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Housing Consumer Protection Bill Heading for Parliament

May 13, 2021

Department of Human Settlements

The Draft Housing Consumer Protection Bill is heading for parliament.

The human settlements department published the draft bill’s explanatory summary in Government Gazette 44555.

The draft bill was published for comment in 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 draft 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.

Detail is also provided on the composition of the board; term of office; disqualifications, vacation and removal from office; fiduciary duties and disclosure; meetings of board; committees of board; contents of register; requirements for registration; register of enrolments; funds and fees; compulsory information and contractual matters; adjudication of contractual disputes; enforcement and Home Building Manual.

According to the explanatory summary, the National Home Builders Registration Council had identified a number of challenges with certain key provisions of the Housing Consumers Protection Measures Act that impacted negatively on the efficient execution of the Council’s mandate.

The challenges, inter alia, relate to inadequate protection of housing consumers, the transformation of the industry, the high risk of litigation, the inadequate enforcement powers, the ineffective alternative dispute resolution mechanism and the excessive turnaround time of the current enforcement procedures.

The draft bill will be tabled in parliament soon.