All homebuilders must register under New Housing Bill | Legal Articles


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All homebuilders must register under New Housing Bill

New Housing Consumer Protection Bill 

The application of the draft Housing Consumer Protection Bill - which was published in August and aims to repeal the existing Housing Consumer Protection Measures Act - will extend to any addition to, alteration, renovation or repair of a home insofar as any of these necessitates the submission of building plans to the local authority. 

The existing Act only applies to a person who carries on the business of a homebuilder. 

In terms of the new Bill, any homebuilder or developer who undertakes or commissions the building of a home must apply for registration with the National Homebuilders' Regulatory Council (NHRC) - and that there are no exemptions from registration such as allowed by the current Act.

Owner-Builders must also register 

This means that every homebuilder - including a person who builds a house or a home for himself or herself (An owner-builder) - is now also required to be registered. 

The NHRC may - in addition to creating a 'Home Warranty Fund' - establish a non-profit company to create mechanisms for risk-based insurance offerings, relative to the structural integrity of a home. 

While the existing Act imposes an obligation on conveyancers attending to bond registrations to ensure that a homebuilder is registered in terms of the Act, there is no prescribed penalty for the failure to do so.

Conveyancers now obliged to ensure compliance 

Clause 84 of the new Bill requires the conveyancer to ensure that a new home is duly registered. If a home is not registered, conveyancers will have an obligation to inform the NHRC and the Registrar of Deeds accordingly. 

The NHRC may report a conveyancer who does not comply with the provisions of this clause and this will apply in regard to both bonds and transfers. 

In terms of the current Act, any person who contravenes the Act or permits such contravention shall be guilty of an offence and liable on conviction to a fine not exceeding R25 000 or imprisonment for one year. However, under the new Bill, this has been increased to a maximum of R1.5m.

Van Deventer & Van Deventer Incorporated - Property Conveyancers Johannesburg & Cape Town

In an effort to protect the consumer, government is imposing stricter controls over the structural and safety outcomes in home construction.

Compliance with the obligations of the new Bill may however be difficult at the lower end of the home building market.

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