Rental Housing Amendment Bill [B21-2011]: deliberations

Meeting report

Opening remarks
The Chairperson said there were a lot of difficulties with the Bill and more information was needed. The Committee wanted a Bill that would be helpful and user-friendly. She said there was no consistency between the principal Act and the Amendment Bill and the Committee should apply its mind and clean up the Bill. She said it was possible that the Committee could recommend the Bill be redrafted. When people on the ground read through the Bill, they would be confused.

Proposed Amendments presentation
Advocate Charmaine van der Merwe took the Committee through the proposed Portfolio Committee amendments to the Amendment Bill and how they should read once the Bill was finalised. These included:
▪ The establishment of Tribunals within a budget period
▪ Membership of the Tribunal
▪ Succession
▪ Split meetings
▪ Requirements for incumbents
▪ Timeframes for rescission of rulings
▪ Appeals

She said if the Amendment Bill was passed only in the second session in May, it would take longer for it to be operational, while if passed in this session by March, it could commence in the coming financial year.

Ms van der Merwe said it would be ideal for the Bill to accommodate succession as this would allow for continuity and transfer of skills.

She said a provision needed to be made for a Deputy Chairperson, for those times when split meetings were held at the same time. The quorum of Tribunal meetings was three, where one of the sitting members needed to possess a legal qualification. Another member should be any of the two other specified fields – property development or consumer relations.

She said the Amendment Bill needed to set timeframes for rescission, appeals and reviews. In an instance where there was a mistake, that needed to be corrected as soon as it was discovered. She said appealing the Tribunal’s rulings through the court system was not permissible because there were no logical links. The Tribunal needed to have an internal appeal mechanism, provided tribunal members who made the ruling were not party to the appeal. In an instance where the ruling was made by all six members of the Tribunal, the Chairperson might appoint a six member committee with the requisite skills and expertise as prescribed in the Act.

Discussion
Ms M Njobe (COPE) said she was happy with the proposed amendments but the contemplated 14 days for appeals was too short. This was taking for granted that the person affected by the ruling would have been informed immediately after the decision was made. She asked if it was not possible to accommodate for a period for communicating the decision. Communication was a challenge in South Africa, and could take well over 14 days to communicate such decisions.

Mr A Steyn (DA) said a time limit allowance needed to be made for the Tribunal to rescind its own ruling. Although he agreed with the provision for appeals, there needed to be conditions when appealing. The Committee needed to guard against those affected by tribunal rulings who made use of the appeal mechanism to delay justice. Therefore the Committee needed to add something under the prescribed manner in which to launch appeals.

Ms van der Merwe replied that the 14 days was a suggestion, and could be changed. She suggested that the 14 days should be after the person affected had received communication of the verdict. The suggestion that the Tribunal be allowed the same period if it wanted to change anything pertaining to its ruling was fine. Also, prescribed conditions could be added in respect of appeals.

Ms M Borman (ANC) enquired about the financial implications of the Bill. She was aware of what unfunded mandates were doing to local government. The Gauteng Tribunal submission indicated that unfunded mandates and the failure of local authorities to commit to the formation of information offices were a challenge. The functions of the office were huge and she was concerned the Committee was brushing off the costs involved. Municipalities were really stretched and could not be expected to add items onto their operations.

Mr Steyn said he was not too concerned about the funding especially as the national Department would be lending a hand. The cost of hosting information offices should not be a worry as municipalities, especially the metros, should have these offices. These were just additional matters that any official attending to housing related matters needed to be made aware of. He welcomed the fact that the Department said it would provide training for such officials.

Ms van der Merwe agreed and said she was not aware of any rule that limited the National Assembly from passing legislation that concerned the finances of a different sphere of government. As the Bill was a Section 76 Bill (i.e. affecting the competence of provinces), there was a process after the National Assembly Committee deliberations where provinces could raise complaints about their budgets and sustaining the Bill. There was definitely an opportunity for provinces to voice concerns if the Bill placed a financial burden on them.

The Chairperson said although she agreed, the Committee needed to do a perfect job and state that provinces needed to adequately budget for the Bill. And it had to be implemented soon after the Budget speech. It had to be stated that provinces should provide financial support for municipalities, especially smaller municipalities. As legislators, the Committee needed to demonstrate commitment that whatever laws they passed, would be of assistance to the people.

Rental Housing Act
The Rental Housing legislation was read in its entirety in conjunction with the 2007 and 2011 Amendment Bill.

The proposed amendments 
▪ Minimum costs and arbitrary eviction
The Chairperson said her concern was with the Preamble as a member of the public expressed concern that ‘arbitrary eviction’ should be defined, and yet the Department had failed to entertain that proposal. If this was not defined, then there was a problem.

Mr K Sithole (IFP) said the issue of costs and arbitrary evictions were indeed challenging. He asked what kind of eviction was that.

Mr Steyn said although the cost mentioned did not appear in the principal Act, he thought those were generally costs for laying a complaint.

Ms van der Merwe said the Committee needed to enquire from the Department about the minimum costs stated in the Act, and then decide if it wanted those. She separate a separate section on the right of tenants and landlords could be made, and a definition of ‘arbitrary’ eviction included.

▪ Rights of tenants and landlords
Ms D Dlakude (ANC) said the Committee needed to clearly define the rights of both tenant and landlord so that relations between the two were harmonised.

Ms Borman noted the suggestion by the National Housing Finance Corporation (NHFC), to provide legal means to protect the rights of tenant and landlord against illegal actions by either party. This fitted well with the Preamble where it sought to protect the rights of tenants and landlords.

The Chairperson said the Bill did not clearly specify the rights of tenant and landlord and was thus not user-friendly. The Act needed to be user-friendly.

Ms van der Merwe said this needed to be checked if it fitted with the policy. Sub-categories of the rights of tenant and landlord would be included.

▪ Evictions
Mr van der Merwe said the amendment was that the Tribunal could rule on repossession and the Committee had rejected that. As the Act stood, the Tribunal did not have the jurisdiction to make such an order.

Mr Steyn proposed that the Bill allow for the landlord to have ownership of a property once the lease had expired. When people refused to vacate, the right of the landlord was being infringed. This had happened before.

It appeared the Tribunal did not have jurisdiction to hear application for eviction orders.

▪ Lease agreements
The Chairperson said it was important that leases were arranged in writing. These must not be complicated; even a page should be enough and the Act should encourage that. People were taken advantage of; this Act was not meant for ordinary people but for the elite. These clauses should be written in the simplest language, if possible written in the vernacular.

Ms Dlakude agreed that if the lease was in writing, both parties could have proof. Payment should not be paid in cash, but deposited in a bank account. Landlords could be greedy sometimes depending on the tenant’s ability to generate income. A written agreement would bind everyone.

Ms Borman agreed and said without a written lease agreement, tenants were exposed to situations where they had to go to court.

▪ Composition of Tribunal
Ms Borman wanted to know if ‘membership’ was not a better word to use than ‘composition’. She thought of people who were not privy to such terminology. The Committee was saying it wanted to assist people on the ground to understand the Bill. Was ‘composition’ as explicit as’ membership’?

The Chairperson said there had to be agreement on which word to use.

Mr Steyn said he understood that legislation needed to be friendly and easy to understand, but there were conventional words that were associated with legislation. The Committee needed to guard against making the Bill too simplistic. He was nevertheless happy with either of the two words.

Ms van der Merwe said the word ‘composition’ was used regularly to mean what an institution would be made of. The word ‘membership’ would also not be incorrect, but in most instances it would be ‘composition’.

It was agreed that the Tribunal be made of seven members: a knowledgeable chairperson on matters of rental housing; two members with legal background; two with property development; and two with knowledge of consumer matters. It was also proposed that alternate members of not less than three and not more than six may be appointed. This body of people ought to be representative of different race groups, women and persons with disabilities as per constitutional requirements.

▪ Succession plan
Ms Borman wanted to know how succession of tribunal members would work in the Tribunal especially if members had acquired the same experience, and had served the same length of time.

Ms van der Merwe replied that there were a number of ways this could be done. In most instances the chairperson and the deputy chairperson were usually the last to go. Another way would be to monitor the attendance of meetings and based on better record, members could be replaced. Alternatively, individual members could be approached about the intention to relieve some people of their duties; or the MEC could simply draw from a hat.

▪ Rental amount
Members voiced unhappiness with the use of ‘supply and demand’ in the clause dealing with determination of rental price.

The Chairperson said the use of ‘supply and demand’ as an economic term was derogatory in rental housing. People were poor and relied on their child support grant to pay for rent. The Committee needed to do away with the mentality of ‘supply and demand’ in the legislation. She said rental determination needed to be looked at closely.

Ms Dlakude proposed that the wording be changed to state, “take due cognisance of the prevailing economic conditions”.

Mr Steyn said the Committee should not lose sight of the fact that the Bill needed to promote rental housing. If the Committee was too restrictive then the private sector would not provide rental housing.

The Chairperson said there had to be minimum standards for the regulations that would guide the Tribunal. Everybody, including the Members present, wanted to be in business, but the Committee had to guard against exploitation despite Members’ interests. There needed to be a restriction about the square metres.

▪ Information offices
Members said information offices needed to be established in all municipalities, as this function would be budgeted for.

The Chairperson said the use of the words ‘may establish’ needed to be changed to ‘must establish’. The national government would appropriate funds to the provinces for the function.

Mr Steyn agreed and said if it was compulsory for every province to establish a Tribunal there needed to be information offices. He asked if the Committee wanted to entertain the proposal by the South African Local Government Association (SALGA) that information offices be compulsory for only the accredited metros. He said in municipalities where there was no information office, there needed to be a trained official to provide information.

Ms Borman said she was not sure why metros were being treated differently to the smaller municipalities. The Committee was dumping more responsibility on the metros that already had a massive load. As the provinces would budget for these offices, why differentiate now which municipalities should have an information office. This was unfair to the metros.

The Chairperson said the reason for the different treatment was because the smaller municipalities struggled with generating revenue for their sustenance. Establishing the office would not be a challenge for the metros. She ruled that this matter would be flagged for further discussion when the Committee met again. However, the fact remained the smaller municipalities struggled more than the metros.

Mr Steyn said a housing information office did not mean a new office. If there was an existing office that dealt with the housing subsidy and related matters, this should be considered for use. What was merely required was people at such offices to have knowledge about rental policy and the Rental Tribunal. This might not necessarily lead to additional costs.

Closing remarks
The Chairperson voiced unhappiness that a sub-section which allowed for intervention by the Minister to ‘alleviate hardship that might be suffered by tenants’ was deleted. The Committee could not just look at protecting the rights of those who have. Why was this sub-section taken out by a previous Committee instead of being modified? This was where people were being exploited. Why a piece of legislation that benefitted the poor under apartheid should be taken out instead of modified? The sub-section defended the poorest people. She found it strange that the current government would repeal a sub-section – tolerated under apartheid – that protected the poor. A lot of poor people still rented because government had not reached a point where it could provide everyone with the two-room houses.

Ms Dlakude said people who worked on Acts sometimes had interests. She said this would always stand in the way of doing the right thing; and MPs ended up thinking of personal interests as opposed to those of the people. She said it could be that those who drafted the legislation had an interest in rental housing.

The Chairperson said the Committee would write to Parliament and ask for an extension. The Bill as it was needed a redraft and could not be passed.

The meeting was adjourned.