Rental Housing Amendment Bill (B21B-2011): finalisation and adoption; Frances Baard Municipality accreditation status: briefing
Meeting Summary
The Committee declined to receive the presentation from eThekwini Municipality because it sent only its presentation but did attend the meeting. It declined to receive
The Committee heard only Frances Baard District Municipality (FBDM), whose presentation reflected on its accreditation status, funding, and project support to local municipalities, including subsidy administration, project management, capacity development, quality assurance, project identification and planning, among others. The
Members welcomed the presentation but bemoaned grey areas. The presentation lacked detain in terms of time frames for completion of outstanding sites and analysis of housing backlog per municipality. The statistics on sanitation (92%) and water (96%) were questionable because the
The State Law Adviser read through the revised Rental Housing Amendment Bill clause by clause.
Members asked questions, in particular on provisions concerning the banking of tenants' deposits, and made technical and substantive amendments. The Bill was adopted with amendments but the Democratic Alliance (DA) Members reserved their right arguing they wanted to consult with their caucus first, and would canvass the Bill in the National Assembly.
Meeting report
The Committee declined to receive the presentation from
Mr Peet van der Walt, Director: Infrastructure Services,
The Housing Unit provided the three Municipalities with projects initiation, project management housing backlog identification and qualification, capacity development, contract administration and subsidy administration. Building inspectors were employed to ensure the delivery of quality projects and alignment with requirements of set national norms and standards.
The Frances Baard District Municipality (FBDM) developed different policies for the three municipalities including, housing sector plans, housing allocation policy, contract management policy, research on shack dwellers, and was currently doing a feasibility study for four ecologically designed housing sector (HS) projects. In the turn around strategy, support was provide in getting water and waste water treatment, capacitating the plants and the operation and maintenance of infrastructure. Some of the shared support services were in internal audit, Information technology, environmental health, human resources and Infrastructure Development Plan formulation and review.
With regard to funding, FBDM received capacity enhancement from the Department of R1.8 million in 2009/10, R2.7 million in 2010/11, R3 million in 2011/12 of which R1.7 million was transferred and the balance of R 1.2 million would be received in the current year. The total funding for capital projects (water and sanitation) in all four Municipalities under the current financial year was R6.4 million which would increase to R20 million in the 2012/13 financial year.
A study of water and water waste treatment plants had been done and operation and maintenance funds would be used to register the plants, train operators and improve the blue and green drop of the Municipalities. Operation and Maintenance projects in the local Municipalities would be funded at a cost of R8 million under the current financial year.
According to the housing consumer survey FBDM had a housing backlog of 7 671. 813 houses had been built out of the 1 116 targeted by end of the financial year. In the next financial year 304 sites would be serviced and 305 houses would be built. Funding for housing was being held by the provinces and the DM had not yet received it. Sol Plaatje and FBDM had been accredited to level 2, and in the next financial year the organogram would be expanded. While Sol Plaatje had a rental housing project, a study would be undertaken to ascertain the exact figure of rental housing in the other smaller municipalities. In this financial year the DM would build 4 365 units. 1 363 had been completed, 3 002 were outstanding, and 305 would be allocated in the next financial year.
An emergency housing project consisting of 23 houses was completed in
Among some of the challenges, the DM functioned without a manager. An operational budget of R7.70 million was required in the next financial year. R4.8 million had been secured from the district but there was a shortfall of R2.9 million. The money would allow the DM to execute its duties but would not be enough to populate the organogram fully. The implementation Protocol was not in place, the HSS connection was not stable and problems existed in NHNR as information was difficult to retrieve from the costly system. There was a shortage of suitable land. Emerging contractors did not perform well. There were bulk infrastructure constraints, and the Municipal Infrastructure Grant was not reaching district municipalities.
Discussion
Ms D Dlakude (ANC) wanted to know when the outstanding sites would be completed, what was the extent of the housing backlog per Municipalities, and, if the DM had 25 000 homeless households, how would that compare to the figures on sanitation and water. What were the reasons for the qualified audit received in the 2010/11 financial year?
Mr M Juliman, Housing Manager, FBDM, replied that the 25 000 homeless households represented the whole district and 9 000 were in the three districts, with Sol Plaatje taking the remaining. There was doubt that the DM would be able to meet the target with the current meagre funding.
The Chairperson said that the DM should give a breakdown of the backlog in terms of GAP housing market, subsidy housing and rental housing in the report it would submit next week.
Mr Juliman said that, for the three Municipalities, the backlogs were: 3 200 for informal, 790 for projects, about 3 000 for the Rural Infrastructure Development Plan (RIDP) Upgrading of Informal Settlements Programme (UISP), and about about 1 300 for social and rental: a report would be submitted to the Committee on the status.
Ms Dlakude wanted to know whether the 25 000 was in informal settlements alone or not?
Mr Juliman replied that the statistics referred to all the sectors.
The Chairperson advised the DM to go and compile a comprehensive report on the matter.
Mr Z Bogatsu, FBDM Acting Municipal Manager, replied that the qualification had more to do with interpretation disagreements with the Auditor-General. It had since adopted the action plan on cash flow and supply chain which emphasised declaration of matters below R30 000 and the Council was addressing the issues with the help of the Mayor. Consistent engagements were being held with the Auditor-General on the matter.
Mr Hannes van Bicsor, FBDM Director: Finance, said that the District had received a number of unqualified audits over the years but the latest qualification was in line with supply chain regulations. The Auditor-General (AG) had ordered that a report be submitted on irregular expenditure since 2005 with the exception of supply chain, but the DM failed to access files in the old system. However the matter would be submitted to Council in June with all the irregular expenditure and financial statements since 2005. The other matter on one cash flow item had been indicated as a false balance by the AG, but the matter was being resolved.
Mr S Mokgalapa (DA) commended the Municipality for getting the level 2 accreditation despite its inadequate resources. What was the reason for the DM not to obtain its Municipal Infrastructure Grant (MIG) finding? Did it receive the Rural Household infrastructure Grant (RHIG) because it had a large number of infrastructure backlog. He was concerned that the DM would not be able to address challenges with the limited budget it had. Why had it not prioritised housing challenge in the presentation, if it had 25 000 homeless households. The presentation lacked detail on infrastructure backlog and the sanitation percentage (92%) was questionable. Why was the province not allocating funds if the IGR was working well and why did the Municipality believe that it would obtain an unqualified audit in this financial year.
Mr Van Bicsor replied that there would be no funds for the housing function in the next financial year; the Municipality had taken up the matter with the Department but was promised R1.5 million in instalments in the next financial year which was supposed to have been allocated this year. The matter would put pressure on the Municipality’s core mandates but the matter would be pursued further.
Mr Juliman said the 92% water provision statistics were supplied by the Department of Water Affairs.
Mr K Sithole (IFP) wanted to know why there were many sites outstanding in Phokwane and why informal settlements and rental housing were not prioritised.
Ms Bogatsu said that Phokwane was a big problem and the issue of signing service level agreements had since been elevated to a political level. The matter would be taken up by the Executive Mayor with the Mayor of the Municipality and the matter would be further discussed at the next technical IGR in June.
Ms P Duncan (DA) was concerned about the high number of unemployment (27.7%). Dikgatlong had 40% unemployment rate. What was the breakdown of sanitation and electricity figures per Municipality and what caused the delay in completing projects? Which company had been awarded the Emergency Housing Project Contract?
Ms N Mnisi (ANC) asked if the DM had capacity problems because the number of completed units was far much lower than unfinished. Nothing was mentioned about affordable rental accommodation and it was not clear how many informal settlements were there, and how many had been upgraded. Were there any houses that needed rectification and were the Municipalities working together with National Home Builders Registration Council (NHBRC) and The Housing Development Agency (HAD) in solving the challenge of shortage of land?
Ms J Sosibo (ANC) was concerned about the high number of homeless households. Was the DM building sanitation where there were no houses? She sought explanation on why Sol Plaatje had not been allocated money for capital projects and why the DM had received a qualified audit?
Ms M Borman (ANC) wanted to know if the DM had capacity to deliver programmes. The capital expenditure was growing yet it was not counter relating to delivery. Did the Municipality experience incidences of corruption in housing and how was it dealing with such practices? How was the DM and the Province solving the issue of MIG funding.
Mr Van Bicsor replied that the DM had received decreasing amounts of the grant for the past two years and the withholding of the MIG fund had put more challenges on its ability to provide services and support to local Municipalities. It relied mainly on reserves and the meagre allocation it had received and had set aside R25-million for funding projects.
Ms M Njobe (COPE) wanted to know at what point the DM expected its final allocation every year. What action had been taken to address matters raised in the qualified audit? There was need to capacitate Municipalities and the presentation was too general and lacked time frames on projects.
Mr R Bhoola (MF) was concerned about areas of distortion in the presentation and why was it that the DM was not delivering when it had designed projects. The capacity of a Municipality could only be assessed by the number of informal settlement upgrading. Was there monitoring by the Province over the DM in quality assurance?
Mr K Sithole asked why the Department was issuing funding late (February).
The Chairperson wanted to know what plans were being taken to solve the issue of land shortage. The presentation did not reflect the expenditure of the grant and how much had been spent; the informal upgrading program did not show how many were in place, how many had been identified and if there were any plans for relocation and when would that be. What plans were being undertaken to solve the problem of lack of a water treatment pant in Sol Plaatje, how did the DM address the issue of late payment of service providers and why was it not prioritising rental housing which was a priority in outcome 8? Why was there no programme for farm dwellers when numerous human right watch dogs had compiled a lot of report about the challenges they faced? What kind of support was it offering to Municipalities and did local Municipalities receive MIG funding and was the planning of the Municipality aligned with that of the local Municipalities?
Mr Juliman replied that the statistics reflected in the presentation referred to current projects and funding was received for only hundred units a year. As such as the money become available projects were completed. The DM prioritised informal settlement upgrading and all the current programmes addressed the issue.
Ms Dlakude was not satisfied with the statistics on water and asked the DM to give a breakdown per household.
Ms Duncan wanted the DM to give a breakdown of projects in slide 15 per Municipality.
The Chairperson said the Committee was not going to accept statistics from another Department. It needed an informed report from the Human Settlements point of view. The Committee would only accept a consolidated report from all Government spheres going forward.
Ms Shuan Solomon, Deputy Director: Office of the Director-General, Department of Human Settlements, said that the
The Chairperson wanted to know how the National Department was intervening in solving challenges that had been raised and why the
Mr Neville Chainee, Chief Operations Officer, Department of Human Settlements, explained that the intention of the accreditation process was to capacitate municipalities and the Department was committed in making the interventions to solve challenges. In conjunction with the Departments of Rural Development and Land Reform and Cooperative Governance and Traditional Affairs (COGTA) a Cabinet decision had been taken that 23 districts, including those in the
Ms Khadi Moloi, Executive Mayor, FBDM, explained that a new appointment of Municipal Manager would be made shortly. She was going to meet the Mayor of Phokwane to address the service agreement issue and a report would be handed to the Committee.
The Chairperson said the Committee and municipalities were supposed to work together to solve challenges facing Human Settlements.
Ms Bogatsu said there was minimal support for Sol Plaatje because it had been decided by the IGR. The Municipality had a budget far higher than the DM and both had the same accreditation status (level2) but it was not being excluded from support. In the latest budget approval the Municipality had been allocated R4. 3 million to provide water to 150 households and sanitation to 650 households in one of the informal settlements. There was an ongoing debate on whether it was possible to incorporate Magareng in Sol Plaatje because it was practically struggling. All the money that had been allocated to the DM had been spent and reports to that effect were available.
Mr Van der Walt said that the Local Municipalities received MIG funding and met with them on quarterly Project Management Unit (PMU) to map up planning. The presentation had not reflected on the farm dwellers sanitation programme but this programme was in place and had been allocated R1 million to be spent by the end of June. The DM provided the sanitation and the farmers were responsible for maintaining the infrastructure.
Ms Dlakude wanted to know if the Municipality was still using the bucket system.
Rental Housing Amendment Bill [B21B-2011 finalisation and adoption
The Chairperson said that the Committee had requested for an extension from Parliament to finish deliberations on the Bill.
Ms Bongiwe Lufundo, Principal State Law Adviser, read through the revised Rental Housing Amendment Bill clause by clause.
Members asked questions and made technical and substantive amendments before the Bill was finally adopted. The Democratic Alliance members agreed that the Bill be adopted but indicated that they would canvass it in the National Assembly.
The following clauses were discussed and or amended:
Clause 1: Amendment of Section 1 of Act 50 of 1999.
Mr Sithole wanted to know who prescribed regulations in sub paragraph (e).
The Chairperson answered that regulations were prescribed by the Minister.
Ms Borman wanted to know whether the Committee had allowed that the word “local authority” in sub paragraph (c) be replaced by “
The Chairperson replied that it had been changed to “local Municipality”.
Ms Bongiwe said the definition “local authority” had been replaced by “local Municipality” through out the Bill.
Mr Sithole asked whether the regulations would be prescribed by the Member of the Executive Council (MEC) or Minister.
Ms Bongiwe answered that sub-paragraph (e) was supposed to read as “prescribed by regulations” because only the Minister could make regulations.
Mr Mokgalapa suggested that it should read “prescribed by the Act”.
Ms Bongiwe proposed that the sub-paragraph should read “prescribed by the Minister in terms of Section 15”.
Members accepted the amendment.
Clause 2: Amendment of Section 2 of Act 50 of 1999
Mr Mokgalapa wanted to know whether sub-paragraph (d) which empowered the Minister to submit an annual report to the National Assembly on the promotion of Rental Housing covered the popularisation of the Bill.
Adv Charmaine van der Merwe, Parliamentary Legal Unit. said that the reporting referred to duties that were being placed on national Government in Sections 2 and 3 of the Principal Act. Section 2 referred to the Government’s responsibility in promoting Rental Housing (RH) and Section 3 dealt with provision of RH property and measures that the Government was supposed to take to promote it. Popularising the Act would be part of the process as that would be done through Rental Housing Information Officers (RHIO). The impact of the Act and Tribunals was supposed to be monitored and a report be provided to the Committee.
Mr Mokgalapa wanted to know what would happen to existing verbal lease agreements after the Act was implemented.
The Chairperson answered that the legal team had indicated that the Bill would address new leases and Members had requested a window period before the Bill would be implemented to allow review of the lease.
Adv Van der Merwe said that the Bill provided that if there were any amended obligations between the tenant and the landlord these would become effective six months after the date of commencement of the Act because the period sought to make people aware of the requirement. She suggested that Sub-Section 5 paragraph (d) be amended to read as submit “an annual report on the implementation of Rental Housing Property as envisaged in Sections 2 and 3, as well as on the implementation of the Act”.
Members agreed.
Mr Mokgalapa asked if the six months transitional clause was satisfactory.
The Chairperson said the minimum must be six months and the maximum should be 12 months.
Clause 3: Amendment of Section 3 of Act 50 of 1999
The Chairperson suggested that Sub-Section 5 read as “National Government must develop and ‘set aside’ funds to train members of the Tribunal…..”
Ms Bongiwe proposed that the section would read as “National Government would develop and ‘set aside a budget’ to fund programmes…”
Members agreed.
Clause 6: Insertion of Sections 4A and 4B in Act 50 of 1999
Ms Borman wanted to know the rationale for including 21 days in Sub-Section 3, sub-paragraph (b).
Ms Bongiwe said the seven days period was for receiving the deposit and in the condition that the tenant was liable for any damages such an action was supposed to happen within 14 and if the tenant did not avail himself or herself for an inspection of the property the landlord could deduct money equivalent to the damages from the tenant’s deposit.
The Chairperson said that inspection was supposed to be carried out three days prior to vacating a dwelling.
Mr Mokgalapa supported the point, adding that it covered all possible scenarios.
Ms Borman explained that she queried the rationale for including 21 days in the sub-paragraph.
The Chairperson replied that it was meant to ensure fairness to both the tenant and the landlord.
Ms Mjobe said the 21 days period was necessary because it allowed for unforeseen circumstances as when the tenant might be sick or having a problem.
Mr Mokgalapa suggested that in Sub-Section 10 the expression “but for cost……”was supposed to be deleted because no other costs would exist other than would have been agreed on the lease. The sentence was deleted.
The Chairperson wanted to know whether it was reasonable and right to say, as prescribed by Section 4B paragraph (b), that even the landlords who rented one room were supposed to open an interest-bearing account to bank the tenant’ deposit, as it would be for the well-established rental market.
Adv Van der Merwe said that, according to the paragraph, the money could be invested in any banking institution and it was not mandatory that a separate account be opened because it could be housed in the landlord’s account as long as it earned interest.
The Chairperson asked if the explanation provided by Adv Van der Merwe was explicitly stated in the clause or if something had to be inserted into the paragraph to cater for all the people.
Mr Kwezi Ngwenya, Legal Adviser, Department of Human Settlements, replied that the legislation was meant to be applicable to all the people, even the backyard dwellers, but something needed to be done because shack owners could not be expected to open interest-bearing accounts.
The Chairperson suggested that it was necessary that the issue be clarified for easier implementation of the Act.
Adv Van der Merwe suggested that paragraph must read “must be invested by the landlord in an interest-bearing account with a financial institution or as prescribed by the regulations”. The regulation was giving the Minister the authority, in some circumstances, to amend the Act.
Ms Bongiwe explained that the proposal sought to accommodate illiterate people and those who could not open accounts by empowering the Minister to prescribe regulations.
The Chairperson said that paragraph (b) was satisfactory but another sentence had to be added to accommodate backyard dwellers landlords.
Did the law specify the deposit that was supposed to be paid?
Adv Van der Merwe said that, if it was social housing, the Minister could determine the deposit, but with regards to private property the Committee had agreed previously not to interfere and provisions for norms and standards could be made or consumer regulation would control it.
The Chairperson said that it would not be possible for Parliament not to interfere because the sector was part of the industry which the Bill sought to regulate.
Adv Van der Merwe said in terms of social housing the deposit would be restricted but the private sector would be regulated. Provisions had been made also for the course of action to be taken in terms of certain areas such as accommodation for students where the Minister could prescribe regulations.
The Chairperson said the deposit matter was not clearly stated.
Ms Bongiwe explained that it was specified in Section 4B, Sub-Section (¡) which stipulated that the deposit might not exceed the rental amount.
Clause 12: Amendment of Section 13 of Act 50 of 1999
Mr Mokgalapa wanted the insertion in Sub-Section (c) to be amended to say, that in cases where there would be an eviction, that the tribunal should refer parties to the court, or the parties should refer the matter to the court instead of the tribunal
Adv Van der Merwe replied that the application would be sent by the Secretariat of the Tribunal and after it would have been registered with the High Court the parties could approach it. It was being done to prevent parties from initiating a new application.
Mr Mokgalapa wanted the inclusion of the word “circumstances” in (c).
Members agreed that the word “circumstances” be replaced by “as prescribed by the regulations”.
Mr Mokgalapa wanted to know whether the Secretariat would appoint adjudicators alone or in consultation with the accounting officer or the MEC.
Members agreed that the adjudicators would be appointed in consultation with the accounting officer.
The Bill was adopted with amendments but the Democratic Alliance (DA) Members reserved their right arguing they wanted to consult with their caucus first, and would canvass the Bill in the National Assembly.
The meeting was adjourned.
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