NCOP briefed on Housing Consumer Protection Bill

Housing Consumer Protection Bill
12 Mar 2024

The Housing Consumer Protection Bill does not provide for owner builder exemptions as all homes constructed must be enrolled.

The human settlements department declared this in a recent briefing to the national council of provinces (NCOP) on responses to provincial submissions on the bill.

The national assembly passed the bill and sent it to the NCOP for concurrence in March 2023.

The bill was tabled in parliament in May 2021.

The bill was published for comment in Government Gazette 42669 in 2019.

Cabinet approved the proposed legislation for consultation in August 2019.

According to the cabinet statement, the draft bill will “regulate homebuilders and developers; expand the protection to housing consumers; introduces effective enforcement tools and prescribes appropriate penalties/sanctions to deter non-compliance by homebuilders”.

It will also create an enabling environment for new entrants into the homebuilding industry by introducing contractual provisions that ensure their sustainability in the market and place subsidy and social housing projects within the ambit of the bill to ensure the protection of consumers in that segment of the housing market.

The bill aims to:

  • provide for the protection of housing consumers;
  • provide for the continuance of the National Home Builders Registration Council as the National Home Building Regulatory Council;
  • provide for the registration of homebuilders;
  • provide for the enrolment of homes in order to be covered by the home warranty fund;
  • provide for the regulation of the conduct of homebuilders;
  • provide for the continuance of the home warranty fund;
  • provide for claims against the fund;
  • provide for the funds of the Council and for the management of those funds;
  • provide for procurement and contractual matters in relation to the building of a home;
  • provide for the enforcement of this Act;
  • repeal the Housing Consumers Protection Measures Act, 1998, and
  • provide for matters connected therewith.

The proposed legislation will apply to the building of a new home and any addition to, alteration, renovation or repair of, a home involving the submission of building plans to a municipality.

Some of the objectives of the envisaged Council include representing the interests of all housing consumers; regulating the entire home building industry; ensuring structural quality of homes; promoting housing consumer rights and providing information relevant to stakeholders in the home building industry.

The Council will be expected to set up and maintain an integrated database able to integrate with the database contemplated in section 6 of the Housing Act and which consists of a register of homebuilders and developers; a register of enrolment of homes; and any other register that the Council considers appropriate.

According to the bill’s memorandum, the department and the National Home Builders Registration Council have identified certain challenges with key provisions of the Housing Consumers Protection Measures Act that impact negatively on the efficient execution of the Council’s mandate and that required review.

In response, the bill aims to ensure adequate protection of housing consumers and effective regulation of the home building industry, address the economic transformation of the industry through the introduction of provisions relating to the warranty fund surplus that can be utilised towards developmental programmes for the homebuilding industry and create an enabling environment for new entrants into the home building industry through the introduction of contractual provisions that ensure their sustainability in the market.

The portfolio committee on human settlements adopted the bill with amendments.

The select committee on cooperative governance and traditional affairs, water and sanitation and human settlements will process the bill.

Other responses to the select committee include that all employees or staff of Council are regulated in terms of labour laws including the Labour Relations Act and Basic Conditions of Employment Act but the Code of Conduct applies for Board members as they are not employees; owner builder exemptions are granted on exceptional circumstances which cannot be predicted and must be in the public interest; the warranty cover for roof leak is currently 1 year and the bill proposes that it be extended to 2 years post occupation, and in addition the warranty is proposed to commence on date of construction; it is important to note that minister is empowered to extend the period of the warranty cover, after the Council have undertaken an actuarial assessment to determine whether the home warranty fund is able to provide for the additional period; the proposal to have the register include the foreign national employees of the home builder to have valid work permit may burden the NHBRC to enforce the mandate of the labour and home affairs departments; the home builder has a responsibility to ensure compliance with all applicable legislation; and all home builders who are foreign nationals are required to have and produce valid work permit when they register or enrol the home with the NHBRC (this will be included in the Regulations and Policies of the NHBRC).

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(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)
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