Abstract
Market value is the most common compensation basis for expropriation of both private and customary property rights. Private property rights are generally exchangeable while customary property rights are conceptually not as exchangeable. It is hence critical to analyse the applicability of current compensation theories, which are founded on private property rights, to different property rights and in different social settings. By using existing literature and empirical evidence from Africa and other countries where customary property rights dominate, this paper undertakes a theoretical analysis of the applicability of existing compensation theories and the methodologies used to achieve the desired compensation goals. The analysis concludes that whilst current compensation theories are broadly applicable to customary property rights as they aim to protect property rights and prevent expropriatees from impoverishment, various ontological and methodological factors limit the realisation of these goals in settings dominated by customary properties. Such factors include ontology and dominance of customary property rights, use of market value as a compensation basis, and capacity of compensation assessors. Broadly, these factors lead to inadequate compensation and impoverishment of affected people.
Highlights
Provision of various public infrastructures, services and amenities like roads, railways, electricity, petroleum and gas pipelines, housing, airports, schools, hospitals, and conservation areas (Kakulu, 2008; Du Plessis, 2009; Ambaye, 2013; Denyer-Green, 2014) requires vast pieces of land that governments might not have in required quantities, locations, or spatial configurationsJournal of African Real Estate Research Volume 3(2) 2018(Evans, 2004)
Whilst this compensation goal is fairly achievable for private property owing to realisation of fair market values where market evidence is accessible, there are various ontological and methodological challenges when it comes to customary properties
Market value is principally challenged by the nature of customary properties, which are conceptually non-exchangeable; scarcity of comparable market evidence to support objective valuations and realise reasonable market values; and use of improperly trained agents and people as compensation assessors
Summary
Provision of various public infrastructures, services and amenities like roads, railways, electricity, petroleum and gas pipelines, housing, airports, schools, hospitals, and conservation areas (Kakulu, 2008; Du Plessis, 2009; Ambaye, 2013; Denyer-Green, 2014) requires vast pieces of land that governments might not have in required quantities, locations, or spatial configurations. Contrariwise, customary property rights are less defined and mostly inalienable (conceptually) (Small & Sheehan, 2008) This view of property prevails on the African continent (Cotula & Chauveau, 2007, Kakulu, 2008) and other developing countries (Xanthaki, 2007). With such differing ontological perceptions of property rights between private and customary, how is compensation assessed for customary properties guided by existing compensation theories? One needs to explicitly understand two key aspects: market value as the basis for assessing compensation and private property rights as the accepted foundation for current compensation theories
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