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Housing Consumer Protection to receive a facelift
BY PHILIP THOMPSON & MARIKAH CALO | THE NETWORK
PUBLISHED: 18 SEP 2019
The Housing Consumer Protection Bill (the Bill) was published for public comment on 30 August 2019. The Bill will ultimately replace the existing Housing Consumer Protection Measures Act (the Act). The Bill envisages the replacement of the existing National House Building Registration Council (NHBRC) a new regulatory body – the National Home Building Regulatory Council (the Council).  While many core features of the Act are retained, the Bill aims to improve the protection afforded to housing consumers and more stringent regulation of home builders. 
 
Some of the notable sections in the Bill are dealt with in this article.
 
The definition of a housing consumer 
 
The definition of a housing consumer has been extended to create an unlimited class of housing consumers. This means, for example, that beneficiaries of subsidised housing programmes (as contemplated in the National Housing Code) will be included in the definition. This would be a welcome inclusion as currently under the Act many de facto housing consumers are excluded from protection, in particular that afforded by the Home Warranty Fund.   
 
The definition of a homebuilder
 
The definition of a homebuilder has been amended by the deletion of the word “person”. In a recent SCA decision the Court determined that a “person” for purposes of the Act included a trust. The question remained, however, whether “person” is inclusive of all other types of juristic person. The Bill will clarify the position by stating that a homebuilder may be a company, close corporation, partnership or trust.  
 
No registration equals no consideration
 
A distinguishing feature of the Bill is the omission of section 10 of the Act which states that no person is entitled to receive any consideration in terms of any agreement with a housing consumer in respect of the sale or construction of a home if that person is not registered with the NHBRC. The application of section 10 was affirmed by the Constitutional Court in 2013. This provision has been dropped in the Bill and the onus now rests on the housing consumer to ensure that the homebuilder is registered prior to concluding a building agreement. The Bill however does introduce a prohibition against homebuilders from procuring construction work unless registered. Section 78 of the Bill provides for the imposition of a R1,5 million fine or a period of imprisonment on homebuilders who fail to register.
 
Further regulation of construction contracts
 
In addition to the implied contractual warranties imposed by section 13 of the Act relating to quality of workmanship, section 49 of the Bill provides that building agreements are deemed to include a warranty by the homebuilder that: 1. the homebuilder is registered with the NHBRC; and 2. the home is enrolled in terms of the Act. Further, in the event of a housing consumer having to vacate his home due to structural defects, the homebuilder is liable to pay for the reasonable relocation and accommodation costs of the housing consumer until the necessary remedial work is completed. If the home forms part of a new development, the developer will be jointly and severally liable with the homebuilder.
 
The Home Warranty Fund
 
The Bill retains the warranty fund (now to be named the Home Warranty Fund). The Bill also retains the five-year warranty period for major structural defects but extends the currently existing 12 month warranty against roof leaks to 2 years. As is the case under the Act, the housing consumer must first call on the homebuilder to remedy the defect before looking to claim against the Home Warranty Fund. 
 
The Bill is still open for public comment until 29 October 2019 so there may be further iterations before it is promulgated. While many of the changes proposed by the Bill are welcomed, the implementation of those changes will determine whether housing consumers will enjoy better protection than they do currently.  
 


ARTICLE BY:

PHILIP THOMPSON is a Partner at Cox Yeats Attorneys practising in the Construction Law Team where he specialises in construction litigation and alternative dispute resolution. 
MARIKAH CALO is a Candidate Attorneys serving her articles in the Construction and Commercial Law Teams.

 

They can be contacted on 031 536 8500 or via email: pthompson@coxyeats.co.za and mcalo@coxyeats.co.za.

 

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