South Africa’s first test case of land expropriation without compensation unfolding in Ekurhuleni

A landmark legal battle over South Africa’s first attempt at expropriation without compensation is headed for mediation this week, as the City of Ekurhuleni defends its decision to seize 34 hectares of privately owned land without paying a cent.

The City of Ekurhuleni and the owners of the private piece of land in Driefontein, Boksburg are expected to enter a court-directed mediation on Friday (31st October 2025) to resolve the dispute.

If the talks fail, the dispute will proceed to trial in the Gauteng High Court in February.

The Municipality has expropriated the land and offered nil (zero) compensation, while the owners demand a payout of R30 million.

In 2019, the City seized the privately owned land in Driefontein, Boksburg, arguing it intended to use it for public purposes.

The expropriation was carried out under Section 9(3) of the Housing Act, which states: “A municipality may expropriate any land required for housing development.”

However, the landowners - Business Venture Investments 900 - are not challenging the expropriation itself, but rather the municipality’s offer of zero compensation.

The company purchased the land from a related entity in 2005 for R1 million - a price it says reflected an internal transfer rather than the true market value. It claims recent valuations estimate the property at more than R30 million.

Why expropriate the land?

In a letter seen by EWN, former Ekurhuleni City Manager Imogen Mashazi argued that the municipality’s offer of nil compensation is justified because:

• The land has been vacant and unused for over 30 years

• It has not generated any commercial activity

• It was not purchased at market value

Mashazi said the land is needed for property and township development.

Section 25(2) of the Constitution allows expropriation only for public purpose or in the public interest.

Ekurhuleni argues both apply, stating in court papers:

“The city expropriated the property to fulfil its statutory obligations to develop, among others, social housing projects.”

The legal basis for nil compensation

South Africa currently has no active law that explicitly allows for land expropriation without compensation.

The Expropriation Act of 2024, which would allow for zero compensation under specific conditions, has been passed but is not yet in effect.

Dr Tanveer Jeewa, an Advanced Property Law lecturer at Stellenbosch University, said the city appears to be misinterpreting the law by arguing its offer is “just and equitable.”

“Until the Expropriation Act of 2024 commences, nil compensation has no statutory footing,” she said.

Under current law, compensation must meet the Constitution’s “just and equitable” standard - not necessarily market value, but not automatically zero.

The City argues compensation is unjustified because the land is dormant and unused.

Political party reactions

Freedom Front Plus leader Corné Mulder warned that a ruling supporting nil compensation could undermine property rights and the economy:

“Banks won’t issue loans or mortgages if the state can simply seize property.”

He said municipalities could then take land “willy-nilly.”

The ANC in Ekurhuleni has taken the opposite stance.

Regional secretary Jongizizwe Dlabathi said expropriation, whether with or without compensation is necessary to address historical land dispossession and in this case the owners should not be compensated:

“If the land was acquired through apartheid systems, why should the government of the day pay for that land?”

He insists the process was lawful, saying the courts will determine whether rationality and legality were followed.