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Communal property associations reform


Bulelwa Mabasa | Director | Head of Land Reform | Werksmans Attorneys | mail me | 


Communal property associations reform aims to address longstanding governance challenges and enhance the effective management of community-owned land.

The Restitution of Land Rights Act 22 of 1994 allowed individuals and communities to claim rights to dispossessed land. This dispossession occurred due to past racially discriminatory laws or practices. The Act raised questions about managing and holding land claimed by communities if restitution was granted.

Origins of communal property associations

To address this, the concept of Communal Property Associations (CPAs) emerged. CPAs are legal entities formed to help communities acquire, hold, and manage property based on an agreed constitution. These entities aim to ensure proper management and benefit distribution among community members.

Until 8 October 2024, the Communal Property Associations Act 28 of 1996 governed CPAs. This Act regulated CPA constitution, administration and governance. However, the 2023/24 Commission on Restitution of Land Rights (CRLR) report revealed significant non-compliance among 75% of registered CPAs.

Non-compliance issues included poor leadership, governance failures, and lack of proper administration within CPA executive committees. CPAs also lacked solid business models, leading to illegal transactions and poor record-keeping. Consequently, CPA beneficiaries often did not receive their rightful benefits.

Legislative shortcomings also contributed to these failures. Ambiguities in the principal Act created confusion and hindered compliance. To address these issues, legislators drafted the Communal Property Associations Amendment Bill.

Communal property associations reform and its effect

On 8 October 2024, the bill became law, introducing the Communal Property Associations Amendment Act, 2017 (new Act).

The new Act clarified provisions left vague by the principal Act. It solidified CPAs’ legal status, enabling them to manage community properties effectively. Additionally, the new Act broadened the principal Act’s scope. It also established various bodies to enforce compliance and ensure CPA functionality.

Below are the notable amendments to the principal Act and the implications on the operation of CPAs.

Provisional Associations [section 18A of the new Act]

Communal Property Associations Office [section 2B of the new Act] 

Registrar [section 2C and 2D of the new Act]

Quorums [various sections in the new Act]

In stark contrast to the principal Act, the bill provides for a 60% minimum vote in favour of a decision to be made. As such, for a decision to be valid, 60% of the attendees of a meeting, who are eligible to vote must vote in favour of the motion. This 60% rule is applicable when:

In conclusion

Since their inception, CPAs and the principal Act have faced corruption, incompetence, and lack of service delivery issues. CPAs have also frequently been sites of illegal activities, further undermining their intended purpose and effectiveness.

The CPA Amendment Act seeks to address these challenges by clearly outlining community rights and proper administration steps. The Act’s provisions aim to resolve key issues and improve the governance and functionality of CPAs.

A specialised CPA office and a Registrar’s appointment promise a centralised agency for CPA administration and oversight. These measures should result in accurate record-keeping, better community assistance, and more frequent information sessions for CPA beneficiaries. However, the success of the CPA Amendment Act depends on adequately resourcing the Registrar and the CPA office.

Both offices require sufficient skills, funding, and resources to perform their roles effectively and meet expectations. Additionally, a public awareness campaign is critical to educate communities and CPAs about complying with the CPA Amendment Act.


 

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