Rental Housing Amendment Bill [B56B-2013]; briefing by Minister and Department of Human Settlements

NCOP Public Services

03 March 2014
Chairperson: Mr M Sibande (Mpumalanga, ANC)
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Meeting Summary

The Minister said that the Rental Housing Amendment Bill [B56B-2013] said the main thrust of the Bill was to ensure that irregularities in the area of rental housing were eradicated, and a proper relationship was established between the lessee and the lessor. The Bill attempted to make provision for the difficulties that arose between lessee and lessor and allowed for people to seek recourse plus appeal in instances where there were disagreements with the Tribunal.

The key amendments were:
-           Strengthening the Department’s policy framework so as to make provision for the needs of the vulnerable;
-           Clearly demarcating the rights and obligations of tenants and landlords ensuring that both parties understood their rights and obligations in terms of the Act;
-           Stipulating the duties of both national and provincial government with regards to rental housing; and
-           Amplifying the provisions on the establishment of the Rental Housing Tribunals and to render the establishment of a Rental Housing Tribunal in every province.

The Committee asked which provinces had not yet established Tribunals; how the law would assist people with understanding renting procedures and increases in rent; who would be responsible for repairs; about the Rental Housing Tribunal Offices and the proposed two committees; about regulations; non-compliance and tribal chiefs operating in line with the Bill. The Department said it would provide education on the responsibilities of landowners and tenants, so it would not be easy for landowners to take advantage of tenants.

When Members asked if lessees were protected from being taken advantage of by landowners, it was explained that the Rental Services Act made it clear that it would be an offence for landowners to exploit lessees. The Committee heard that legislation made it very clear that it would be an offence for the landlord to cut services and do lockouts. The landowner was responsible for rates and taxes and that rental calculations were done according to geographical areas. When the Committee expressed concern about people in rural areas, it was explained that the Bill had a proviso that ensured that people in rural areas were not exploited.

The tagging of the Bill as a Section 76 Bill was explained. The next phase of the process would be that the Bill had to be taken to the provinces for briefings and public hearings.

 

Meeting report

Opening remarks by Minister of Human Settlements
The Minister, Ms Connie September, said that the Bill had been tabled in the National Assembly and passed, and was now in the National Council of Provinces (NCOP). The Bill has had "some history" as it was in the National Assembly and then withdrawn when the Department raised concerns about implementing some of the provisions that the National Assembly had put forward as amendments. The Bill was brought back again, and tabled in the National Assembly. The Bill provided for quite a number of very technical amendments, the first one being that the Department’s name had changed to the Department of Human Settlements. The Bill really sought to ensure that in the area of rental housing in South Africa, the high level of irregularities were eradicated.

It aimed to establish a proper relationship between lessee and lessor, so that the one did not have more power over the other. It made sure that both parties understood their responsibilities when they entered into a rental arrangement. It was important to ensure that the relationship between the two parties was regulated in line with the Constitution and reflected a rights-based approach. Lease agreements could be bought at the CNA store, where the recipient did not have much of a say as all the clauses were there already. This was why the Department was taking this stance and showing that there needed to be a set lease agreement that took into consideration the rest of the legislation and of course the constitutional imperative of the country.

It was well known that difficulties arose in relationships, but the Bill attempted to make provision for this. It allowed for people to seek recourse and even appeal in instances where there were disagreements with decisions made by the tribunal.

In conclusion, Section 15 of the Bill did empower the Minister to make regulations after consultation with the relevant parliamentary committees and every MEC. It also empowered the Minister to provide training, education and assistance to the Rental Housing Information offices. The municipalities in the provinces had to ensure that sufficient information was given to everyone about the process of renting. What was missing was sufficient information about entering into contractual relationships, and knowing one’s rights and obligations. The Bill provided this information and also dealt with people living in what was called ‘the backyards’, as even that relationship had to be regulated.
 
Department of Human Settlements briefing on the Rental Housing Amendment Bill [B 56B-2013]
Mr Khwezi Ngwenyo, Legal Advisor: National Department of Human Settlement read the proposed amendments to the Rental Housing Amendment Bill [B 56B-2013]. The name change of the Department was read as Amendment of Section 1, and proposed to bring the Act in line with the name change of the Department from the Department of Housing to the Department of Human Settlements. The Principal Act was amended by an insertion of a new Section 1A to make provision for the Objectives of the Act.

Section 2 of the Act was amended to strengthen the Department’s policy framework to make provision for the needs of the vulnerable, whilst balancing the constitutional rights of both tenant and landlord. Section 4 was amended to clearly demarcate the rights and obligations of tenants and landlords ensuring that both parties understood their rights and obligations in terms of the Act. Amending Section 9 of the Act increased the membership of the Tribunal. This would ensure that Tribunal was able to function as two committees with three members in each committee. Section 15 empowered the Minister to make regulations after consultation with relevant parliamentary committees and every MEC. Section 16 of the Act amended the enhancement of the penalty and offences provision.

Mr Ngwenyo said that the Principal Act was amended by the substitution of the expression ‘local authority’ to ‘local municipality’, to align the Act with the Local Government: Municipal Systems Act, 2000. He said that one had to think beyond the definitions when using the words 'landlord' and 'tenant'. This would provide that historical imperative. Gender aspects were considered when dealing with this legislation to allow for transformation, and one could use landowner instead of landlord or landlady.

Minister response
The Minister said that some of the issues raised in the public hearings and the National Assembly would require further amendments to the Bill and others were present in the Bill already. However some of the issues raised were somewhat outside of the ambit of this Amendment Bill, but the Department would respond. This Bill was not in isolation of any other Act or any other law, for example there were many other pieces of legislation that dealt with RDP houses. With regard to RDP houses the law stated when and to whom they could be resold. It should be noted that RDP houses had to be sold back to the State.

There were quite a few questions about ensuring people conform and about how to ensure effective implementation of legislation that was already there. At her level they were part of Cooperative Governance and Traditional Affairs (COGTA) cluster and Ministers and MECs at MINMEC meetings and Departments were the implementation home. It was there where there was the opportunity to speak to everyone.

The Department was open to the idea of amending clauses that dealt with gender especially with regard to transformation around the ‘landlord’ ‘landlady’ debate.

The Portfolio Committee had expressed concern about people in rural areas. This area required collaboration and consumer protection. A lot of the Bill was about how one should educate consumers. The Department has had a conversation with the Department of Trade and Industry where it was decided to roll out the Bill with their legislation that protected consumers. This was important, as there were many unscrupulous types in the rental-housing arena.

With regard to municipalities and provinces, there was no capacity to have tribunals within municipalities, although there was the understanding that all rights should be protected. The Bill [B 56B-2013] dealt with landowners and relationships and what had to be done at the moment. If one made property available for rental, one had to conform to the Constitution. This Committee would in terms of provincial mandates and the strengthening of amendments, guide the Department.

Director-General response
The Director-General, Mr Thabani Zulu, responded to the issue of RDP housing and said that this was a slightly problematic environment. The challenge was the ill use or abuse of RDP housing arrangements. What added to the challenge was that one was dealing with a different segments of communities with different sources of income. The change in the Department of Human Settlement’s approach was to ensure that where there were RDP houses, an attempt was made to make a more economically conducive environment for beneficiaries to be able to sustain it. In fact one of the key projects in Kwazulu Natal was trying to create a mixed delivery of a RDP house and a rental house in the same space to cross subsidise RDP beneficiaries. This was sustainable industrial development within the same project so that people living there were able to exercise job opportunities and sustainability. All new human settlements projects were encouraged to have an RDP approach that created job opportunities to avoid the challenges raised by Members. There were economic benefits with the new approach and this was how the Department was dealing with it. The Bill was transformational in the context that it protected tenants and landlords and ensured that the rights of both were protected.

One should be aware that different provinces were governed by different market conditions. With rental space, the market played a very important role as the demands were not the same, and market conditions determined demand and supply.

Mr Ngwenyo said some of issues raised during the National Assembly process had been considered and were dealt with by the Bill. The Department would give assurances where possible.

Discussion
Ms M Themba (Mpumalanga, ANC) asked which provinces had not established Tribunals yet, and if there were time frames involved for this process.

Mr Ngwenyo replied that there was only one province, the Eastern Cape, without a fully functioning Rental Housing Tribunal. All the other provinces had fully functioning Rental Housing Tribunals. Provinces were now compelled in terms of legislation to establish Rental Housing Tribunals.

Ms Themba welcomed the idea of Rental Housing Information offices in municipalities. She asked how the Department was going to ensure that people in rural areas were empowered through these municipal offices.

Mr Ngwenyo said that previously it was a discretionary proviso. What the Department was trying to do was to extend the capacity of the Bill to ensure that this time around it dealt adequately with Rental Housing Information Offices because their significance at municipal level had been realised. This addressed the challenges of people coming to municipal offices seeking help and receiving proper information and having services closer to the people. There was now an established office of the Rental Housing Information Office with a properly trained official. Responsibility for this vested in the National Department. The Department had to train those designated officials to deal with rental housing issues at municipal level. The Department was now in a position to refer and receive the application, receive complaints and refer those complaints to a Rental Housing Tribunal depending on the geographical area. Tribunals would be visible at various municipalities to ensure Rental Housing tribunals became accessible at local level. Education was very important in terms of housing consumer protection. Every MEC had to have established a Housing Tribunal.

Ms Themba asked who was responsible if things in the house broke, the tenant or house owner.

Mr Ngwenyo replied that the responsibility of tenants and landlords were clearly stated in the Act.

Ms Themba asked for clarity on renting procedures and how the law would assist people with this. Sometimes the tenants would not allow people to view a house if the owner wanted to sell - so that they could continue renting.

Mr M Jacobs (Free State, ANC) asked for clarity about rental agreements in rural areas?

Mr Ngwenyo replied that rental determination depended on the geographical area. In the Bill there was a proviso to ensure that people in rural areas were not exploited In terms of rental calculations.

Mr Jacobs said that he was not happy with Tribunals being situated in the provinces, as he felt that problems between tenants and landlords/landladies should be located at local level.

Mr Jacobs said he was supportive of pro forma agreements as the standard. This would help with issues around the increase in rent.

Mr Ngwenyo agreed with him. He said that was why it was mandatory and not discretionary, with specific emphasis on the Minister of the National Office to provide training and education and assistance to those Rental Housing Information Offices as designated and appointed by municipalities. This would ensure accessibility of services at local level by to communities

Mr Jacobs asked who paid for maintenance, the landowner or tenant?

Mr Ngwenyo replied that the responsibility of tenants and landlords were clearly stated in the Act.

Mr Jacobs asked how rental increases were dealt with.

Mr Ngwenyo replied that this was spelled out in Clause 15(f)(b). It showed the calculation method and amount payable set out per geographical area. So the geographic area of a particular space determined this amount. Therefore rental determination depended on the geographical area. In the Bill there was a proviso to ensure that people in rural areas were not exploited in terms of rental calculations.

Mr Jacobs asked how the municipality could assist landowners when tenants were not paying rent.

Mr Ngwenyo replied that legislation made it very clear that it would be an offence for the landlord to cut services and do lockouts. Landlords were expected to pay rates and taxes.

Mr Groenewald asked for clarity about the Rental Housing Tribunal offices and the proposed two committees for each province. He asked how it would work with three members in each committee and also municipal involvement.

Mr Ngwenyo replied that the Bill clearly spelt out the responsibilities of Rental Housing Information Offices.

He said that in traditional areas there were many backlogs in terms of cases dealing with disputes. The Department was trying to increase the number of members to seven to ensure that they could host simultaneous meetings in those particular provinces.

Mr Z Mlenzana (Eastern Cape, COPE) asked for clarity about the regulations.

Mr Ngwenyo replied that the lack of a Housing Tribunal in the Eastern Cape would be dealt with as a matter of urgency. The Minister had to issue or develop the regulations within 12 months. The Bill compels this.

Ms L Mabija (Limpopo, ANC) asked how landlords taking advantage of tenants would be dealt with.

Mr Ngwenyo replied that the Department provided education in terms of the responsibilities of landowners and tenants. The amendments provided additional responsibilities. The Department would provide more information.

Ms Themba suggested that chiefs or traditional leaders should have representatives as part of the committees so that they could assist.

The Chairperson said that the Bill had been tagged correctly as a Section 76 Bill. This was a constitutional matter but the Committee did have the right to ask. He asked if it could be elaborated upon.

Mr Ngwenyo replied that this was a constitutional process informed by the Constitution. It was a concurrent function so it had to be tagged as a Section 76 Bill.

The State Law Advisor said that the Bill had been correctly classified as Section 76 legislation.

The Chairperson agreed with the Ms Themba that women were not as yet fully empowered with regard to this Rental Housing Amendment Bill. Also the issue terminology had to be sorted out in terms of the words ‘landlord’ and landlady’.

The Chairperson asked how provinces that did not comply would be dealt with in terms of the Bill.

Mr Ngwenyo replied that the legislation stated what would happen if there was non-compliance.

The Chairperson expressed concern about the contents of slide 15 that spoke of a uniform approach and compliance.

Mr Ngwenyo replied that this particular provision was mandatory.

The Chairperson said that the Bill should address spaza shops in RDP houses.

Questions asked that were not responded to directly
Ms Themba asked if, when the Department dealt with amendment legislation, they did research on RDP houses.

Ms M Themba bemoaned the situation in White City. She asked about the services in White City and if the Department could go there to see how people were living there.

Mr Mlenzana asked if there was a possibility of Tribunals delegating conflict management to local municipalities.

Mr H Groenewald (North West, DA) said that he was worried about the rural areas. In the rural areas chiefs had their own rules. He asked how this could be managed so that chiefs operated in line with the Bill.

Mr Groenewald said that with the public hearings due to take place in provinces, was it the provinces or the Department’s responsibility to see that these hearings took place.

Mr Jacobs asked how debt was going to be dealt with.

The Chairperson said the Bill should be taken to the provinces.

The Meeting was adjourned.
 

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