Africa. These foreign companies wishing to acquire property in South Africa must register as an external company in terms of the Companies Act of 2008.

Before the proceeds of the sale of immovable property in South Africa or shares in a company owning South African immovable property may be remitted abroad by a non-resident, South African Reserve Bank approval is required, and one of the requirements for approval is that all taxes have been paid. That aside, there is generally no restriction on remitting the proceeds from the sale of a property, provided the purchase price was funded from abroad.

Land claims commission

One of the main cornerstones of land reform is the Restitution of Land Rights Act No 22 of 1994. The legislation established a Commission on Restitution of Land Rights, now known as the Land Claims Commission, and a Land Claims Court. In terms thereof, persons are entitled to lodge a claim for restitution of land with the Land Claims Commission.

The Commission is then required to investigate the claim and if the claim has merit, to publish the claim in the Government Gazette. Thereafter, the claim may be resolved in several ways. The state must settle the claim and compensate the owners of land, should the land be found to have been expropriated by the government, for restitution purposes; fair value is required to be paid by the Government.

Where matters cannot be resolved, the Land Claims Court may hear the matter and make rulings.

Protection of tenants

The Land Reform (Labour Tenants) Act No 3 of 1996, the Interim Protection of Informal Land Rights Act No 31 of 1996 and the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 all provide security of tenure to classes of tenants. The legislation, while giving protection to tenants, does not restrict landowners from approaching a court of law for the eviction of those tenants. the principles of justice and fairness must, however, be implemented by the court and justice and equity must prevail.

Communal property associations

The Communal Property Associations Act No 28 of 1996 enables communities to form juristic persons known as communal property associations to acquire, hold and manage property on a basis agreed by members of a community in terms of a written constitution. This is to allow restitution of land to communities and to create legal entities to hold land for the benefit of communities. The associations are registered at a central registry and upon registration assume legal identity.

Rental accommodation

The Rental Housing Act No 50 of 1999 defines the responsibility of the government in respect of rental housing property and creates mechanisms to promote the provision of rental housing.


As seen in current affairs, the land reform programme continues in South Africa, but this relates to rural and agricultural properties. This has influenced investment in properties subject to land claim, even though in the case of an expropriation of land, fair value for the land must be paid to the expropriated owner.

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