Rental Housing Amendment Bill: deliberations, Mangaung Metropolitan Municipality Built Environment Performance Plan presentation

Meeting report

Rental Housing Amendment Bill [B21-2011]:
Adv Charmaine van der Merwe, Parliamentary Legal Adviser, reminded Members that the Committee  had taken a decision to re-draft the Rental Housing Amendment Bill (the Bill), and she would outline some of the issues that were still outstanding.

Definitions
The first issue related to the definition of “habitability” on page 3 of the Bill.

Ms Bongiwe Lufundo, State Law Advisor, Office of the Chief State Law Advisor, proposed additional wording, so that the definition would read: “ “habitability” referred to a dwelling that was safe and suitable for living and includes….”

Ms van der Merwe said the proposal was acceptable as it gave further clarity.

Clause 7: Amendment of section  5 of Act 50 of 1999
Ms van der Merwe then outlined the second issue. She referred the Committee to clause 7(e), that dealt with what could be contained in a lease contract. The Committee had said that it wanted to ensure that contracts were straightforward, rather than intricate contracts made up of many pages. The first issue had to do with the wording. The State Law Advisors felt that the rights and obligations of the tenant and landlord should be set out in the contract itself, but the Parliamentary legal advisors thought that the contract only needed to make reference to rights and obligations as contained in the Bill, rather than having these stated in the contract in terms. The Committee would need to make a decision on what it wished to see.

Once the Committee decided on that principle, the wording could be tackled. Ms Lufundo had proposed that a new section  5(6) be inserted into the Rental Housing Act (the Act) , to read: “(fA) a reference relating to the rights and obligations….”, whereas Ms van der Merwe stated that she would prefer the word “contemplated” instead of the word “reference”. Once again, the Committee’s comments on this were needed.

Ms Lufundo explained that her suggestion for paragraph (fA) must be read with what had been proposed for section 6(g) of the Act. Whilst she was not totally opposed to merely making a reference to the rights and obligations of the tenants and landlord, she suggested that in this case, the Committee must refer specifically to their rights and obligations as set out in sections 4A and 4B of the amended Act. Paragraph (g) would then be worded to the effect that a lease agreement must contain the following information: obligations of the tenant and landlord, which must not detract from the provisions of sections 4A and 4B, or the regulations relating to unfair practice. A lease agreement had a provision dealing with rights and obligations. She felt that these must be clearly spelt out in the contract so that parties would know what was expected of them.

The Chairperson asked Ms Lufundo if she was suggesting that landlords and tenants sometimes signed contracts containing provisions or terms that were not in the Act, or that landlords might demand an increment on interest, without this being in the contract and without reference to the provisions of the Act.

Ms Lufundo stated that the terms of the lease were stated in the agreement. If the landlord attempted to charge something that was not agreed upon, that may be taken to the Tribunal.

Ms M Borman (ANC) stated that clarity was needed on this clause. She had no problem with the word “reference” and asked why the word “contemplated” should be substituted, as she felt it added nothing to the clause.

Mr S Mokgalapa (DA) stated that this was legal semantics. The Committee wanted a Bill that was simple and straightforward, and does not leave loopholes or engage in legal semantics. Mr Mokgalapa asked what the real difference was between the new wording now proposed for subparagraphs (fA) and (g). He thought that subparagraph (fA) meant that there should be a standard contract, into which the tenant and landlord had entered, taking cognisance of the rights and obligations of the parties as set out in the Act. If so, then there should not be any difficulties, as everything should have been covered. Anything ancillary would go to the Tribunal or to the Appeals body.

The Chairperson asked if the phrase should not read:  “…a reference to the rights and obligations of the tenant and landlord, which must not detract from the provisions of sections 4A and B….”

Ms Lufundo stated that the Chairperson’s proposal would make the clause clear. She had been trying to make a point in relation to the parties' rights and obligations that may not necessarily be stated in sections 4A and 4B.

Adv van der Merwe stated that paragraph (fA) provided that there must be a reference to the rights and obligations of the parties as set out in the Act. There was no need to state these rights and obligations in the contract, as they were already an implied term of the contract. However, the use of the word “reference” would enable the parties to know where to find their rights and obligations. However, the new subparagraph (g) dealt with other obligations. The Bill currently referred to: “any other obligations of the tenant and landlord not set out in sections 4A and 4B.” She pointed out that if an obligation was relevant to a particular contract, but was not stated in the Act, then it was necessary to state that obligation in the contract itself. In other words, subparagraph (fA) referred to what was set out already in the Act, and paragraph (g) referred to other obligations.

Adv van der Merwe noted that Ms Lufundo had proposed the deletion of the words: “any other” but she did not agree with that, and proposed instead that paragraph (fA) should read “…a reference relating to….as set out in sections 4A and 4B”, whilst subparagraph (g) would read “any other obligations…not set out in sections 4A, 4B or the regulations relating to unfair practice”.

The Committee accepted Ms van der Merwe's proposed wording of the clause.

Ms van der Merwe then addressed the new wording proposed for section 5(6) of the Act, set out on page 12 of the Bill, and asked if the Committee wanted the proposed proviso to be included in the clause. The amendment was drawn because of public comments received on the wording of the clause, relating to clarity.

Ms Lufundo thought that the wording was quite clear

Ms Borman stated that the proviso should be inserted, as the Committee was trying to ensure that the Bill covered every problem that may arise. It simply emphasised the facts. The proforma lease agreement may sometimes be used as a guideline.

Ms M Njobe (COPE) asked why there was a proforma lease agreement, if it was not going to be mandatory for landlords to use it. She would be in favour of this being a guideline.

The Chairperson suggested that the Committee adopt wording that stated that the proforma lease agreement “may” be used. She thought that the proposed proviso contradicted the wording of the clause.

The Committee agreed to the Chairperson’s proposal.

Language issue
Mr K Sithole (IFP) asked whether it was intended that all the provinces must use the eleven official languages, or whether the Committee was intending to refer to the languages being used nationally.

The Chairperson replied that it depended on the language that a province was generally using.

Mr Mokgalapa stated that the first issue was a matter of semantics. The word “may” was not mandatory and should be used.

Mr Mokgalapa wondered, in relation to languages, if the Bill should not refer to “regional languages” or “eleven official languages” or “the dominant language” in a province.

The Chairperson suggested that the wording be left as it presently appeared, and that the Committee should not prescribe for the provinces.

Ms Borman stated that if the wording was left in its current form, any person in a province who spoke another language could always obtain a translation in his or her language.

Adv van der Merwe stated that a reference to “the Minister” in the clause meant that the proforma lease agreement would be developed at the national level. It was expected that the Minister would have this document in different languages, and it would be made available by the Rental Housing Information Office on the internet, for downloading.

Clause 10: Amendment of section  9 of Act
Adv van der Merwe moved on to the new wording proposed for section  9(1)(a). One of the public submissions had suggested that the Chairperson of the Tribunal should have legal qualifications. That comment had not been taken account of in the current wording of the Bill, and the Committee needed to give the drafters some guidance on that issue.

Secondly, she noted that there were two proposals for the substituted section  9(1)(b). The first proposal was to state that for every three members, one shall be a person with a certain expertise. The second proposal was to state that for every three members, one shall be a person with a certain expertise, and for six members, two shall be persons with a certain expertise.

Ms Lufundo amplified that the clause dealt with the composition of the Tribunal. It would be four or seven members. A tribunal of four members would apply in the small provinces that may not need two committees, while a tribunal of seven members would be required for those provinces that might need two committees.

Ms Borman suggested that it would be clearer to word this along the lines of:  “one member, in respect of three members, and two members, in respect of six members, should posses a certain expertise”.

The Committee agreed with Ms Borman’s proposal.

Adv van der Merwe stated that the new sub-paragraph 9(1)(b)(ii) should then also be worded the same way, in order to achieve uniformity.

Adv van der Merwe then referred to new wording proposed for a new section 9(1C) that appeared on page 14 of the Bill. During the public submissions, one of the points raised was that the Tribunal should not function as “committees” but as “sittings”. She stated that the Committee's guidance was needed on this point. If the Committees sat separately, they were still sitting as a committee of the Tribunal. Ms van der Merwe stated that she saw no problem with using the word “committees”.

Mr Mokgalapa stated that this, once again, was just an issue of semantics. He asked what the legal ramifications of the two words were.

Ms Borman stated that the Committee’s concern was not about the name given, whether it was to be “committees” or “sittings”, but she thought that the concern was rather that there would be two tribunals. Whichever word was chosen, she thought it important to emphasise that it was the full Tribunal.

The Chairperson stated that it was referring to the committees of the Tribunal.

Ms Njobe was of the opinion that the word “sitting” was better.

The Chairperson stated that “committees” was also acceptable.

Ms Lufundo added that there was another issue with paragraph (1C). There could not be a proviso here, and it should be deleted.

The Chairperson agreed with Ms Lufundo.

Clause 12: Amendments to section  13 of the Act
Ms van der Merwe stated that the next issue was on the review aspect of the Tribunal. The new sections 13(12A) and 13(12B) were inserted in response to the public submissions. The original wording provided that “The Tribunal may, on its own accord….” However, the comment was made that there was no clarity on how this should be done. It was proposed that the clause should be amended to read: “The Tribunal may, acting on request of one of its members….” Adv van der Merwe sought the guidance of the Committee on the preferred wording.

The Chairperson could recall that the Committee decided to put a time frame for such an act, as it was decided not to leave the issue open-ended.

Ms Lufundo stated that she could not remember the time frame. Initially, it was proposed that the Tribunal be empowered to rescind its rulings, and the clause set out the circumstances in which it may do so. These new subsections must be read together. The new section 13(12B) meant that the Tribunal may act on its own accord, under certain circumstances. section 13(12A) empowered it to rescind its rulings while section  12(B) was a limitation of that power, and limited it to rescinding only in the circumstances stated. Ms Lufundo did not see any ambiguity in the wording and did not agree with Adv van der Merwe’s proposal for amendment.

The Chairperson stated that a member could raise an issue but that issue would be first deliberated on by the Committee before a decision was made.

Ms Borman stated that the wording “…by an affected person….” was almost the same as “on request by one of its members….” Ms Borman believed that the original text should be adopted and not amended, as limitations to the Tribunal’s powers were provided in section 13(12B).

M Mokgalapa felt that “…on its own accord….” and “on request of one of its members….”amounted to much the same. It would always be something decided by the Committee.

Ms Lufundo stated that the proposed amendment to subsection 13(12B) did not sit well with subsection 13(12A).

Adv van der Merwe agreed that both wordings were saying the same thing. She sought the Members” guidance as to which wording they preferred.

Ms Njobe asked whether the list of consequential matters in subsection (12B) should not be deleted, as it seemed to trivialise the section.

Ms P Duncan (DA) suggested the terminology “on its own accord….” as this placed emphasis on the Tribunal as a collective. The wording “…on request of one of its members….” seemed to emphasise the individual.

The Chairperson stated that there was a tendency for the wording “on its own accord” to be abused. The Chairperson agreed that it was a Tribunal issue, but pointed out that there could be instances in which only some members may observe an issue, so there was a need for clarity.

Ms Dlakude asked if limiting the request to “one member” would not create loopholes.

The Chairperson replied that what was being proposed was that any member, not only one member, could make the request.

Ms J Sosibo (ANC) agreed with the wording “one of its members.” She did not agree with deleting the list of consequential matters.

Ms Lufundo stated that there was a distinction between subsections (12A) and (12B), as the latter referred to the situation where the Tribunal was supplementing or amending consequential matters.

A Member thought it was necessary to be cautious about allowing individual members to raise issues.

The Chairperson pointed out that the word was “may”, and this meant that it was not mandatory. The Committee would always deliberate on issues raised by a member before making a decision.

Ms Lufundo stated that section 13(12B) should read that the Tribunal may act on request of one of its members, only when it was supplementing or amending consequential matters.

Ms van der Merwe stated that the wording suggested by Ms Lufundo excluded the circumstances of subsection 13(12A).

Ms Dlakude was worried that an influential member could influence the deliberations of the Tribunal.

The Chairperson stated that the issue of influence should not arise. She reiterated that every issue raised by a member would be deliberated by the Tribunal and the Tribunal would be guided by the legislation, policy and the Constitution. The clause should, however, read more clearly, and so she asked Ms van der Merwe and Ms Lufundo to try to find better and clearer wording.

Clause 14: Amendment of Section 15 of the Act
Ms van der Merwe stated that the next issue was on page 18 of the Bill, and related to the amendment of section 15(1)(f). Ms Lufundo had been concerned that the regulations by the Minister may affect the separation of powers, but she was not in agreement with her on that point. Ms Lufundo had also noted that in some cases, judicial decisions may raise urgent matters, and she agreed with her on that point.

The Committee agreed to delete the wording for the proposed section 15(1)(fA).

The Committee also agreed that in the new section 15(1)(fA)(iii), the words “living condition” should be used.

Clause 16: Insertion of section 17A
Ms van der Merwe stated that a new section 17A was to be inserted, in relation to appeals. She proposed that there should be a requirement for legal qualification of the adjudicators in the appeal body. If there was an appeal, there was usually a suspension of the order of a Tribunal, but at the moment there was no wording to this effect. She sought guidance from the Committee on this point.

Ms Lufundo stated that the new section 17A(3) did provide for “suitable qualifications and expertise in rental housing matters”.

Ms Duncan stated that the new section 17A(3) referred to more than one adjudicator.

The Chairperson stated that the Committee needed to agree on the number of members of the appeals body who should hold a legal qualification. There was also a need to insert the period for rescission in the Bill.

Ms van der Merwe pointed out that, in respect of the new sections 13(12A) and 13(12B), a period of fourteen days was proposed, and it would be consistent to put that here.

The Committee accepted the proposal.

Mangaung Metropolitan Municipality Built Environment Performance Plan (BEPP) briefing
The Chairperson welcomed the Mangaung delegation, which was led by Mr Xolo Pongolo, MEC for Human Settlements.

Ms Sibongile Mazibuko, City Manager, Mangaung Metropolitan Municipality, stated that the parties had a firm commitment to improving the situation in the Municipality (MMM). She noted that in the last six months senior management team had been appointed, and the situation in which MMM found itself in this financial year would not again be repeated. The technical team had all given input into the presentation she would given, and some comments needed to be incorporated into the MMM’s Geographic Information System (GIS). Once the Municipality’s Council had approved the Built Environment Performance Plan (BEPP), MMM would then update the presentation and submit it in the required time frame.

Mr George Mohlakoana, Head of Strategic Projects, Mangaung Metropolitan Municipality, noted that he would, as requested by the Committee, give an overview of the MMM’s BEPP, as submitted to the National Department of Human Settlements, and noted that the final draft would be submitted by 1 June 2012.

He briefly outlined that Mangaung Metropolitan Municipality comprised of three nodal points, at Bloemfontein, Botshabelo and Thaba Nchu. The population of the area, based on the 2007 statistics, was shown. In the MMM, there was an employment level of 30%, with Bloemfontein having the lowest percentage of unemployment. The economy of MMM relied heavily on community services, with manufacturing contributing less than 4% to the economy. The Executive Mayor of Mangaung had announced that the Municipality had to be repositioned and redeveloped as a compact city, with improved integration between the east and west, thereby bringing the three nodal points closer. In order to do this, MMM must ensure that the numerous initiatives rolled out along the N8 Corridor (from Kimberley to Lesotho, with a portion running through Mangaung) became the focal point for development.

He noted that the priorities of MMM were job creation, bulk infrastructure and the quality of service delivery. There would be development of neglected areas in the built environment. The Municipality took cognisance of recent addresses by both the State President and Premier of the Free State, relating to priority areas. He tabled the Strategic Development Framework (SDF) of the Municipality, showing seven parcels of land earmarked for development, with the various levels of access to services, such as electricity, water and sanitation in the three nodal points. He also outlined the challenges faced by MMM. In respect of bulk services, an analysis was done on the capacity of the waste water treatment works, which showed that three were operating beyond their capacities. As MMM continued the conversion of the VIP toilets and bucket toilets to a water system,  there would be increased pressure on the treatment plants. This meant that investment was needed, although it could not be fully achieved in the current financial year.

Mr Mohlakoana noted that major road works were needed on the area around the N8 Corridor, with the area around the airport identified as particularly important for development. There had already been significant investment in inter-modal transport in Bloemfontein, and the next phase would concern the other nodal points, to make regional integration more effective and efficient. The Bus Rapid Transport (BRT) system project had been delayed, due to financial constraints.

Mr Mohlakoana started to speak on the allocation for the next financial year, but the Chairperson asked him not to continue.

The Chairperson pointed out that the Committee was interested in what had been done in terms of the allocation for 2011/2012, including what had been spent, projects that were in existence already, and possible completion dates.

Ms Dlakude asked Mr Mohkloana to go back and detail the slides on the seven land parcels, the Breaking New Ground (BNG) projects and the Gap Market.

Mr Mohkloana stated that these slides showed the seven land parcels and their locations, and noted that all were in Bloemfontein. He tabled the names of the areas and the development status of the land, in terms of planning and services. There was also an indication of the number of units per area, and the costs of planning, as well as the allocations from the Urban Settlements Development Grant (USDG). MMM had started identifying the areas to be developed, as there was a Council resolution.

Ms Mazibuko stated that the seven land parcels were priority land parcels. Most of the informal settlements were situated far from the economic centre of MMM, and so MMM had identified these parcels that created a buffer between the townships and the previously disadvantaged areas. Some of the land parcels were owned by MMM, and with these it had started the planning processes. Some were privately owned and with these, MMM had started the process of negotiating a price and acquiring the land. Much of the USDG grant was also used for bulk infrastructure, because if parcels of land were to be developed, there was a need to invest in bulk infrastructure for these parcels, and the N8 corridor. It was intended that communities in some of the informal settlements would be relocated to the seven parcels of land, which formed an integrated development.

The Chairperson noted that land had already been bought from the Municipal budget, but despite the USDG allocation, there appeared to be no services and planning done yet.

Ms Mazibuko said that the stage of planning was indicated in the presentation, particularly whether the township had been proclaimed or not. MMM was engaging in this process, and had made applications to the planning section of the provincial government. The process would be completed when the township register was opened. Three of the seven parcels of land had a township register, while four did not, and MMM was looking at the level of infrastructure in those three parcels. Another issue was how many single units and high density dwellings could be put up. Those proclaimed as townships had been delineated for development.

The Chairperson berated the delegation for what she said was a misleading report. They had now given additional information that was not contained in the presentation.

Ms Mazibuko stated that MMM had compiled a list of the Gap Market, stating the names and sizes, to ensure that MMM did not target gap markets where there were already informal settlements. Most of the identified Gap Markets were vacant structures. The next phase would comprise putting in services. She noted that the number of units anticipated from the sites, and the level of density, were indicated.

Discussion
Ms Dlakude asked when MMM was planning to eradicate the bucket system. She also asked if MMM was aware of the S’hamba Sonke programme, in relation to roads, and whether it was tapping into it. She wanted to know how many informal settlements have been upgraded.

Ms N Mnisi (ANC) was also concerned about the continued use of the bucket system and wanted to know the particular difficulties in eradicating it in the MMM. She asked what informed the decision to have an allocation for sports in the USDG grant, for the 2012/2013 financial year. To date, the USDG grant had been poorly spent and the level of spending, at 40%, instead of the planned 75%, was unacceptable. It was clear that no progress was being made in relation to finding land for the Gap Market, and she demanded to know the reasons.

Mr K Sithole (IFP) referred to the statement that settlements were “mushrooming” in the Free state, and asked whether this referred to mushrooming of structures in the already identified 28 informal settlements, or whether more information settlements were being created, and asked how many informal settlements there were at present. In respect of the White City project, there was reference to having 200 rental units by 2014/2015, yet no budget was allocated for this in 2012/2013. Mr Sithole also asked what was happening with that development, noting that MMM had failed to point it out during the Committee’s last oversight visit to the area.

Ms Njobe asked what the real reason was for the underspending, and whether it was as a result of too little capacity. She pointed out that whilst this presentation gave information on the future plans of the MMM, the Committee had expected to see a general budget on the USDG grant, showing what was to be spent, and where, as well as a budget for land acquisition, showing how much was to be acquired in this financial year, and how much in future.

Mr Mokgalapa pointed out that the presentation showed what MMM intended to do in the future, yet it had not finished the projects for this financial year. Mr Mokgalapa too was interested in hearing the real reasons for underspending, which was unacceptable because two grants were given. He also questioned why MMM planned an allocation for sports and other social services. when it did not even have bulk infrastructure.

Ms Duncan stated that the slides contained scanty information, and merely listed headings, without information to support them. She stressed that more information on the sectors contributing to the economy of the city was needed, especially community services. She asked whether the SDF was in place. In addition to the USDG, MMM had obtained funds from the Development Bank of South Africa (DSBA), and she asked how these were to be used, and if terms were specified. She asked what the Department of Human Settlements was doing to ease processes for metropolitan municipalities, and also about relationships with Departments of Public Works, Water and Environmental Affairs on the Environmental Impact Assessments (EIAs) of the projects.

Ms Sosibo asked how far MMM was in developing the N8 corridor.

Ms Borman stated that the Minister for Human Settlements was on record as stating that without infrastructure, houses could not be built. She pointed out that the USDG grant was intended for infrastructure and upgrading of informal settlements. There were huge backlogs, and she did not believe that MMM would achieve the estimated 88% spending of the USDG grant in the coming months, as it lacked capacity to do so.  

Ms Duncan asked if there was collaboration between MMM and the Departments of Water, Transport and Public Works. If MMM failed to provide the Committee with quantifiable information, the Committee could not exercise proper oversight on how the grant was being spent.

The Chairperson asked the National Department of Human Settlements (DHS) to comment on the issues raised by the Committee. She asked MMM to prepare another, proper report, as this presentation did not speak to the purpose of the USDG grant, and because issues were raised last year by the Committee that had not been corrected.

Mr Neville Chainee, Chief Operations Officer, DHS, stated that last year was the first year of the USDG grant, and, after a transition phase, the framework of the USDG had now been changed, specifically to focus on bulk infrastructure, especially housing bulk infrastructure, for informal settlements. He suggested that the MMM must look at the benchmarks set out in the Department’s SDBIP Report.

The Chairperson asked why there was an allocation in the MMM’s USDG grant for the N8 Corridor, pointing out the DHS had a similar allocation.

Mr Chainee replied that he would revert to the Committee with the relative percentages of funding for that project.

Ms Mazibuko responded that, like the Committee, the MMM had been concerned with the underspending on the USDG, and that was why a management team was established, and was trying to address the issue. MMM was in collaboration with the relevant departments of water, but it must be noted that water sources were being depleted. The bucket system could not be eradicated if the issue of bulk infrastructure was not addressed. She noted, in respect of questions on sports allocations, that some projects continued from the previous years. She clarified that MMM currently had 28 informal settlements. It did interact with the DHS and the Department of Public Works, and now there had been approval of some outstanding environmental assessments, whilst most of the bulk infrastructure projects had EIA approval.

The Chairperson noted that MMM was an accredited municipality, received a provincial Human Settlements Development Grant and would not be permitted to use the USDG grant for non bulk projects.

Mr Mokgalapa again asked why there was an allocation for sports, notably the building of a stadium, in the USDG grant, when there was still a bucket system being used in the area.

The Chairperson again directed the delegation to go back and prepare a better report.

Mr Pongolo thanked the Committee for its comments and suggestions. He noted that the management team was only newly established, but it would go back and address the issues raised by the Committee in its next report. MMM needed support from the Committee. He explained that one of the reasons for the under spending was that MMM was spending cautiously on projects, to avoid wasting taxpayers’ money.

Other Committee business: progress report following Oversight Visit to Mpumalanga
The Chairperson noted that the Committee was expecting to receive a progress report following the Committee’s Oversight Visit to Mpumalanga in 2011. Although a report had been received, the DHS had informed the Committee that it had received an e-mail that morning from Mpumalanga, noting that officials were unable to attend the meeting as they were preparing for the provincial budget vote.

Ms Dlakude stated that the Committee could not deal with the report in the absence of the delegation from Mpumalanga, as questions were more likely to be directed to them than to the DHS. She suggested that this be held over to another meeting.

Ms Borman said that the Committee’s oversight visits had to be taken seriously, as they highlighted problems on the ground, and it was incorrect for the delegation not to be present.

Mr Mokgalapa asked why exactly the delegation had failed to attend.

The Chairperson stated that the reason given was that the delegation had been busy until late the previous evening in finalising the budget documents and had missed their flight.

Mr Chainee pointed out that when the DHS received any notification from the Committee, it would pass it on, and confirmed that this item had been on the agenda since January, and had been notified to Mpumalanga provincial office. On that morning he had received an unsigned letter from the Head of the Mpumalanga Provincial Department, which he read out.

It was decided that this discussion must stand over.

The meeting was adjourned.