Rental Amendment Bill: Departmental briefing

Meeting report

Rental Housing Amendment Bill
Chairperson’s opening remarks
The Chairperson said the Rental Housing Amendment Bill (the Bil) would be presented by the Department of Human Settlements (DHS or the Department) but there were some questions around why this Bill was not introduced by the June deadline date. This Bill was long overdue, and the Committee needed to plan to see how many Bills it intended to deal with in each year. This would ensure that the Committee  programme was consolidated, and would help the Committee to prepare. Some Bills were easy to deal with, but some needed intensive research. She commended the Department’s legal unit for cooperating with the Committee.

Department of Human Settlements (DHS) briefing
Mr Khwezi Ngwenya, Legal Advisor, Department of Human Settlements, promised that the Department would provide its legislative programme to the Committee in January, so that timeframes could be worked out.

He noted that the Rental Housing Amendment Bill (the Bill) was amending the Rental Housing Act, No 50 of 1999 (the Act). The main reason was to address the legislative and administrative issues around the Rental Housing Tribunal (RHT). He said the amendment made mandatory the establishment of the Tribunal in all provinces, and also allowed the RHT to rescind its rulings.

He noted that the consultation process on the proposed Bill was conducted in the previous year, and the draft bill was distributed to stakeholders. He said that, as required by the law, the Department conducted information sessions in all provinces. The sessions were attended by provincial Legislatures, provincial governments, provincial RHTs and private stakeholders. There had also been consultation with the National Economic Development and Labour Council (Nedlac) prior to finalising the Bill.

Mr Ngwenya said the amendment addressed the definitions in the Act. The word “Minister” would be substituted with “Minister of Human Settlement” and the Department would be mentioned by its new name of the “Department of Human Settlements”.

He said the Department wanted to have a formal and uniform process followed by all RHTs in provinces. The challenge was that each province formerly had its own regulations, determined by the MEC. The Department had now reached a point where the regulations had to be elevated to the level of being determined by the Minister, not a provincial MEC. He said the amendment stated that regulations would be the responsibility of the Minister.

Mr Ngwenya also noted that the Bill was seeking an amendment to section 6 of the Act, and would apply to all provinces. This would ensure that there was uniformity in the processes and procedures in the Rental Housing Tribunal. The original Act had stated that unless a province had an RHT, the chapter would apply. This created a situation where provinces had discretion whether they wished to follow the national regulations. The amendment would now ensure uniformity in the processes followed by the RHT.

Mr Ngwenya said the amendment of section 7 of the Act would ensure establishment of the RHT in all provinces. Some of the provinces had failed to establish the RHT, despite the fact that they needed to do so, and only now were the Eastern Cape and Free State attending to this. The original Act had provided a discretion as to whether the MECs should establish RHTs, but now not one of the provinces could claim that they did not have rental stock.

Mr Ngwenya said that people rented in rural areas for purposes of finding employment on farms. Those were the very people that the Department needed to protect, so even the rural provinces would have to establish RHTs, and this was the reason why the Department needed now to specify that the RHTs must be established, as opposed to “may” be established.

The Bill proposed that the composition of the RHT be six members, two of whom needed to be legally qualified persons. This was geared towards a scenario where there were different sittings of the Tribunal. The reasoning behind the call for two legally qualified persons was because the Tribunal might sometimes be required to deal with technically legal issues, like lock-outs, interdicts, or repossessions, and there was a need to have legally qualified people to advise other tribunal members on processes.
Mr Ngwenya said members would not be appointed for more than two consecutive terms, since the Department did not want members to expect permanent employment with RHT, and it was not intended that people should be appointed for life. The Act had not imposed this restriction on the number of terms that could be served. If it were merely left as it was, members would try to be reappointed and seek to influence the processes.

The amendment to section 13 of the Act would allow that the rulings of the RHT could be rescinded. It was a general rule in law that the same authority that introduced something could abolish it in the same manner. This would counter a situation where the Tribunal might have made a ruling on false information or misrepresentation of facts and in principle, if there was an error, it should be capable of correction. This was a normal occurrence even at magistrate’s court.

Mr Ngwenya noted that the last amendment was a change of wording from “local authority” to “local municapity”, in conformity with the wording in the Municipal Systems Act.

Discussion
Ms M Njobe (COPE) asked if provinces would still have their own legislation to regulate the rental aspect of human settlements. It seemed as though provincial regulations were not necessary, and so she enquired what might happen to any regulations that had been drafted and that the provinces were implementing.

Mr Ngwenya replied that the intention was that provinces must now stop developing their own regulations. Once the national regulations were promulgated, these would, as was usual, have the effect of repealing the provincial regulations. There would be enough communication, through the Government Gazettes, as to when the national department’s regulations would take effect. Provinces would therefore know when they were expected to move over and start using the national regulations. All responsibility would in future be elevated to the national department.

Mr A Figlan (DA) sought clarity on clause 9, which dealt with the term of office. He asked if those people with legal qualifications, who were to sit on the Tribunal, were also restricted to serving only two consecutive terms.

Mr Ngwenya said the two legally-qualified members of the panel would be appointed the same way as the other members. The limit on sitting for two consecutive terms applied to all. When their term ended, the Department would follow the procedure and re-advertise, as required by the Act and new people would be appointed, again with legal qualifications. No special arrangement would apply to these members.

Ms M Borman (ANC) commended the amendments. She asked what kind of feedback the Department received from the consultation process and information sessions.

Mr Ngwenya replied that the Department had received a substantial number of comments from the public, some of which were then directly inserted into the draft Bill. The first comment related to the appointment of legally qualified individuals. All provinces had emphasised that the Department needed to ensure that legally qualified people were appointed to RHT panels. This would ensure they did not struggle with lease contracts. Leases were written in legal language, and the interpretation of leases was best left to a legally trained person. The second suggestion had been around the number of members to serve on the RHT. He said the suggestion was six, and a quorum was put at three. This could allow for a split of the members and they could hold two different sittings at the same time. Another suggestion had been that municipalities should be used to host a rental housing information office. He said although this service was already happening, municipalities raised a concern that they did not have enough resources to appoint information officers. However the majority of the local municipalities were already performing this task.

The Chairperson wanted to know if it was possible for local magistrates also to be used as information officers, especially if municipal offices were far distant from the stock. If an ordinary person were to complain to a magistrate, as an official of the court, there would be a cost involved. She asked if the Department had considered this arrangement.

Mr Ngwenya said the Department had engaged with the Department of Justice and Constitutional Development, more especially on the enforcement of the rulings. He said consultations were continuing about the role of the courts and justice officials. In cases where the municipal offices were far distant, it had been arranged that the Clerk of the Court would facilitate the process of filling documents and invite the Tribunal to hold its hearing at the court. He said this was already happening in Centurion in Gauteng, but needed to be extended also to other places.

The Chairperson also wanted to know about the capacity of the RHTs as an institution.

Mr Ngwenya replied that there was a unit at the Department that dealt with the support and the issues that related to capacity development. He said the unit had undertaken initiatives to ensure that capacity of the RHTs was developed. He said the unit had done training on mediation, and had held informal courses on conciliation. There were a number of courses that national department had initiated to improve capacity of the RHTs. He said the kind of support the Department would provide would be clarified further in the regulations.

Mr Figlan wanted to know if the Tribunal would work together with the Ombudsman.

Mr Ngwenya replied that it would be critical for the two bodies to work together. It was important to say that the Rental Housing Tribunal and the Ombudsman would work together, so that the matters dealt with at the Ombud's office could be referred to the Tribunal. He said both institutions dealt with dispute resolution. The Tribunal would deal with the Rental Housing sector, while the Ombudsman would deal with issues of ownership. These institutions would be compelled to work together as there were no reasons for not collaborating. As soon as the Ombudsman had been established the two bodies needed to sit down and agree on the working relationship.

Ms Njobe queried the amendment in relation to the rescission of rulings. She wanted to know the reasons for this and asked if there was some way to guard against abuse of this provision. She would not like to see the situation where decisions were rescinded wholesale, because this had an impact on stability, and it was necessary to avoid making decisions that were not well thought-through in the first place.

Mr Ngwenya replied that the Tribunal would not be doing rescissions unilaterally. The Department, through the amendment, had clearly said the Tribunal could only act “on application” to effect this. Therefore, the affected parties needed to submit an application to say that a particular ruling was granted because of a common mistake by both parties. It would cost more if these parties had to take the normal route, rather than applying for a rescission from the Tribunal. In a formal sitting, the Tribunal could then rescind, and should be able to provide reasons on rulings that were rescinded. He said this process was used in other instances in the legal system.

The Chairperson said it was important for the Bill also to provide timeframes for rescission. She said it could also happen in municipalities that errors occurred in the decision making, but there was a grace period of 21 days that was allowed for such errors to be raised and corrected.

The Chairperson questioned if it would be fair to allow a Tribunal Chairperson to determine meetings and venues alone, as the Bill seemed to suggest.

Mr Ngwenya replied that the Department wanted to recognise the authority of the Chairperson. It was important for the Chairperson to always be at meetings, and offer guidance. He said it was a possibility that a Chairperson might seek to dictate where meetings would be most convenient to him or her, but that responsibility and guidance would be needed.

The Chairperson understood what the Department was trying to achieve but cautioned that perhaps other safeguards to prevent dictatorial behaviour of a Chairperson needed to be included.

Ms Borman suggested that the words “in consultation with other members” be included, so the chairperson would still be able to decide finally on meetings and venues.

The Committee agreed with the suggestion.

Mr Ngwenya took the Committee through the Bill line by line, and showed where all the amendments were in the Act. He said it was important that education provided to the Tribunal be extended to landlords and tenants, especially as it pertained to the right to terminate a contract. The Tribunal could decide upon issues such as rental prices and could inspect dwellings, and make a determination on the rental. He said the Department did not want to chase investors away from the rental housing sector. This was the reason that the legislation provided for both the rights of the landlord and the tenant.

The Chairperson said the next step would be to advertise the Bill, as it was a Section 76 Bill. She asked Members to speak to the Bill at their constituencies. She requested that the Bill come out as it was presented, and agreed to, before the Committee. For the next two weeks the Committee would await public comments, and would also conduct public hearings on 7, 8 and 9 of December.

Adoption of minutes: 19, 20 and 26 October
The Committee adopted the minutes of meetings held on 19 and  20 October 2011.

The Chairperson noted, in respect of the minutes of 26 October, that it was agreed that Members could raise any issues through the Chairperson’s office. Nothing had been heard from Members. The matters arising were noted as the R104 million loss by Servcon, as well as the R9.2 million salary figure. The Committee needed an explanation on both, particularly a breakdown of how a person earned that amount of money. The Committee also needed to get the reports that Servcon submitted to Gauteng and the Eastern Cape, and see if those provinces were satisfied.

Ms Njobe sought clarity on the R92 million mentioned in the minutes, that the Department of Public Works apparently had refused to pay to Servcon.

Mr Matshoba wanted to know how Servcon and Transnet could have custodianship of land that belonged to DPW.

The Chairperson explained that the land was bought by Servcon from Transnet for the Department of Human Settlements. DPW had to pay R99 million; but it felt the amount of work was only worth R7 million. She pointed out that it was possible that municipalities and provinces also owned land. Land ownership by government departments was an issue that needed to be addressed by the political principals. She said Servcon had the mandate to buy on behalf of the Department. The Committee needed to verify the information on the dispute between DPW and Servcon, by inviting both parties to address the Committee, as its report would be incomplete without presentations from both. The Committee could also seek legal advice on how to resolve the matter.

Mr Figlan suggested that Servcon should come and clarify its expenditure, as it was an entity of the Department.

The meeting was adjourned.