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Parliament Briefed on Housing Consumer Protection Bill

March 22, 2022

Department of Human Settlements

The human settlements department recently briefed parliament on the Housing Consumer Protection Bill.

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.

During the briefing to the portfolio committee on human settlements, the department compared current legislation with proposed provisions in the bill.

Changes highlighted by the department include expansion of definition of home; definitions on MEC and member of municipal council; expansion of exemptions; reference to town planning and property development expertise on board; appointment of CEO and CFO by board; minister to prescribe reimbursements to housing consumer for losses; Council to prescribe conditions and monetary threshold for adjudication services at the cost of council; duties of inspectors relating to anti-corruption, conflict of interest and using confidential information for personal benefit extended to CEC members; inspectors and investigators given powers of a peace officer in terms of the Criminal Procedure Act and duty on Registrar of Deeds removed as deeds office is concerned with registration of property and not necessarily the home.