Current status of permission to occupy

15 Mar 2019

Throughout South Africa, there are still properties, often large properties, that are held by Permission to Occupy rights (“PTOs”). We often come across these rights in former rural areas including those that are now used for commercial or industrial purposes.

A PTO can be defined as a user right of a personal nature allowing use or occupation over rural, unsurveyed land. Although registerable in several state departments PTOs are not registrable in the Deeds Office and does not transfer ownership of the land to occupant.

Legal Status of Permission to Occupy right

What then does the holder of the PTO have? A PTO provides confirmation, in writing, that the land being occupied in terms of the PTO was lawfully allocated to the occupant. And, although the PTO does not confer a real right on the holder, it has been generally accepted that the personal rights conferred are akin to a real right. This view is supported in Maduna vs Daniel and others (2001) JOL 9186 (TK).

The PTO therefore appears to all but confer full ownership on the holder. However, it must be noted that the right is still hindered in terms of section 25(3) of the KwaZulu Land Affairs Act 111 of 1992 (KwaZulu) (“the Land Act“) the rights are subject to revocation by the Minister after consultation with the tribal authority. This inevitably leads to insecurity of tenure.

In light of this potential insecurity of tenure, a decision was taken in September 1999 that new PTOs will no longer be issued. Instead, tribal authorities are now expected to issue a more secure and formal right of tenure such as ownership with a formal title deed. The considerations behind this decision are based on the considerations behind the the Upgrading of Land Tenure Rights Act 112 of 1991 (“the Upgrading of Land Rights Act”), namely, to protect and enhance the rights of the PTO holders rather derogating from those rights.

In one of the most recent cases dealing with PTO rights, The Twelve Apostles Church in Christ and Another v The Twelve Apostles’ Church in Christ and Others (8049-12; 8050-12; 10263-12) [2017] ZAKZDHC 41, the KwaZulu Natal High Court in Durban upheld the rights of occupiers whose rights were based on a PTO. In these particular facts there was a dispute between 2 groups over the right to occupy the land. The first group held the land in terms of a PTO while the second group held the land in terms of a long-term lease. Although there was no attack on the validity of PTOs in general, and the decision was based largely on the PTO having been issued first, it is submitted that the court would not have held in favour of the PTO rights if such right had become invalid and or null and void.

We therefore submit that a PTO is still a valid right, and if it hasn’t been converted to another right, its legal validity continues as before.

Recent controversy for existing PTOs in KwaZulu Natal

Despite the seemingly clear legislative intention to further secure the tenure and other ownership-like rights accompanying PTOs, a decision was taken by the Ingonyama Trust Board (“ITB”), the tribal authority that allocates and administers property rights such as PTOs in the KwaZulu Natal area, to invite all PTO holders to convert their PTO rights to long-term leases (“the conversion project”).

Since the decision to implement the conversion project was taken during or around 2017, ITB has proceeded to convert numerous PTOs to long term leases and have obtained rental payments from the now tenants who previously held PTOs. This appears to be a clear hinderance of the movement towards stronger rights for PTO holders.

In March 2018 the conversion project was questioned by the National Assembly’s Portfolio Committee on Rural Development and Land Reform (“the portfolio committee”). In particular, the portfolio committee questioned the conversion project’s seeming contradiction to the national policy as discussed above. The committee therefore recommended that the implementation of the project be put on hold. The ITB did not however immediately adopted this recommendation.

In November 2018, as a result of the persisting conversion project, an application was launched in the Pietermaritzburg High Court by the Council for the Advancement of the South African Constitution for an order declaring the conversion project to be unlawful. After requesting an adjournment, the ITB’s replying affidavit is due to be filed in February 2019 where after the matter will proceed.

Having considered the application papers that were filed, we submit that there are reasonable prospects for success for the application launched.

Therefore, despite some of the recent developments on PTOs we submit that these rights are still valid and binding. We further submit that holders of these rights are not obliged to convert the PTO to a long-term lease and that such a conversion will, in contrast to the current policy trajectory, result in a weaker rights position for the occupier.

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(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)

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