ATC120613: Report on Rental Housing Amendment Bill [B 21-2011], dated 13 June 2012
Human Settlements, Water and Sanitation
Portfolio Committee on Human Settlements report on the Rental Housing Amendment Bill [B 21-2011], dated 13 June 2012
Report of the Portfolio Committee on Human Settlements on the Rental Housing Amendment Bill [B 21-2011], dated 13 June 2012
The Portfolio Committee on Human Settlements, having considered the Rental Housing Amendment Bill, referred to it on 1 November 2011, reports as follows:
Introduction
From the outset, the Portfolio Committee on Human Settlements (the Committee) followed a thorough and exhaustive process in order to do justice to its constitutional mandate on processing the Rental Housing Amendment Bill (RHAB). Because rental housing forms a critical component of the available housing stock in South Africa , the Committee took its mandate very seriously. Injustices observed during oversight visits and learned from written complaints received from the public or reported in the media stressed the fact that the democratic government inherited a housing sector that is still plagued by historical challenges, including inequality and unfair practices. These instances have also proven to the Committee that the Department of Human Settlements is hampered in bringing about transformation in the rental sector because the legislative environment is not sufficiently enabling.
Object of the Bill (as introduced by the Minister)
The Bill seeks to:
· amend the Rental Housing Act, 1999 (No. 50 of 1999);
· address various implementation, legal and administrative challenges experienced by the Rental Housing Tribunals (RHTs) and provinces, since the inception of the Act; and
· make the establishment of the RHTs mandatory in every province.
Process followed in processing the Bill
The processing of the Rental Housing Amendment Bill resulted in several engagements between the Committee, the national Department of Human Settlements (including its legal advisers), the Office of Chief State Law Adviser, and Parliamentary Legal Services. The Department sent large teams to be present during each meeting where the RHAB was considered by the Committee and the Committee specifically invited and considered input from the Department on all proposed amendments. It is not clear why such a large team was required, and the financial implications of sending such a large team is of concern to the Committee, especially given the subsequent manner in which the Bill was withdrawn. It must be noted that even at the meeting of 30 May during which the withdrawal was considered, a similar sized team was sent to attend the meeting.
The Committee also called for submissions and hosted two rounds of public hearings at Parliament on 6-8 December 2011, as well as on 24 April 2012. The second round of public hearings was required due to the additional amendments effected by the Committee. The Committees deliberations were also informed by research commissioned by Parliaments Research Unit.
From the outset the work of the Committee was hampered by the failure of the Department to provide it with a copy of the principal Act that incorporates all amendments affected to date this is a fundamental tool to consider any amendment of the legislation. The Government Printing Works could also not provide a copy of the principal Act as amended. In the end and as nothing was forthcoming from the Department, the Committee had to conduct its own internet search to obtain a copy of the principal Act. This resulted in an unacceptable delay of three to four days.
On 31 January 2012, the Committee was granted authorisation by the National Assembly in terms of National Assembly Rule 249(3)(b) to effect further amendments to the principal Act, whereupon the abovementioned public hearings in April were called. The Committee also accommodated three further public submissions as well as two presentations during Committee meetings.
On 23 May 2012, the Minister, informed the Speaker of the National Assembly that he is withdrawing the Bill. The withdrawal of the Bill appeared in the ATC of 29 May 2012.
Key issues raised by the Committee during deliberations on the Bill
Business case
The Committee noted that the Department failed to submit a business case, which provides specific information on the cost associated with implementing the proposed legislation. Despite the Committees request for a copy of the said business case, it was not forthcoming from the Department. This would obviously assist Parliament to assess whether legislation is indeed implementable.
The Bill seeks only to address specific issues related to the correction of wording (e.g. Housing versus Human Settlements), the extension of the application of the Act to all provinces, expanding the composition of RHTs and giving rescission rights to RHTs.
Consideration of public comments
During its engagement with the Department, and following on the above public hearings, the Committee observed that the Department failed to consider and incorporate numerous important issues raised by the public in response to the Departments call for public comments when drafting the RHAB. The Departments response was that while these issues may have merit, the public submissions only narrowly addressed the objectives of the Bill as introduced and which were indicated in the call for comments.
The Committee through its oversight mandate encountered numerous challenges with respect to shortcomings in the principal Act, which in its view should be reviewed. During its past interactions with the Department, the Committee informed the Department of these issues. Because the Committee views the impact of a transformed rental housing sector on the socio-economic circumstances of especially vulnerable members of the public as critical, the Committee felt that there was a need for it to conduct a clause-by-clause review of the principal Act, taking into account the initial public submissions made to the Department.
During its engagement on the Bill, the Committee raised reservations about the Departments failure to adequately consider public input, especially as the Department concurred that issues (whilst not incorporated into the Bill) have substantive merit.
Regulatory Impact Assessment
In response to the Committees enquiry, the Department acknowledged that it did not conduct nor commission any evaluation or impact assessment of the principal Act, which would inform the content of the RHAB as tabled in Parliament.
The Committee also raised other aspects that impact on the implementation of the principal Act and subsequently on the RHAB:
§ Despite the principal Act being promulgated in 1999, and again amended in 2007, to date no regulations have been issued by the Department this includes very important regulations on what constitutes unfair practices. The lack of regulations having been promulgated under the principal Act further hampers clarity on how the Act should be implemented and thus what challenges exist to be addressed in the RHAB.
§ The Department confirmed that it has not developed a comprehensive national rental housing policy an element that is essential to inform the implementation, evaluation and amendment of legislation. Instead, only a social housing policy is available which deals with incentives for public rental housing, while the regulation of public rental housing as well as the private rental sector remains excluded from any governmental direction which is to be contained in such a comprehensive policy.
Proposal for further amendments to the principal Act
Having considered the above and some other issues identified by the Committee, the Committee agreed that the Rental Housing Act should address the challenges the country faces in respect of the rental sector and must thus be reviewed in total. As the Committee did not wish for the Act to be amended again in a short space of time, it sought permission in terms of National Assembly Rule 249 to effect further amendments to the principal Act, which were to be incorporated into the RHAB so that these identified gaps are comprehensively addressed.
Amongst others, the Committee identified the following aspects to be addressed:
§ The need to define some of the concepts used in the Bill (which were absent), such as arbitrary eviction, habitability and maintenance;
§ A policy for the rental housing sector is already provided for in the principal Act, but the Committee felt that the existing obligations of the Department could be spelled out more clearly;
§ The principal Act is not set out in a manner that makes it easy for the public to identify their rights and obligations;
§ Rental Housing Information Offices are key to the success of RHTs and must be a presence in every Municipality;
§ The RHTs processes did not include an appeal process, but required parties to take a decision on review to the High Court. This remedy was very seldomly used and mostly only in respect of public housing. The Committee was concerned about whether this was because few members of the public could afford to access the courts system. Unfortunately the Department did not provide the Committee with more information than what is set out in this paragraph.
(see detailed report submitted to the Office of the Speaker dated 15 February 2012).
Subsequently, the Committee sought advice from the Parliamentary Legal Services. Thereafter, the Committee further engaged with the Department and other stakeholders (including the Office of the Chief State Law Adviser) on the challenges identified in the principal Act and the proposed way forward. The Committee reached consensus with all stakeholders (including the Department) on the need to redraft the RHAB and to request the National Assemblys approval in accordance with the National Assembly Rule 249(3)(b), which provides that a committee may, if considering a Bill that amends provisions of legislation, seek the permission of the Assembly to inquire into amending other provisions of that legislation.
The Committee would like to emphasise that it consulted with the delegates of the Department who attended Committee meetings as well as communicated with the Minister about its intention to apply for further amendments in accordance with Rule 249(3)(b) (see copy of correspondence dated 31 January 2012). Permission was requested and granted by the National Assembly.
The Committee would like to point out at this stage its thorough and exhaustive engagement with the RHAB which was also acknowledged by a civil society organisation, namely the Organisation of Civic Rights, which commended the Committee for the way in which it processed the RHAB, and for identifying gaps and for doing groundbreaking work in South Africa that follows global trends (see email dated 26 January 2012).
Thereafter, the Committee called for a second round of public comments on the revised version of the RHAB. Public hearings were conducted in Parliament on 24 April 2012. The Committee wishes to point out that the first round of public hearings based on the RHAB as introduced by the Minister elicited a number of substantive issues outside of the objectives of the RHAB as introduced, which indicates that the RHAB as introduced did not address a significant number of concerns. However, the second round of public hearings based on the revised version of the RHAB, which incorporated the Committees amendments, elicited comments which dealt directly with the proposed amendments. This implies that the first draft introduced by the Minister did not adequately address the real challenges in the rental sector.
Some further issues for consideration
Appeal mechanism
The Bill as introduced failed to make provision for an appeals process in the event of one of the parties not being satisfied with the ruling by a RHT. The RHTs processes required parties to take a decision on review to the High Court. The Committee was concerned about access to and affordability of the courts system to vulnerable tenants in particular. The Committee proposed an appeals mechanism to address the plight of both parties in terms of a speedy, accessible and cost-effective resolution mechanism.
Already precedence was set in the promulgation of the Sectional Titles Scheme Management Act, No 8 of 2011, and the Community Scheme Ombud Services Act, No 9 of 2011, through the establishment of an appeals mechanism. Both pieces of legislation were introduced by the Minister of Human Settlements during 2010 and promulgated in 2011, at which stage the Department supported the concept of an appeals mechanism. Representatives of the Department themselves proposed that should the Committee want to include appeals mechanism, the mechanism used in these two pieces of legislation must be used as an example. The Committee is of the view that the argument of the Minister in his letter of the withdrawal of the RHAB, namely that the proposed appeals mechanism would result in a protracted process, and ultimately defeat the main purpose of the principal Act, is in fact not valid or factual.
With reference to the latter, it should be noted that the Committee in fact explored ways in which the cost and time period associated with the appeals mechanism could be minimised, while also ensuring that vulnerable people have immediate access to fair and just processes. In this regard the Committee was assisted by the Gauteng Rental Housing Tribunal. It indicated that due to pre-mediation interaction as well as the mediation process that precedes hearings, a very small number of appeals would be filed. In Gauteng , of the 10 873 complaints received between 2001 and 2010, 48% were resolved during pre-mediation interaction, 30% during mediation, resulting in only 17% (1 860 complaints in 10 years) proceeding to an actual hearing. Of the matters that proceeded to a hearing, most were resolved by way of settlement. It is thus only those very few cases not settled during the hearing that could result in an appeal.
The Committee strongly disagrees with the suggestion that the proposed amendments could possibly result in disinterest or disinvestment within the market. Instead, the Committee is of the view that the proposed amendments will in fact comprehensively and holistically address challenges in the rental housing sector to the benefit of both investors and tenants as opposed to the Ministers focus limited only to address a certain or individual sector, which is the market.
Implementation of the RHAB
The Committee would like to challenge the suggestion of the Minister set out in his letter withdrawing the RHAB that the way in which the Committee processed the Bill resulted in making it both legally and practically impossible to implement, given the courts current display of judicial activism. On the contrary, the Committee sought extensive legal input from both the Office of the Chief State Law Adviser and the Parliaments Constitutional and Legal Services Office on the legal implications or contradictions related to all proposed amendments. Legal advisers from the Department as well as officials responsible for implementation of the legislation were party to the discussions and afforded opportunity to provide inputs during the entire process. Upon consideration of the revised version of the RHAB, it appears to the Committee that this concern relates to the fact that the Departments obligations will be clearly spelled out in the legislation if promulgated. No obligations are added that do not already exist and given the roles of Parliament and the judiciary set out in the Constitution, 1996, whether these obligations are spelled out in legislation or not, the Executive will be held accountable. It is thus not clear what the fear of the Minister is in relation to implementation.
With respect to practical implementation that could relate to financial implications, the Committee would like to reiterate that the failure of the Department to submit a business case as requested hampered its ability to fully assess the financial implications for implementation. Further, since the Department failed to submit a business case, it can be regarded as premature to conclude that practically it would be impossible to implement and enforce the Bill in its revised form. However, the Committee did consider any possible financial implication in its proposals and has provided methods for implementation that would not incur any further costs.
Withdrawal of the RHAB
The Committee consulted and engaged extensively with the Department during the process, and it was afforded several opportunities to raise its concerns with respect to the implementation. The Committee is of the view that ample time was granted to the Department to participate and raise concerns in fact the Committee engaged with the Department on these issues during a 7-month period, from November 2011 until the end of May 2012 (approximately 15 sessions held deliberating on the Bill). Therefore, the Committee challenges the assertion that the Department be afforded more time to fully examine the impact of the proposed amendments.
Finally, whilst the Committee respects and accepts the right and obligations of the Executive Authority to withdraw the Bill, the Committee would like to express its reservations and disappointment at the fact that no consultation was held with the Committee on the withdrawal of the RHAB, as well as the tone of the letter that was submitted by the Minister to the Speaker dated 23 May 2012, as it presents a picture that the Committee acted outside its mandate by embarking on the process of redrafting the Bill.
Conclusion
The Committee is confident to report to the House that it has fulfilled its constitutional mandate in a substantive, fair and transparent manner. Through its engagement with various stakeholders, it became apparent that the scope of the Bill as introduced by the Minister was limited and failed to adequately address critical gaps in the rental housing sector. Through its proposed amendments, the Committee sought to address the current profiteering, exploitation and malpractices in the rental housing sector. It should also be noted that unequal power relations existing between landlords and tenants often result in negative consequences for the most vulnerable tenants.
The Committee was further informed by available evidence on international best practice in the rental housing sector in considering solutions to exorbitant rental prices.
Through its engagement with the Bill, the Committee faced the challenge of ensuring that the substance of the Bill gives effect to its stated objective in the preamble which seeks to resolve conflict speedily, at a minimum cost to the parties. The Committee was guided by this principle throughout its deliberations. Furthermore, the Committee strongly believes that there is a dire and urgent need to develop transformative rental housing legislation which seeks to broadly address enormous challenges facing the vast majority of the citizens in this country
Recommendations
The Committee therefore recommends that following the parliamentary processes and the withdrawal of the Bill in the Government Gazette, it be afforded an opportunity to embark on its constitutional mandate of initiating the rental housing legislation.
Assembly Rule 230(1) provides that the Assembly initiates legislation through its committees and members acting with the permission of the Assembly in terms of the Assembly rules. Rule 230(2) provides that any committee or member of the Assembly may in terms of section 73(2) of the Constitution introduce a bill in the Assembly that has been initiated in terms of Subrule (1) above.
The Committee agreed that it would pursue the initiation of the Bill through the procedure set out in the Assembly Rule 238(1), which provides that an Assembly committee intending to introduce a Bill in the Assembly must, for the purpose of obtaining the Assemblys permission in terms of Rule 230(1), table in the Assembly a memorandum which sets out particulars of the proposed legislation, explains the objects of the proposed legislation and states whether the proposed legislation will have financial implications for the State and, if so, gives an account of those implications.
Report to be considered.
Annexure - A
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ORGANISATION OF CIVIC RIGHTS (OCR) Est. 1984 011-241 NPO DCRA Trust No. 4656/92 PBO 18/11/13/4867 tenants rights, sectional titles and social facilitation specialist
In the service for a better and just society Member of Asia Pacific Network for Housing Research (APNHR); International Union of Tenants (IUT) and supporter of Habit at j a m
Third Floor, suite 302 , Salisbury House, 332 Anton Lembede (Smith) Street, Durban , South Africa |
031 304 6451 Fax 0866 907 651 Intl Code: + 2731 Intl Fax: +2731 3010026
é-mail: [email protected] Websites : www.ocr.org.za ; www.iut.nu = www.law24.com |
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Ms Beauty Nomhle Dambuza Chairperson, Portfolio Committee on Human Settlements
Respected honourable comrade On behalf of the OCR and the tenants around the country, may we salute you for your vigilance and commitment to the poor. We have read the minutes of the PC (January 18, 2012); it is clear that without your input and leadership, the Rental Housing Act would have probably changed around matters that were not even before the public. We are extremely concerned about the quality of service offered by the Tribunals and agree with you that proper timeframes are needed (some of which I included in the two sets of regulations drafted with the proposed amendment to the Act that gave the honourable Minister powers to make regulations.
If possible, we would like to meet with you. In the meantime, we will post you our literature that includes the Tribunals.
Yours comradely kind regards Iqbal ----------------------------------------- Dr. Sayed Iqbal Mohamed
OCR Office co-ordinators: Ms. Pretty Gumede & Ms. Loshni Naidoo: Tel +27 (0)31 304 6451 Fax 0866 907 651 Secretary General: Ms. Angel Paulsen: Tel +27 (0)2508500 Fax +27 (0) 31 2508533 e-mail: [email protected]
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Annexure - B
31 January 2012
Hon T Sexwale, MP
Ministry Human Settlements
Private Bag x 645
Pretoria
0001
Tel: 012 421 1610
Fax: 012 3206012
Dear Mr Sexwale
Re: Amendment of other provisions of the Rental Housing Act, 1999 (Act 50 of 1999)
The Portfolio Committee on Humans Settlement is currently processing the Rental Housing Amendment Bill [B 21-2011] to which end it had several engagements with the Department.
Having considered the Bills objectives, as well as content, the Portfolio Committee came to the conclusion that there are additional considerations which should be taken into account. The committees perspective is informed by its own oversight observations of the challenges facing the rental housing sector, complaints received from members of the public, as well as issues raised during public hearings. The Committee is of the view that these issues have not been adequately incorporated into the current Amendment.
The Committee anticipates that unless critical issues are incorporated into a wider amendment of the principal Act of 1999, it will necessitate further amendments in the near future. Further, the Committee holds the view that the legislation should be responsive to the challenges faced in respect of the rental housing sector.
The Committee, through parliamentary processes, also conducted intensive consultation with relevant parliamentary support services, as well as the State Law Advisors with respect to the Bill. As such, consensus was reached that the Committee has grounds to amend the sections of the Act, which is in addition to the proposed amendments in the Amendment Bill current before the Committee. In this regard, the Committees decision is guided by National Assembly Rule 249(3)(b).
The Committee would like to reiterate that its decision to amend additional provisions in the Act is borne out of its commitment to ensure a remedy is available for challenges faced by the rental housing sector, thereby insuring a better life for all.
The Committee would also like to take this opportunity to express its appreciation for the work done by the Department, and would welcome an opportunity for further engagement with the Department in this regard.
I trust that this communication will reach your favourable consideration.
Kind Regards,
_______________
Hon BN Dambuza
Chairperson: PC on Human Settlements
Annexure - C
Interim Report of the Portfolio Committee on Human Settlements on the Rental Housing Amendment Bill
The Portfolio Committee on Human Settlements, having considered the subject of the Rental Housing Amendment Bill [B 21-2011] (National Assembly sec 76), referred to it and classified by the JTM as a section 76 Bill, reports as follows:
The Bill seeks only to address specific issues relating to the correction of words (Housing vs Human Settlements), the extension of the application of the Act to all provinces, enlarging Rental Tribunals and giving rescission rights to Rental Tribunals. The Portfolio Committee on Human Settlements (the Committee) has borne witness to irregularities in the rental sector during public hearings and oversight visits. The Committee is of the opinion that the Act should address the challenges the country faces in respect of the rental sector. Moreover, the Committee does not wish for the Act to be amended twice in a short period of time and is thus proposing further amendments to the Act, which will be incorporated into the Bill. These amendments would make the Act more accessible to all, but especially to poor and vulnerable tenants. The proposed amendments will not affect the tagging of the Bill.
1. OBJECTS OF THE PROPOSED LEGISLATION
The objects of the additional amendments that will affect the principal Act are as follows:
· Defining arbitrary eviction and maintenance so that the phrase have a bearing on the poor and vulnerable and give clear guidance to their meaning;
· Expanding on the duties of Government - inter alia monitoring, education and financing so as to spell out the roles of the three spheres of Government for purposes of good intergovernmental relations and cooperative governance;
· Setting out the rights and obligations of tenants and landlords in order to make the Act accessible to the public;
· Making it peremptory for lease agreements to be in writing with the Act setting out the minimum content, to ensure that tenants and landlords can prove the extent of their agreement;
· Correcting an oversight in the Act by making provision for lease agreements to be enforceable by Rental Tribunals as well;
· Addressing the nature of rulings of Rental Tribunals so that Rental Tribunals rulings will give effect to the Act;
· Increasing the membership and alternate membership of Rental Tribunals to allow for more effective functioning;
· Allowing Tribunals to have two simultaneous sittings to promote effective functioning and providing for the accompanying governance principles;
· Allowing for an internal appeal process within Rental Tribunals to reduce lengthy and costly court review procedures;
· Requiring all local municipalities to provide a rental housing information office, even if this function is shared with an existing office, to ensure that Rental Tribunals are made accessible to people everywhere in South Africa;
· Defining the areas that require regulation and identifying peremptory regulations so that the delegated legislative duties on the Minister of Human Settlements are clarified;
· Providing for norms and standards aligned with the Department of Human Settlements strategy related to accessibility, inhabitability and affordability to provide Government with a tool with which exploitive practices can be curtailed;
· Including certain duties of landlords and tenants as offences so as to address areas identified as problematic for example non-refunding of deposits; and
· Making consequential amendments.
2. PROCEDURE TO BE FOLLOWED
Assembly Rule 249(3)(b) provides that a committee may, if it is considering a Bill that amends provisions of the legislation, seek the permission of the Assembly to inquire into amending other provisions of that legislation. In this regard, the Committee intends going beyond amending the sections in the Rental Housing Act as envisaged in the Rental Housing Amendment Bill. In order for the Committee to amend other sections of the Act over and above what is amended through the Bill as introduced, the Committee is seeking the permission of the Assembly to do so.
3. RECOMMENDATION
The Committee therefore recommends that the Assembly grant permission in terms of Assembly Rule 249(3)(b) for it to amend other provisions of the principal Act.
Report to be considered.
Annexure - D
List of submissions received
- Organisation of Civic Rights (OCR)
- Gauteng Rental Housing Tribunal
- Ms Nanadi Simone - Rights Empowerment
- Western Cape Rental Housing Tribunal
- Commission for Gender Equality
- National Rental Association of South African
- Inner City Resources Centre (ICRC)
- Eskom
- The Banking Association South Africa
- South African Local Government Association (SALGA)
- Social Housing Regulatory Authority
Documents
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