Farmers Abuse Loopholes to Sell Their Land

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By Mbatjiua Ngavirue WINDHOEK There is evidence of large-scale abuse of loopholes in the law that allows commercial farmers to avoid first offering their farms to government when they want to sell them. A large number of farms are changing hands under the table without the government or anyone else being any the wiser. The unofficial sale of farms probably also explains why so few farms are coming onto the open market, or being offered to the government for its land reform programme. To defeat the government’s plans for land reform, farmers are being aided by an army of lawyers making large amounts of money from exploiting loopholes in the law. The law as it currently stands gives the government a “preferential right” over all commercial farmland, meaning the land first has to be offered to the government before it can be sold to anyone else. If the government decides the land is unsuitable for land reform purposes it can then issue a certificate of waiver allowing owners to sell the farm to any buyer they choose. One loophole that is increasingly being abused is the Right of Usufruct, whereby a person legally gives over the use and enjoyment, as well as the rights to the fruits of the property, to someone else. The tactic that is now being used is to give a buyer a life-long right of usufruct over the property, while at the same time also writing a will bequeathing the property to that person when the owner of the farm eventually dies. The reality however is that the farm has effectively been sold, because the holder of the usufruct will have paid the owner the full price of the farm In one case, the farm Neu Okajura 310 in the Hochfeld district was sold on June 24 this year, almost certainly without the consent of the government. The previous owner Wolfgang Horsthemke settled all the outstanding bonds over the property, amounting to N$1,136,000-00, on June 16, 2006. Eight days later on June 24 a “personal usufruct” was ceded over the property in favour of Okeyra (Pty) Ltd by means of notarial deed No 129. The exact terms of the usufruct are not known, because Deed 129 is among a batch that has been sent for binding by the Deeds Office. When contacted by telephone Horsthemke himself, who now farms on the property Eahero, openly admitted that he in fact sold Neu Okajura. He said he was not sure who the shareholders in Okeyra (Pty) Ltd are, but according to some sources the new owners are a German citizen and two black Namibian partners. In this case there is no evidence of any deed of sale, or transfer, ever having been registered. The government has now closed the loophole through which commercial farmers used to be able to sell farms owned by close corporations or companies without offering them to the government. This used to be done by means of technically only selling the shares in the companies rather than the farmland as such. Share transfers in companies that own commercial farmland, or the registration of such companies, can no longer be done without the consent of the Minister of Lands. There however appears to be little that the government can do to prevent the abuse of the right of usufruct. Experts say usufruct is an essential provision in the law that offers protection to people in special circumstances. It often protects widows from being evicted from a farm when their late husband has bequeathed the farm to the children of the marriage. It can also help the elderly owner of a farm if through old age he or she is confined to a nursing home, but does not want to transfer the property until death. In some cases it also protects the right of access to family graves when a farm has been sold to new owners. Permanent Secretary at the Ministry Lands, Frans Tsheehama said the ministry is not aware of specific cases where the right of usufruct has been used to alienate land. Tsheehama pointed out that even in the case of a donation within a family the people concerned would need the approval of the Minister. “They are trying to use all the loopholes possible, but we are aware of these and are doing everything we can to close the loopholes. If members of the public are aware of irregularities, they must inform us. “If they are doing it to circumvent the preferential right of the Minister, then that is contrary to the law,” Tsheehama said. Furthermore, he added, if the right of usufruct is used to sell commercial farmland that is no obstacle for the government if it decides to expropriate the farm. The government has already expropriated farms where there is a right of usufruct, such as Ongombo-West and many others. He said that subject to the requirements of the law, the government would normally compensate the holder of the usufruct in such cases.