Housing Consumers Protection Measures Bill: Provincial Legislature Mandates

PUBLIC SERVICES SELECT COMMITTEE
05 September 2007
HOUSING CONSUMERS PROTECTION MEASURES BILL: PROVINCIAL LEGISLATURE MANDATES

Chairperson: Mr R J Tau (ANC, Northern Cape)

Documents Handed Out
Negotiating Mandates by the following provinces: Free State, Gauteng, Kwazulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West and the  Western Cape.

Audio recording of meeting

SUMMARY
The Department of Housing had briefed the Committee on the Housing Consumers Protection Measures Amendment Bill and now the permanent delegates reported back on their preliminary mandates. Three of the provinces were unable to submit mandates at this stage, but the remaining provinces confirmed general support for the Bill. However, concerns were raised, which included the final sign-off letters, often in circumstances where inspections by the new owners were not properly carried out, the stages of the inspection, what would happen in the case of contractors disappearing, and clarity was requested on the difference in the subsidy and non-subsidy applications. Some occupants remained dissatisfied with quality of the houses provided. Questions were raised on the role of provinces and municipalities in regard to the National Home Builders Registration Council. The National Home Builders Registration Council clarified the situation regarding inspections, materials use and testing. The respective roles played by the municipalities, provincial and national department and MECs were clarified. The entry level for builders into the NHBRC was also clarified, and it was noted that the Council had suspended 118 000 home builders to date, and that if a registered member disappeared,  legal action was taken. The Department of Housing gave some input into the phases involved in the subsidy sector. The Committee would meet on 12 September to finalise the mandates.

MINUTES
The Chairperson noted that the Eastern Cape delegate was ill, but requested all other permanent delegates to give feedback on the Housing Consumers Protection Measures Amendment Bill. He noted that the Free State had submitted the mandate but there would be no presentation due to the absence of the permanent delegate Mr L Van Rooyen (ANC, Free State) and his alternate.

Mr M Mzizi (IFP, Gauteng) stated that his province supported the Bill but the problem was that the Department of Housing was accused of providing houses that did not meet the required standards. Mr Mzizi pointed out that he had heard that the occupants signed “happy letters” confirming that they had taken over the houses and were satisfied with the work done. Prior to signing the occupants should be made aware that they should be inspecting the property provided.

Mr G Krumbock (DA, Kwazulu Natal) said that his province was happy with the concept of the Bill but had complained about entry levels and oncoming of contractors.

Miss H Matlanyane (ANC, Limpopo) said that the concerns that were raised by her province were around quality of the RDP houses, and the disappearance of the constructors before completing the work. The Department of Housing together with local government had assured her that they were investigating that issue and that legal action would be taken. The role of the National Home Builders Registration Council (NHBRC) was questioned and it was said that NHBRC and the department should do inspections irrespective of those done by the municipalities. Apart from expressing these concerns, Limpopo supported the Bill.

Mr A Watson (DA, Mpumalanga) did not submit a negotiating mandate. He noted that at a previous meeting it was decided that the department should give briefings. These were only held the previous week, giving the province insufficient time to make the submission.

The Committee then agreed that Mpumalanga province could make a submission by way of a final mandate on 12 September, the date set for finalisation of the Bill.

Mr R Tau (ANC, Northern Cape) pointed out that his province emphasised the role of the local and provincial government. Mr Tau said that housing was a concurrent responsibility and the province had its own contribution, which, according to legislation, needed to be registered with the National Home Builders Registration Council. At the moment the Department of Housing accredited the municipalities and subsequent to the accreditation the municipalities must register with the NHBRC. However, the role of the MEC was not defined in the legislation. Mr Tau raised questions about the role of the NHBRC at provincial level.

Rev P Moatshe (ANC, North West) stated that the province could not submit the negotiating mandate due to the delegates being out of the country.

Mr N Mack (Western Cape) informed the Committee that his province supported the Bill.

Discussion
Rev Moatshe stated that the matter of the sign-off was important; he pointed out that since most of the new occupants knew nothing about construction and did not have any previous houses on which to base any comparison, they were unable to say whether they were happy with the standard of work. He suggested that inspection should take place at every stage of the building.

Mr Watson supported this point.

Mr Mzizi raised the point of applicants not being traceable, and also requested clarity on the quality of materials used.

Ms Matlanyane questioned why the RDP houses were not interlinked, because the municipalities were saying that they obtained permission from the NHBRC and that this design was meant to minimise the amount of material used.

Mr Watson requested clarity on the method that would be used in capturing the inputs from provinces.

Mr Phetola Makgathe, Chief Executive Officer, NHBRC, replied that the concerns raised would be clarified by distinguishing between subsidy and non-subsidy houses, as the NHBRC was a player in both. Mr Makgathe stated that the visibility of inspection in the non-subsidy sector was considered to be a technical and administrative matter and not a policy matter. He promised the Committee that the Council would investigate the matter. He noted that in the subsidy sector NHBRC had a full time person to inspect every 500 units.

Mr Makgathe continued to clarify the issue of material used for construction and pointed out that in addition to the testing station of the Department, the NHBRC had its own to assist in ensuring that quality material was used.

Mr Makgathe clarified the respective roles played by the municipalities, provincial and national department and MECs. He said the NHBRC was involved in the subsidy sector from 1994 up until 2002. It was only subsequent to 2002 that provinces started to register with the Council,  and because of this gap the NHBRC was faced with many challenges, which included the provinces registering their projects. Provinces had been slow to register, and this applied to projects both in the rural and urban areas. In explaining the role of the NHBRC at a provincial level, he noted that every constructor,  whether private with sub-contactors,  or municipality, must be registered with the Council. This also assured the public that the builders were aware of what NHBRC required.

He went on to explain the “happy letters” situation. The NHBRC, in the non-subsidy sector for bonded houses,  undertook to take on the responsibility of the home builder should the project fail and they also ensured that the project had been registered. If there was dissent, then there would be a letter originating from the housing consumer, and the Council would play its part by sending someone to attend to the situation.

Mr Makgathe stated that to assure the public that the builder was competent NHBRC had a strategy at the entry levels. A person would pay R750 for administrative purposes, and would have to write a test. The Council also did credit checks and when a builder had become a member, an annual fee of R600 was requested by the NHBRC. In return for this that member would be offered free training. However, this situation had been misunderstood, and some Home builders were claiming that they are paying enrolment fees and the housing consumers were receiving a warranty. NHBRC maintained that the R600 annual fee was low compared to the R18 000 minimum cost that the Limpopo province had experienced. In terms of deregistration, withdrawal and suspension, the Council had suspended 118 000 home builders to date and was awaiting disciplinary hearings chaired by an external member. If a registered member disappeared,  legal action was taken against that person. Full payment should not be given unless the task had been completed. The procedure set out that builders should be remunerated on performance.

The Department of Housing elaborated further in respect of the subsidy sector by stating that the letter evolved in the final stages of the handing over. Transfer of the houses from government to home consumer took place only after the occupant had signed and moved into the house. Other than that, inspection would be done at every stage of the construction. After signing the letter the consumer had his or her name placed on the title deed. In terms of the flow of money from the government to the constructor, the process consisted of five phases:  Phase 1 being the contract for services offered, phase 2 being the laying of the foundation, phase 3 including the building of the walls, phase 4 being the placement of the roof and phase 5 being the final sign-off letter.

The Chairperson said that the permanent delegates would be meeting on 12 September to submit the final mandates.

The meeting was adjourned.