Page 67 - Q&A

Homebuilders and developers must take note
of the new Housing Consumer Protection Bill

January 2020
“I used to run a small construction company before I retired. My wife and I now
want to build our retirement home on an erf we bought a few years ago for this
purpose. One of my previous construction partners now tells me that there is
new legislation coming that will require me to register with the National Home
Builders Registration Council (NHBRC) if I am going to build my home. Is this true
and will it apply to me if I only build my own home?”
You are correct about possible changes coming. Towards the end of 2019
the Minister of Human Settlements, Water and Sanitation published the new
Housing Consumer Protection Draft Bill, 2019 (“Bill”), which Bill is intended to
replace the existing Housing Consumers Protection Measures Act completely
and may bring sweeping changes with it.

The Bill states that it will apply to the building of a new home and to any Property
addition, alteration, renovation or repair of a home, in so far as such requires the
submission of building plans to a municipality. Essentially, all changes (including
building) that is required to have a plan submitted to the local municipality,
will have to comply with the Bill. The current exemption contained in the Housing
Consumers Protection Measures Act 95 of 1998 (“Act”) that a person who uses
his own labour to build a home and builds for his own occupation if the home
is part of an approved PHP Project will no longer apply. Rather, exemptions in
the new Bill focus on whether the structure is co-owned as defined in specific
legislation or whether the structure is a temporary building, caravan, informal
settlement, hotel or motel.

Another change is in respect of the registration as a homebuilder at the NHBRC.
The Bill places an obligation on the NHBRC to establish and maintain a register
of homebuilders and developers. This means that each person or entity who
wants to build a home, whether it is for personal use or as part of your business,
will have to apply to the NHBRC to be registered as a homebuilder and will have
to pay the prescribed annual fee. The NHBRC is also required to keep record
of each home that is to be built and this will place a further burden on the
homebuilder or developer to enrol each and every home with the NHBRC before
construction commences as well as to pay the prescribed enrolment-fee.
The Bill also changes the timeframes placed on the warranty cover that a
homebuilder should provide to a homeowner who purchases or occupies a
home of the homebuilder. In the Act the warranty cover for a roof leak for a
newly-built home is 12 months, but this period will be extended to 2 years from
date of finalisation of the construction of a home, to extend the period for a
homeowner to institute a claim for repairs. The time period for the rectification of
major structural defects however remains five years as is in the Act.

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