The Municipalities (Preferential Rights) Act (Wet voorkeursrecht gemeenten) makes it easier for local authorities to retain control over the sale of land in their locality. Where a parcel of land is made subject to a preferential right under the Municipalities (Preferential Rights) Act, the owner is obliged to offer the local authority the right of first refusal should he or she wish to sell the land. The purpose of the Act is to give local and provincial councils, as well as central government, a clearer picture of the state of the land market and also to prevent prices from being forced up as a result of speculation.
The purchase price is the result of a process of negotiation between the owner and the government body in question. If you do not succeed in agreeing on a price, the court will set a price after taking expert advice. This price is based on the market value of the land in question, i.e. the price that would be paid on the free market between the owner and a buyer, assuming that both are acting in a reasonable manner.
If the local authority, the provincial council or the central government (depending on who obtained the preferential right) does not wish to buy the land, or if the government body in question fails to take a decision within eight weeks of receiving an offer from the owner, the owner is entitled, for a period of three years thereafter, to sell the land to anyone else.
Is your land subject to a preferential right?
We can advise and assist you in drafting a contract of sale and fixing a price.