It might be a farmer intending to subdivide his agricultural farm to bequeath to his children, sell a portion to a third party, or even subdivide to lease over a long period.
Unlike residential properties, subdivision of agricultural land is a strictly regulated area owing to the impact it might have on food security and agriculture in general.
In Van der Bilj v Louw (1974) 2 SA 493 (C) 499 the Court commented that the purpose of the Subdivision of Agricultural Land Act 70 of 1970 (the Act) is to prevent the turning of agricultural land with huge yields into uneconomic sub-units.
The Act may apply in the abovementioned situations and the written approval of the Minister of Agriculture, Forestry and Fisheries (the Minister) is required for subdivision to be lawful, save for exceptions in Section 2 of the Act. These include where such division is in favour of the State or a statutory body and where it is as per a testator’s disposition who died before the commencement of the Act.
In seeking approval from the Minister for subdivision, one must engage the services of a surveyor to come up with the diagrams for the intended subdivision, and together with the application these can be submitted to the Minister for assessment and approval.
In the event that one requires subdividing the agricultural land to sell a portion, it subsequently means one must get the approval of the Minister before entering into the sale agreement or publicising the sale as was upheld in the case of Geue v Van der Lith (2004) 3 SA 333 (SCA). Further, any contract entered into before such approval is obtained in writing, is null and void as was held in the case of Four Arrows Investments 68 (Pty) Ltd v Abigail Construction CC (2016) 1 SA 306 (SCA).
Section 3 (e) (ii) prohibits subdivision (for lease) for periods longer than 10 years, or for the duration of one’s natural lifetime, or to the same person for a period aggregating more than 10 years.
In terms of succession, section 3 (b) provides that it is prohibited for a person to own an undivided share in agricultural land, without consent of the Minister. The effect of this is that agricultural land can only be registered in the name of one person or entity.
For example, if a farm is bequeathed to two sons, it will be unlawful. Thus, an option may lie in bequeathing the farm to a Trust where the heirs are beneficiaries, or to a company where the heirs are shareholders or directors.
Another option would be for the heirs to agree on having the farm bequeathed to one of them, in exchange for compensation or benefit. This should work best if put into a written contract as there might be problems when disputes arise in future. In the event that the options above are not viable under the circumstances, the Executor of the estate may consider selling the farm and the residue shared between the heirs.
The subdivision of agricultural land is fraught with legal restrictions that seek to protect the integrity and productivity of agricultural land. In situations where parties intend to subdivide it for various reasons like the above or other, we assist with that process, and we encourage parties to consult with us in that regard.
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