SUBDIVISION OF AGRICULTURAL LAND IN SOUTH AFRICA – RESTRICTIONS & SOLUTIONS
Due to the impact it might have on food security in the country, the division of agricultural land into sub-units is an area which is strictly regulated in South Africa. There are diverse reasons why an owner of a piece of land might require such subdivision e.g inheritance to heirs, to sell, to lease, the list is endless.
The Subdivision of Agricultural Land Act 70 of 1970 (as repealed) (hereinafter referred to as the Act) was promulgated to regulate subdivision of agricultural land in South Africa. The main aim is to prevent division of arable land into unproductive and uneconomic sub-units as was noted in the case of Van der Bilj v Louw (1974) 2 SA 493 (C). Such protection, it is thought, goes a long way in ensuring food security in the country.
The Act however makes provision for securing the written approval of the Minister of Agriculture, Forestry and Fisheries in the event that a land owner wishes to effect subdivision on agricultural land, save for exceptions in Section 2 which include when subdivision is done in favour of the State or estate succession before commencement of the Act. Seeking the Minister’s approval is an uphill task, but not impossible. It is an involved process whereby a Land Surveyor must come up with diagrams which must be lodged together with the application. So strict are the restrictions that before one acquires the Minister’s consent to subdivide for sale, no publicising of the sale must be done as was held in Geue v Van der Lith (2004) 3 SA 333 (SCA), or entering into a sale agreement in anticipation of the Minister’s consent, Four Arrows Investments 68 (Pty) Ltd v Abigail Construction CC (2016) 1 SA 306 (SCA). Such contract will be null and void.
Section 3 contains certain prohibitions to subdivision of agricultural land and one of the effects is that it is unlawful for two children to inherit the same land in both their names. In this scenario an option may be in creating a Trust that will own the land, and have the heirs as beneficiaries under the Trust. Alternatively the land may be transferred to a company, whereby the beneficiaries will then be appointed as directors and/or shareholders. Preferably further, the beneficiaries may agree that one of them acquires the land ownership and buy out the others’ share, or by way of an underlying contract they keep their share while enjoying benefits.
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