The bill leaves further uncertainty regarding the impact on financial institutions, particularly in their role as the mortgagee to a property intended to be expropriated.
While section 18 of the bill attempts to provide direction regarding a property to be expropriated which is subject to a mortgage – the bill leaves much to be desired regarding the position of mortgagees, said Cliffe Dekker Hofmeyr.
“What we would like to see is a clear definition of a financial institution as a right holder insofar as the encumbered property is concerned,” the firm said.
“Due consultation should be held with the financial institutions as mortgagees during the process of expropriation – whilst currently there is no clear obligation on the expropriating authority to engage with financial institutions as mortgagees prior to the contemplation of compensation for the property to be expropriated.”