99-Year Leases over Agricultural Land

The use of 99-year leases for agricultural land has become increasingly significant in legal and practical contexts. This article examines the legal framework surrounding 99-year leases, focusing particularly on Section 3(d) of the Subdivision of Agricultural Land Act 70 of 1970 (the Act), which regulates the subdivision of agricultural land in South Africa. This discussion aims to elucidate the requirements and implications of Section 3(d) concerning 99-year leases over a portion of agricultural land.

A 99-year lease is a long-term contractual arrangement that grants lessees extensive rights to use and develop agricultural land. These types of leases provide lessees with security of tenure, promoting sustainable agricultural practices, and facilitating long-term investment in land improvement and infrastructure. This stability is crucial for fostering agricultural productivity and economic development.

Section 3 of the Act addresses exceptions to the general prohibition on the subdivision of agricultural land. The Act, originally enacted to preserve the agricultural potential of land by limiting its fragmentation, prohibits the subdivision of agricultural land without ministerial approval. However, Section 3(d) empowers the Minister of Agriculture and Land Affairs to grant exemptions to this subdivision restriction specifically for leases exceeding 10 years in duration and therefore the so called 99-year leases.

Section 3(d) of the Act stipulates:

“no lease in respect of a portion of agricultural land of which the period is 10 years or longer, or is the natural life of the lessee or any other person mentioned in the lease, or which is renewable from time to time at the will of the lessee, either by the continuation of the original lease or by entering into a new lease, indefinitely or for periods which together with the first period of the lease amount in all to not less than 10 year, shall be entered into … unless the Minister has consented in writing.”

Section 3(d) vests discretionary power in the Minister to consider and grant exemptions for leases, in this scenario a 99-year lease over ‘n portion of agricultural land. This discretionary authority allows the Minister to assess each application based on its merits, considering factors such as the potential agricultural benefits, sustainability of land use, and economic development objectives. The exercise of this discretion is subject to procedural fairness and administrative law principles.

Prospective lessees seeking to benefit from Section 3(d) exemptions must submit detailed applications to the Minister should they wish to register a long-term lease over a portion of agricultural land. This typically includes a comprehensive agricultural development plan, evidence of financial capacity, and commitments to sustainable land management practices. The application process requires transparency and may involve consultations with relevant stakeholders, including local communities and environmental authorities.  It is advisable to contact a professional Town Planner to assist with the application and to provide guidance in respect of the prospect of approval by the Minister’s office.

While Section 3(d) aims to promote agricultural development through long-term leases, it also incorporates public interest considerations. These include equitable access to land, protection of environmental resources, and the rights of local communities and farmworkers. The Minister's decision-making process must therefore balance private property rights with broader socio-economic and environmental objectives.

What is very important to note is that exemptions granted under Section 3(d) may be subject to specific conditions and restrictions aimed at ensuring compliance with agricultural development goals and environmental sustainability standards. These conditions could include periodic reviews, performance benchmarks, and obligations to report on land use practices and outcomes.

Section 3(d) of the Subdivision of Agricultural Land Act 70 of 1970 plays a pivotal role in facilitating sustainable agricultural development through 99-year leases over portions of agricultural land. By allowing exemptions to the subdivision restrictions for extended lease terms, the provision aims to balance agricultural productivity with regulatory safeguards against land fragmentation. A nuanced understanding of Section 3(d) underscores its significance in shaping agricultural land tenure policies and practices in South Africa, emphasising the imperative of balancing private property rights with public interest considerations. As agricultural landscapes evolve and global challenges such as food security and climate change intensify, the interpretation and application of Section 3(d) may evolve, thereby shaping the future of agricultural land tenure and governance.

Authority: Subdivision of Agricultural Land Act, 1970

Written by: Keabetswe Motaung
Moderated and approved by: Jean-Mari De Beer – Le Grange

‍