Cabinet has mandated Human Settlements Minister Tokyo Sexwale to urgently work with the Gauteng government to find an amicable solution to the situation in Lenasia.
"Cabinet [at its regular fortnightly meeting on Wednesday] said that the minister must work with the government of Gauteng," Women, Children, and People with Disabilities Minister Lulu Xingwana said on Thursday.
"Cabinet was also sympathetic to the people who have lost their property there, some of them probably their lifetime savings.
"But Cabinet then said the minister, with the government of Gauteng, must work on that issue and look at alternatives, but ensure that all that has to be done must be done within the law," she said.
The Gauteng housing department has started demolishing houses built on illegally sold land in Lenasia.
The demolitions began on November 8 and 9. The housing department said the land the houses were built on was meant for government housing.
About 50 houses were initially destroyed and there were plans to knock down another 113.
The plots on which the houses were built were apparently fraudulently sold for amounts ranging from R2500 to R95,000. The buyers were given forged deeds of sale bearing the department's logo.
Xingwana said Cabinet believed that there "has been a lot of criminal activity in that area".
People had sold land that did not belong to them and people had been abused in terms of buying this land from criminal elements.
"While government wants to act in a fair manner... Cabinet would like to ask the individuals who have been affected also to work with the law enforcement agencies to identify the criminals who have abused, robbed, or cheated innocent individuals in that situation," she said.
Asked about possible compensation for the victims, Xingwana repeated that Sexwale had been mandated to look at the situation and alternatives within the confines of the law.
"And I'm sure he will come back and report to Cabinet regarding all that is of concern there, including the criminal elements, what needs to be done as far as that is concerned, and various legal instruments that can be used to address that situation.
"I cannot say at this stage whether anybody will be refunded or not until we receive a full report from the minister. At this point in time I am not in a position to say who erred and who did not err," Xingwana said.
However, Cabinet wanted to treat "humanely" members of the community, especially those who were victims of criminal elements.