On 21 September 2025, business advocacy group Sakeliga announced that a 2019 land expropriation by the City of Ekurhuleni is advancing to court as South Africa’s inaugural test of expropriation without compensation (EWC) under the new Expropriation Act.
The case involves a 34-hectare development property valued between R30 million and R64 million, seized for “social housing” with zero compensation offered to the owner. (1)
Case Background
In 2019, the City of Ekurhuleni expropriated Portion 406 of the Farm Driefontein, citing public interest under Section 25 of the Constitution. Then-Executive Mayor Mzwandile Masina described the move as a deliberate test of constitutional limits on land expropriation. At the time, the owner was pursuing development rights for the site, located in a high-growth area near Benoni.
An independent valuation assessed the property at up to R64 million, while a baseline estimate placed it at R30 million. The city justified nil compensation (R0.00) by claiming the land was held for speculation, resulting in no financial loss to the owner. The expropriation targeted social housing development, aligning with post-apartheid land reform goals to address historical dispossession. (2)
Legal Proceedings
The owner has contested the nil offer since 2019, incurring legal costs and management time losses. The city has faced three adverse cost orders. The matter is now scheduled for court-directed mediation on 31 October 2025, followed by an 18-day trial in February 2026.
This timeline coincides with the implementation of the Expropriation Act 2024, signed into law by President Cyril Ramaphosa on 23 January 2025, which repeals the 1975 Act and codifies “just and equitable” compensation, potentially including zero in specific public interest cases. (3) (4) (5)
The Act followed a five-year parliamentary process, including a 2019 recommendation to amend Section 25 for EWC in limited scenarios. Opposition from parties like the Democratic Alliance delayed finalisation until 2025. (6)
Key Provisions of the Expropriation Act 2024
The Act establishes a structured framework for compulsory acquisition of property for public purposes or in the public interest, subject to constitutional requirements. (7) (8) Key elements include:
- Expropriation Process (Chapters 3-4, Sections 5-9): Authorities must conduct investigations and valuations, considering property suitability and rights involved. A notice of intention is served and published, inviting objections within 30 days, followed by a notice of expropriation that vests ownership on a specified date. Urgent expropriations are permitted for up to 12 months in emergencies, such as disasters (Chapter 7, Section 20). Withdrawals are allowed if the public interest changes (Chapter 8, Section 21). (9)
- Compensation Determination (Chapter 5, Section 12): Compensation must be “just and equitable,” balancing public and private interests, based on factors like market value, current use, acquisition history, state investments, and expropriation purpose. Exclusions apply to factors like post-notice improvements or enhancements from unlawful acts. Interest accrues from possession date, and payments can be direct or deposited with the Master in disputes (Sections 13, 15). Outstanding municipal charges are deducted (Section 17). (10) (11)
- Conditions for Nil Compensation (Section 12(3)): Nil compensation may be deemed just and equitable in limited cases, such as: (12) (13)
- Unused land where the owner’s primary purpose is appreciation rather than development or income generation (Section 12(3)(a)).
- Unused state-held land not needed for future functions and acquired without consideration (Section 12(3)(b)).
- Abandoned land where the owner has failed to exercise control despite capability (Section 12(3)(c)).
- Land where market value equals or is less than state subsidies or investments (Section 12(3)(d)). In land reform contexts under the Land Reform (Labour Tenants) Act, 1996, nil compensation may also apply (Section 12(4)).
Disputes over compensation can be resolved through mediation or court (Chapter 6, Section 19).
Broader Implications
A ruling upholding nil compensation could trigger economic fallout, including downward adjustments in property valuations and reduced investment in development land. Property rights uncertainty may hinder stewardship and trade, exacerbating South Africa’s inequality, where poverty affects 63% of the population per 2023 upper-middle-income metrics.
Politically, the case strains the Government of National Unity coalition, with potential for heightened foreign scrutiny from missions in Pretoria. Socially, success for the city could encourage similar state actions and embolden illegal land occupations.
Insecure land tenure correlates with reduced access to credit and development outcomes, per World Bank analyses on African land institutions. (14)
Sakeliga’s Response
Sakeliga plans to integrate the case into upcoming litigation challenging the Expropriation Act. The group has invited the DA, Freedom Front Plus, and IFP for political strategy discussions and will alert foreign trade representatives. It is also monitoring parallel expropriations and advising property developers. (15)
The full press release is available on Sakeliga’s website. Click here to read it
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One Response
I think we can boost the town through other ways