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Farmland Laws on Shifting Sands |
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Farmland Laws on Shifting Sands
There is uncertainty about the rezoning of agricultural land for development as the laws are being transformed.  Conveyancing specialist Charl Theron explains:
In terms of the subdivision of Agricultural Land Act No 70 of 1970, no Agricultural land may be subdivided without the prior written consent of the Minister of Agriculture.
This Act came into operation on 2 January 1971 and regulates the subdivision of Agricultural land and the further fragmentation of shares in such land. The idea behind the Act was to avoid the subdivision of arable land into pockets which cannot be farmed effectively and thus depriving the population of its ‘bread basket’.
There is a long definition in the Act of agricultural land, but the most important definition is:
“Agricultural Land means any land except:
(a) Land situated within the area of the jurisdiction of an urban local authority.”
Until 1993 only ‘traditional’ Municipal erven fell within the jurisdiction of Local Urban Authorities, eg municipalities. Thus all land outside municipal areas was, technically speaking, agricultural land and resorted under the control of Act 70 of 1970.
This was all changed by the promulgation of the Local Government Transition Act of 1993. In terms of this Act local authorities’ jurisdictions were extended to include virtually all the land in South Africa. Technically speaking this means that agricultural land no longer exists.
Act 70 of 1970 has now become a quagmire as legal interpretations of exactly what it is and who has the right to approve its subdivision has been argued all the way through the Supreme Court of Appeal in the matter of Stalwo (Pty) Ltd vs Wary Holdings (Pty) Ltd.
The Supreme Court of Appeal has now effectively found that since the 1993 enactment no agricultural land, as defined in Act 70 of 1970, exists and that the Act no longer applies. The matter has now been taken on further appeal to the Constitutional Court.
The tussle over this land sub-division is a tug-of-war between the Departments of Agriculture and Land Affairs, arguing various pieces of legislation that were in place before 1994 and are still on the statute books, or have been revised/repealed, new and pending laws, and their interpretations under the Constitution.
Until the highest court in the land makes its ruling, the Chief Registrar of Deeds’ 2002 decision that all subdivisions of agricultural land and the increase of shareholders in agricultural land, requires the consent from the Minister of Agriculture or a letter from the Department of Agriculture to the effect that the land in question is not agricultural land.
The Chief Registrar based this decision on the fact that until such time as the Constitutional Court has adjudicated on the matter, Act 70 of 1970 will still be applied. In this regard the Chief Registrar of Deeds has stated that all land, irrespective of its size, which has the word “farm” in its property description, will still be deemed to be agricultural land.
The whole of Act 70 of 1970 was to be repealed by Section 1 of the Subdivision of Agricultural Land Act Repeal, Act 64 of 1988. But this has yet to be proclaimed by the President in the Government Gazette, so this law still applies, but the question is in respect of which agricultural land.
The Stalwo (Pty) Ltd vs Wary Holdings (Pty) Ltd case, referred to above, was about the sale of land in 2004, which land was zoned as agricultural land. The seller, after the property was sold, did not want to proceed with the transfer and stated that being agricultural land, the sale is void because of the fact that the written approval of the Minister of Agricultural was not obtained.
But the purchaser stated that no agricultural land, as defined in Act 70 of1970, exists anymore, that the sale was valid and that transfer should pursue. The High Court found that because no ministerial consent was obtained for the proposed subdivision, the contract was void.
On appeal in 2007 the Supreme Court of Appeal however held the view that the land in question was not agricultural land and therefore the contract was valid and binding on both parties. The Supreme Court of Appeal held that all land now falls within the jurisdiction of municipal authorities and that the status of agricultural land changed with the expansion of Local Authorities and the establishment of new ones.
But the Court confirmed that the Minister retains the power to declare agricultural land for the purposes of Act 70 of 1970. Such declaration has not been made and it is anticipated that the Minister might make the necessary declaration if the Constitutional Court upholds the viewpoint of the Supreme Court of Appeal.
Until the final decision by the Constitutional Court, the Registrars of Deeds still apply Act 70 of 1970 to agricultural land as defined before 1993 and where the word ‘farm’ appears in the property description.
Obviously after the Supreme Court of Appeal’s decision a number of farmers hoped they could realise the capital value of portions of their farms bordering the old municipal areas. Many may have considered selling such portions to be subdivided into dwelling plots, thus immensely increasing their land value.
However, under the present circumstances, it is not to be. It is expected that, with the national and the international food crises, the Minister of Agriculture will act swiftly in the event of the Constitutional Court upholding the view of the Supreme Court of Appeal to finally redefine agricultural land for the purpose of Act 70 of 1970.
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