The 4th of June marked the 21st anniversary of the coming into effect of the Housing Consumers Protection Measures Act and the National Home Builders Registration Council.
Over the past 21 years the NHBRC has moved from being a Section 21 not-for profit company which was about self-regulation and protecting the interest of the builders with little or no emphasis on the protection of housing consumers to a statutory body with a mandate to regulate the home building industry and protect housing consumers.
In 2002 the NHBRC mandate was extended to cover subsidy houses.
However, this hasn’t been an easy feat as NHBRC identified a number of challenges with certain key provisions of the Act, which impact negatively on the efficient execution of the Council’s mandate.
This will hopefully change when the new bill is passed into law which will usher-in a new era and dispensation for the NHBRC to realise its mandate of being a true champion of housing consumers.
A year ago, on the 13th of August 2019, Cabinet approved publication of the Housing Consumer Protection Bill, 2019 for public comments, prior to being recommended to Parliament for final approval and promulgation.
The new Bill, once passed into Law will allow the National Home Builders Registration Council (NHBRC), to ensure adequate protection of housing consumers and effective regulation of the home building industry through, amongst others, strengthening protection measures, regulatory and enforcement mechanisms as well as prescribing appropriate sanctions or penalties against defaulting persons.
So, where did it all start!
Prior to the advent of democracy, in 1992 there was a National Housing Forum which consisted of all major stakeholders in the housing sector that had to develop a housing strategy and policy for South Africa. In November 1993, Parliament passed the Housing Arrangement Act and this Act established the National Housing Board and four Regional Housing Boards
In the weeks following the historic democratic elections on the 27th of April 1994, the then Department of Human Settlements consulted with a number interest groups in order to devise an effective housing strategy. The late former Minister of Housing Joe Slovo signed an agreement with the Association of Mortgage Lenders to bring the banks into the low income market. He also moved to finalise the establishment of the National Housing Finance Corporation (NHFC) which sought to attract private investment into the low-income sector.
The first Housing Bill of 1997 was passed and the Housing Act was amended several times and this Act scrapped all old housing legislation and it replaced them with a single piece of legislation. This led to the establishment of the National Housing Board and unlike the previous National Housing Board, this board was a juristic person.
The National Housing Development Board took all the assets of the different boards into a single board and the department changed from having zero assets to many assets. All the assets vested in the National Housing Development Board were to go to the Provincial Housing Boards. Then the MECs would be able to take over the assets and the assets of the provinces can then be vested to the local authorities.
However, some builders built poor quality units and as a result the home owners were left without a remedy as the houses had defects which led to the home owners refusing to pay rates and taxes.
In 1995, the National Home Builders Registration Council (NHBRC) came into being but this provided little help to its members. At the time the industry had a problem with fly-by-night-builders who were conning people all over the country. The late former Minister of Housing Joe Slovo was quoted saying: “Housing consumers do not have any form of protection against fly-by-night contractors who deliver poor quality structures, nor do they have access to a database of reputable builders who are legally bound to their contracts and produce quality work. This is critical within the low-income housing market as it has the potential to disrupt housing delivery”
Following the untimely passing of Minister Slovo in 1995, Minister Mahanyele took over the Human Settlements portfolio. She spearheaded the drafting of a bill to end self-regulation by the building industry, and gave statutory recognition to the National Home Builders Registration Council.
The NHBRC was established in terms of this Act and dealt with all problems relating to building of houses and monitoring of building activities.
As of the 1st of December 1999, all home builders were required to register with the NHBRC, and no financial institution was permitted to lend money against the security of a mortgage bond unless the builder is registered and every home which is built is registered with Council. This ensures that the home owner is protected.