Part E: Communal Property Associations

The CPA Act

The Communal Property Associations Act, No. 28 of 1996, (“the CPA Act”) was passed to enable “disadvantaged communities … to establish appropriate legal institutions through which they may acquire, hold and manage property in common” (see first paragraph of the Preamble to the CPA Act).

Application of the CPA Act

• In terms of Section 2(1) of the CPA Act, a communal property association (“CPA”) may be formed in four instances :

  • By a community which by order of the Land Claims Court is entitled to restitution under the Restitution of Land Rights Act, where that Court has ordered restitution on condition that a CPA be formed.

  • By a community entitled to or receiving property or other assistance from the State in terms of an agreement or in terms of any law, on condition that a CPA be formed.

  • By a community approved by the Minister of Land Affairs, to which any property has been donated, sold or otherwise disposed of by any person on condition that a CPA be formed.  Section 2(2) of the CPA Act stipulates that the Minister may, with due regard to the objects of the CPA Act, give the approval contemplated above if the Minister is satisfied that “the community is disadvantaged and that it is in the public interest that such approval be given, having regard to the nature and current use of the land”.

  • By a community approved by the Minister in the manner contemplated in paragraph 2.1.3 above, which is a group acquiring property or acquiring rights to property and which wishes to form a CPA.

• In short therefore, a CPA may be formed only with the prior approval of the Minister of Land Affairs, except in cases where :

  • The Land Claims Court directs that a CPA be formed;  or

  • An agreement with the State stipulates that a CPA be formed.

• It is clear from the CPA Act that a CPA is, in essence, a voluntary association of the type contemplated in Part C above, established and registered in terms of a CPA Act, for the express purpose of holding property in common on behalf of a community.  The comments set out in Part C above, therefore, apply equally to CPAs, subject to the provisions of this Part E.

Similar Entities

The Minister of Land Affairs may permit an entity which was not established in accordance with the CPA Act, to register as a CPA, if that organisation is a “similar entity”, namely “a trust, association of persons or company registered in terms of Section 21 of the Companies Act”.

Community

Where the word “community” is used in the CPA Act, this is deemed to mean “a group of persons, which wishes to have its rights to or in particular property determined by shared rules under a written constitution and which wishes or is required to form (a CPA)”.  From this definition and a reading of the CPA Act as a whole, it is clear that CPAs are appropriate only in situations where a group of persons wishes to hold land or property in common, namely where it is not intended that such land or other property be sub-divided and parcelled out to individual community members for their exclusive ownership.

Property

It is also important to note that any reference in the CPA Act to “property” is deemed to include “movable and immovable property and any right or interest in and to movable or immovable property or any part thereof”.  It would therefore be possible, notionally at least, to establish a CPA where the community rights are not in respect of land or other immovable property, but are in respect of movable property such as machinery, vehicles, equipment, etc.

Establishing a CPA

• In order to establish a CPA under the CPA Act, the community must adopt a written constitution.

• If it wishes to adopt a constitution, a community must notify the Director-General for Land Affairs in advance, and must convene a meeting or meetings for the purpose of adopting that constitution in the manner prescribed by regulation promulgated under the CPA Act.

• The meeting or meetings at which the constitution is adopted must be attended by a delegate of the Director-General, who will take minutes of those meetings, witness the adoption of the constitution and prepare a report setting out his or her observations in relation to various matters, including :

  • Whether the notice of the meeting/s was effective in ensuring the presence of members of the community at the meeting/s.

  • The number of members of the community present at the meeting/s or validly represented at the meeting/s, and whether the various interest groups in the community were represented at the meeting/s.

  • The number of members of the community who voted in favour of and the number who voted against the adoption of the constitution or any specific provisions of it.

  • Whether the interests of any person or group of persons are likely to be adversely affected as a result of the adoption of the constitution.

  • The views of any dissenting persons.

• The purpose of having such a report prepared is, inter alia, to permit the Director-General to make decisions in terms of Section 7(4) of the CPA Act, which reads as follows :

“Any person claiming to have been excluded from participation in the process of preparation and adoption of the constitution or claiming that the process was not fair may lodge a complaint with the Director-General, who may, if he or she is satisfied on reasonable grounds that the complaint is material, refuse to cause the association to be registered until the issue has been resolved to the satisfaction of the Director-General”.

Registration of CPAs

• Application for registration as a CPA is made on the prescribed form to the Director-General for Land Affairs, and must be accompanied by the constitution adopted in the manner referred to above, and the report referred to in paragraph 6.3 above.

• Section 8(2) of the CPA Act stipulates that an association will qualify for registration as a CPA if :

  • The community concerned has been approved by the Minister, or has been directed to be formed by the Land Claims Court or a provision of an agreement concluded with the State, as contemplated in paragraph 2 above.

  • The association has as its main object the holding of property in common.

  • The constitution complies with the principles set out in Section 9 of the CPA Act (see paragraph 8 below).

  • The constitution deals with the 22 matters referred to in the Schedule to the CPA Act.

  • The meeting/s referred to in paragraph 6.3 above was/were attended by a substantial number of the members of the community.

  • The resolution to adopt the draft constitution was supported by the majority of the members of the community present or represented at the meeting/s.

• Where the Director-General approves an association for registration as a CPA, that CPA is allocated a registration number and is issued with a registration certificate.

• Section 8(6) of the CPA Act sets out the consequences of registration, which are no different from the consequences of the establishment of any other voluntary association or other legal entity (such as a Section 21 or other company), and include the following consequences :

  • The association is established as a juristic person, with the capacity to sue and be sued, and to contract, in its own name.

  • The association is entitled to acquire and dispose of movable and immovable property, and to encumber such property.

  • The association has perpetual succession regardless of changes in its membership.

• Section 8(7) of the CPA Act stipulates that a person appointed to a committee of a CPA “shall stand in a fiduciary relationship to the members of the association”.  This represents an advance in or change to the common law, which does not impose a fiduciary duty on executive committee members of voluntary associations.  Executive committee members of CPAs are accordingly bound by similar fiduciary rules as apply to directors of companies, and trustees (see Parts A and B above).

Principles to be accommodated in CPA constitutions

Section 9 of the CPA Act stipulates that the constitution of a CPA must be consistent with the following general principles :

• Fair and inclusive decision-making processes

• Equality of membership

• Democratic processes

• Fair access to the property of the CPA

• Accountability and transparency

Advantages and disadvantages of CPAs

• There would appear to be very few advantages connected with the establishment of a CPA.  Those that can be gleaned from the CPA Act are the following :

  • In terms of Section 6 of the CPA Act, a community wishing to establish a CPA may apply to and receive assistance from the Director-General in the preparation of a draft constitution.

  • In terms of Section 10 of the CPA Act, the Director-General may appoint a conciliator to help mediate disputes within a CPA.

  • In terms of Section 10(8) of the CPA Act, the Minister of Land Affairs “may, in consultation with the Minister of Finance, institute other programmes for the provision of assistance to communities or CPAs … for the purposes of (the CPA Act)”.

• Set against the very limited advantages of establishing a CPA as opposed to a common law voluntary association, are considerable disadvantages :

  • As appears in some detail above, a complex and time-consuming process has to be embarked on and complied with before a CPA can be registered, which includes obtaining approval from the Minister of Land Affairs, ensuring that representatives of the Director-General are present at relevant meetings, ensuring that the constitution to be adopted complies with the very detailed requirements of the CPA Act, etc.  On the other hand, a voluntary association which is not intended to be registered as a CPA, may be established quickly, easily and inexpensively.

  • In terms of Section 11 of the CPA Act, a registered CPA is obliged to provide certain documents and information to the Director-General from time to time, and must afford the Director-General certain rights of monitoring and inspection.  

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