Insights from Public Hearings on Housing Consumer Protection Bill 2021
Parliament conducted public hearings on the Housing Consumer Protection Bill 2021 to gather feedback and address common concerns raised by communities across provinces. Key issues included registration requirements for local builders, training for inspectors, coverage of dwelling units, and subcontractor registrations under NHBRC. The Bill aims to enhance consumer protection in the housing sector.
- Public Hearings
- Housing Consumer Protection Bill
- Community Feedback
- Registration Requirements
- Inspector Training
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Presentation Transcript
PUBLIC HEARING ON THE HOUSING CONSUMER PROTECTION BILL, 2021
Presentation Outline Background; Report on Public Hearings Conducted by Parliament in nine (9) Provinces: Comments/ Inputs/ Questions on the Bill; Common issues of Service Delivery 2
Background Parliament has published the Housing Consumer Protection Bill in 2021 for the purpose of public consultation. Parliament subsequently embarked on the process of conducting public hearings in provinces in 2022; This presentation will deal with critical inputs made on the Bill and issues of common concern raised by members of the communities in the provinces visited by Parliament in the second and third quarters of 2022. 3
Comments/ Inputs/ Questions Raised On The Contents Of The Bill During the consultations, the public and the representatives of the committee engaged on the Bill. The following issues emerged from the public: Comment: Local homebuilders are not contracted in local projects because they are not registered with the NHBRC. Response: Registration as a home builder is mandatory when constructing homes. It is also a requirement before a project can be awarded to a homebuilder. Local Builders were advised and encouraged to seek assistance from the NHBRC regarding registrations 4
Cont Comment : NHBRC to improve on training and capacitation of inspectors. Response: The Bill covers the qualifications and duties of an inspector. It covers an offering or receiving gratification by any inspector, as a reward or incentive for that inspector to do anything he or she should not do is prohibited. Sections 70 to 72 empower Council to professionalise the Inspector function Comment: Request that the Bill should cover a dwelling unit that does not have its own bathroom or kitchen. Response: It is noted (the Bill and its application is aligned to town planning schemes of a dwelling unit) 5
Cont Comment: Clarity sought on appointments of sub-contractors that are not registered with the NHBRC: Response: In terms of the Bill registration is required from both the main contractors and sub-contractors, and such misconduct has to be reported (all home builders must be registered, whether they are appointed as the main or sub-contractor). 6
Cont Comment : Issues of economic transformation of the building industry: This issue was raised in all hearings. Response: The Bill provides for that, and also, the Minister has announced that 40% of the projects in the built industry must be set aside to the designated groups. Comment: Clarity on commencement period of the warranty cover. Response: The commencement of the warranty cover from the date of commencement of construction in terms of the Bill, as opposed to the date of occupation in the current Act. 7
Cont Comment : Complaints that homes are not inspected, inspectors not visible or inspectors approving poorly constructed structures. Response: The Bill provides for personal liability against inspectors. Comment: The warranty cover for roof leaks to be same years as structural cover. Response: Noted (also noting that section 41(2) extended the roof leak cover to 24 months) 8
Cont Comment: Consumers need education and the visibility of the NHBRC. Response: The NHBRC is expected to increase its visibility and open additional branches in remote provinces like the Northern Cape. Comment: Ensure competent Board. Response: Competent persons with qualifications, skills and knowledge of the home building sector should be appointed. Section 6 of Bill addresses the issues of persons who should serve in the Board. o 9
Cont Comment: Complaint that the penalties are too high and upcoming home builders will not be able to afford same. Response: The Department has noted that the builders are concerned about the maximum fine, and has indicated that the amount is only a maximum fine. Comment: Public request that the NHBRC annual fee be allowed to cover 3 years. Response: The Department has noted the issue and will consider same. 10
Cont Comment : Exclusion of rural communities Response: The current Act and the Bill apply to any house in the Republic. The homebuilder must be registered and compliant be registered with the NHBRC and also that the house must be enrolled. Where there is non-compliance a stop build directive is issued. Once resolved the builder will be allowed to resume work. Comment: Provide for the enrolment of additions, alterations, renovation and repairs of homes: Response: The enrolment of additions, alterations, renovations and repairs are issues that will be addressed by the Minister in the Regulations, enabled by section 2(3) of the Bill. 11
Cont Comment: On Training and Empowerment Initiatives including youth and women. Response: The Bill in section 14(1)(g) seeks to ensure that the NHBRC provides training programmes to homebuilders. Section 14(1)(h) is also intended to ensure that the Council reaches out to consumers by way of consumer education programmes. Comment: Bill excludes structures in informal settlements, and excludes the most vulnerable part of the population from protection under the Bill: Response: The warranty fund cannot assume risk for homes built in informal settlements until the settlements are formalised. 12
Comments by Master Builder Association and Development Action Group Comment: Need for the building industry to be self regulated. Response: The Bill seeks to maximise protection of the interest of the housing consumer through the warranty cover. This is an issue of public interest and therefore should be legislated by government. Comment: The registration and enrolment of a home or addition, renovations or repairs to a home will create financial burden for the homebuilder and will discourage improvements of homes. Response: NHBRC advised that the registration of the homebuilder is once off and the annual fee is for the renewal of the registration. Registration of home builders and enrolment of homes are obligations set out in the current act and the Bill. The latter ensures mandatory protection of housing consumers, though regulation of the home building industry and warranty cover for all housing consumers. . 13
Cont Comment: Comment: Owner-builder exemption should not be removed Response: The Bill affords protection to all housing consumers including owner builders. Public interest requires that an owner builder be included in the dispensation to ensure compliance with Technical requirements and warranty cover. Comment: NHBRC training not sufficient for someone to become a skilled builder. Response: The submission on suggestions on improving training and skills development are welcomed. 14
Service Delivery Related Matters Raised Comment: Delays or non-payments to sub-contractors by main contractors: The Government must mandate the main contractors in the SLAs to provide report of payments to subcontractors on regular intervals. This is an intervention mechanisms that can prevent the exploitation of emerging contractors/ sub-contractors. Response: The Minister has issued a directive to all Provinces to ensure compliance with the provisions of the PFMA on payment period compliance. Oversight is also exercised in MinMec 15
Cont Comment: Fairness, transparency and compliance with issues of tenders. Response: Government policy provides clarity on the matter Various initiatives are in place to address non-compliance including SIU proclamations. The Minister has issued requests for audits where matters have been brought to the attention of Department and example include the PPRA Comment: No consultations with communities before constructions of RDPs commence; projects start without consulting the local communities. Response: The Code is clear on appointment of steering committees as well as conclusion of social compacts The current grant frameworks also stipulate conclusion compliance Social facilitation is also funded to improve community consultations 16
Cont Comment: Fraudulent conduct of sales of building materials by sub- contractors, identified by communities. Response: This is a crime and communities were requested to report these types of crimes to the SAPS. The contracts should also provide for contractors and developers to be held accountable for such loss. 17
Cont Comment: Are mortgage properties covered in terms of the Bill Response: Section 83 of the Bill requires Banks before approving mortgage bond applications to determine whether a home is enrolled with the NHBRC. This is applicable to newly build homes as well as alterations or additions. 18
Cont Comment: Engineers liability Response: Section 43(4) of the Bill gives Council the authority to hold professionals liable for the rectification or cost thereof in respect of any claim that can be attributed to any action or omission by the certification body or competent person. Comment: Conversion of commercial to residential properties Response: Section 2(4) of the Bill applies to any addition, alteration, renovation or repair of which the purpose is to convert a commercial building or part of a commercial building to a home. 19
Cont Comment: Subsidy houses differ in size from one province to the other. Communities want the size of houses to be standardised; Houses lack basic services; Old houses built with asbestos material; RDP houses used as rental units by owners. Response: The Code determines minimum norms and standards Provinces and implementing agents must meet the standard No house can be delivered without required services and Ministerial directive has been issued on eradication of asbestos. Recipients are required to advise Government if they wish to sell a house Province and Municipality must then advise beneficiary. Renting out of houses is not prohibited. 20
Cont Comment: Poor quality homes are being constructed. Houses must be built in terms of the national standard prescribed by Minister. Response: Any non-compliance should be reported and NHBRC, Province and Municipality conducts inspections. Comment: Subsidy programmes must take into consideration Persons living with disabilities Response: The Departmental programmes allow the beneficiaries to indicate that they are living with disabilities. The contractor will the be able to submit an application for additional funding in order to meet the special needs of beneficiaries. 21
Cont Comment: Concern raised regrading people not qualifying for subsidised homes. Response: Deficiency in improving communication and marketing of all housing programmes has been identified. Budgets are provided for marketing and communication Comment: Manipulation of the allocation process after the applicants pass away and beneficiary dependants are then left without houses; Response: The Minister will in due course undertake a process to approve a national allocation policy with relevant directives In addition digitisation of the process of approval and allocation intended to eradicate fraud and corruption in the process 22
Cont. Comment: Poor visibility of National Department Response : Housing is concurrent function and relevant spheres have budgets provided for communication and marketing and the Department also undertakes initiatives which includes consumer education, training and capacity building. Comment: Communities are not happy with toilets built outside the houses and far from the houses; Response: Minimum norms and standards as well as regulations determine positioning and provision of services Comment: Long waiting times based on waiting lists Response: The Minister announced the digitisation of beneficiary lists. This will ensure openness and fairness, also minimize fraud. Comment : NHBRC not accessible Response: The entities have been requested to address improving their profiles as well as service offerings to the public. The NHBRC is already embarked on a digital process to service home builders through online services for registrations and renewal of registrations. 23
Cont. Comment: Small Business contractors to be assisted or empowered on capacity building and access to funding; Response: A number of government wide programmes are available to assist SMME s Within the sector the Provinces and Entities have a number of programmes for training as well as funding to improve sustainability of the contractors and developers. Comment: Approved for allocation and houses allocated to a different person Response: The approval of a national allocation policy as well as digitisation of the process of approval will assist with fraud, corruption and manipulation of the allocation process 24
Cont. Comment: Prevention of illegal house occupations; Response: Introduction of rapid land release programme, as well as directives on approval of beneficiaries prior to construction of homes with digitisation process. Comment: Slow process on the Rectification Programme There are pre- 1994 houses with roof leakages and structural challenges not being rectified; Response: Provinces have to balance prioritisation based on current and existing backlogs Ministerial approval is required for rectification based on ensuring all efforts exhausted to hold developers and contractors liable for poor workmanship 25
Cont. Comment: There must be intervention to ensure that unfinished projects are completed; Response: A Ministerial directive has been issued that all project blockages are addressed within a period of three years. Comment: Family disputes on ownership of the houses. Response: A national framework to resolve the disputes has been issued Matter related to arena to address the disputes is receiving attention. Comment: It was requested that subsidised houses be built with solar geysers; Response : The current subsidy quantum does not include cost of energy provision Department of Minerals and Energy provides a grant and oversees policy on energy provision Programme for solar geysers was initiated and Department has requested update on the matter. 26
Cont. Comment: Resolution of title deeds backlog: Response: The Department has revised the action plan for the Title Deeds Restoration programme with specific interventions to address the delays in the registering and issuing of title deeds in subsidised housing projects. The interventions include a) Ensuring the provinces and municipalities issue title deeds already registered b) Resolving delays in the planning approvals and township establishment within municipalities; c) Mechanisms to allow for ownership disputes to be resolved to then allow for a title deed to be registered; d) Assistance from the Department of Justice and Constitutional Development to address the reporting of deceased estates; e) The declaration of a Ministerial Project to expedite the issuing of title deeds in Mabopane, Winterveld and Ga-Rankuwa (MAWIGA) 27
Recommendations 1. The Department will establish a Task Team that will be headed by the Inter-governmental and Stakeholder Relations Unit, which will engage relevant Municipalities and Provinces to account to issues in their areas and address concerned communities. 2. An inspection of the project in Worcester that comprised dignity of households will be carried out, and a report provided to the Portfolio Committee 28
Thank you 19
