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The Housing Consumers Protection Measures Act

Why Legislation?

Many housing consumers have had difficulties with their home builders.

In the past there has been very little assistance for consumers should they be in dispute with a builder. Whilst many builders are 

good, service oriented companies, the actions of the bad elements has given the building industry a poor reputation.

The Act has been created to provide protection to buyers of new homes against the so-called "fly-by-night" builders. That is, builders 

who either build to an unacceptable quality standard or builders who refuse to get involved in the rectification of built-in defects in the 

home. The Act does this through the creation in law of a regulatory body known as the National Home Builders Registration Council 

(NHBRC). The NHBRC began operating as a regulatory statutory body in March 2001.

 
How does the Act work?

Currently the NHBRC gets involved with homes in the bonded, cash markets and subsidy sector. All new homes thus fall under the 

scope of the Act.

The Act ensures that:

All builders of new homes register with the NHBRC.

All new homes, no matter what price or demographic area, are provided with a "deemed warranty"

All new homes are covered by a "deemed warranty" which means, that by law a builder must:

Rectify any defects that occur in the first three months after occupation

Rectify any roof leaks that occur in the first twelve months after occupation

Rectify any major structural defects that occur in the first five years after occupation

Enrol all new homes with the NHBRC.

Be aware that, neither mortgage loans, nor provincial housing board subsidies, will be granted without the home 

being enrolled with the NHBRC.

How does the NHBRC assist the consumer?

Having a "deemed warranty" is a major step forward in consumer protection. However if the builder is no longer in business, nor is willing 

to fix a problem, the housing consumer will have great difficulty in obtaining any form of real satisfaction.

Through the NHBRC enrolment process however, several benefits can be achieved for the consumer:

All homes must comply with NHBRC’s Home Builders Manual, which sets minimum quality standards.

The NHBRC must ensure that foundations have been correctly designed to match the existing soil conditions.

All homes must be inspected by the NHBRC Inspectorate to check that the home builder is actually complying with the NHBRC 

requirements on site.

Through these three reasons alone, the NHBRC aims to prevent the most commonly known defects from happening in the first 

place.

However, the NHBRC Inspectors cannot be on-site all of the time and some serious defects are inevitable.

If a defect happens and the consumer is having difficulty with their home builder, they can contact the NHBRC for assistance. The 

consumer does not have to employ Lawyers, Architects or Engineers to assist them in the event of a defined structural defect.

The NHBRC will investigate the complaint, and if found valid, will contact the home builder and insist that the problems are attended to 

within a specific time frame. If the builder does not co-operate, the NHBRC may hold a meeting on site between the consumer and the

 home builder, which normally results in the builder honoring their warranty obligations. If the builder has already closed his business 

the NHBRC may use its funds to pay another builder to fix the structural defects.

Additionally, the NHBRC will publish and distribute lists of its registered home builders and any builders who have been de-registered or 

suspended. These lists (also on the internet) will give the details of the home builder, the number of homes they have built and the 

number of serious complaints, if any, laid against them. All of this will assist the consumer in the correct choice of their home builder.

 
Benefits to the home builder

There are many benefits to the home builder.

Registration makes the home builder a "legal" entity in the eyes of the banks and worthy of qualifying for financial assistance during the 

building process.The Act will oblige banks to ensure that the home builder is registered and the home is enrolled with the NHBRC

before any loan can be granted for the construction of a home.

The NHBRC is in the process of developing a grading system whereby a home builder will be awarded a grading for the quality of their

work: In this way, home builders will be able to advertise their rating to attract more clients who in turn will have a better idea of the 

quality of the work and service that can be expected from the home builder. Additionally, the home builder's fees, paid towards the NHBRC,

 will reduce as the builder's grading status increases.

Builders will benefit from their consumers knowing that the builder has been evaluated by an independent organisation and that they are 

re-evaluated every year.

Builders will be entitled to use the NHBRC logo on their stationery, vehicles and marketing material to advertise the fact that they are 

registered and the grading they have.

The NHBRC will also publish regular circulars and technical information sheets to registered home builders to keep them up to date 

with the latest events and innovations in the home building industry.

 
The extension of the scheme

The new NHBRC Defects Warranty Scheme extends the protection of home warranties to owners of new homes.

Beneficiaries of the state subsidy scheme will also be covered by the Warranty. Contracts between provincial housing boards and the 

NHBRC will provide cover for this form of housing whilst significantly reducing administrative processes and costs. New housing above 

the R250,000 selling price will also be covered whether the building is financed by a bank or built for cash. By covering all homes, the 

NHBRC is able to provide uniform protection to all South Africans at an affordable price.

 
Information and education

The NHBRC intends to maintain a wide ranging information campaign aimed at all stakeholders in the home building industry and 

consumers of new housing products.

Additionally, the NHBRC will extend it’s current contractor training seminar programmes so that more contractors, and specifically 

historically disadvantaged builders, will learn about the NHBRC and become more proficient in their building practices and customer 

service activities. 10 Million rands has been allocated to develop this emerging contractor programme so that all registered NHBRC 

members and their employees can be trained in project management and financial skills.

Housing Consumers (Home Owners)

1. What Is The NHBRC?

The NHBRC is an acronym for the National Home Builders Registration Council which is an organ of state established in terms of the 

Housing Consumers Protection Measures Act,1998 (Act 95 of 1998).


2. When Was The NHBRC Founded?

On 26 March 2001 a Statutory Council was installed, in accordance with the provisions of the Housing Consumers Protection Measures 

Act, 1998 (Act No. 95 of 1998). 


3. What Purpose Does The NHBRC Serve?

The NHBRC protects the interests of housing consumers (home owners) and regulates the home building industry. All homebuilders 

must register with the NHBRC and all homes must be enrolled 15 days prior to the commencement of building.


4. What Is Covered By The NHBRC Warranty Scheme?

The warranty scheme protects the housing consumer by providing a five-year warranty against major structural defects on the new 

home, 90 days defects liability warranty cover,12 months roof warranty cover.

A housing consumer (home owner) will have the assurance that a homebuilder registered with the NHBRC has agreed to abide by the 

rules and regulations laid down by the NHBRC. This means that the homebuilder has agreed to build the enrolled house to a minimum

quality standard that has been set out in the NHBRC's Home Building Manual.


5. Who Audits The NHBRC?

The Office of the Auditor General has given three consecutive unqualified audits reports in the past three years. It should be borne in mind 

that the Office of the Auditor General invites itself to conduct audits on any public entity. The independent audit of the Office of the 

Auditor General has confirmed to the public that NHBRC is properly managed. The increase in both home enrolments and registration of homebuilders demonstrates public confidence.

 

6. Does The Act Make Provision For Alterations and Improvements?

The Act does not make provisions for the alterations, conversions, additions or improvements, but the matter is being discussed with 

an intent to make a recommendation to the National Department on Housing.


7. How Does One Know Whether A Builder Is Registered With The NHBRC?

The NHBRC has established provincial customer care centres in all the provinces. To find out if a builder is registered with the 

NHBRC you can simply contact your nearest office, or consulting our website www.nhbrc.org.za  or by calling the toll free number

0800200824.

Inspections

8. Does The NHBRC Conduct Inspections?

Every new house constructed must be inspected. If the house is enrolled prior to construction, the NHBRC is afforded the 

opportunity to carry out all necessary inspections. The number of inspections conducted per house is a function of the size and the 

complexity of the design of the house.


9. What Does The NHBRC Really Inspect?

 The following inspections are carried out:

Foundations

Roof height

Practical completion

Stormwater

Carpentry

Plumbing

Electrical

And waterproofing


10. What Role Does The NHBRC Play During The Building Process?

We undertake risk management inspections to ensure compliance to our technical standards.

 

11. How Many Inspections Are Carried Out By The NHBRC In The Building Process Up To Completion Of A House?

A minimum of four inspections are carried out to ensure that the house is of good quality and that it will be fit for habitation. Housing 

consumers and home builders are encouraged to demand an inspection from the NHBRC during construction.


Complaints

12. How Does The NHBRC Handle Complaints?

The NHBRC has established a complaint handling mechanisms, which has assisted many housing consumers. Each complaint 

is professionally and speedily processed on behalf of the housing consumer. According to our records the NHBRC has not failed any 

housing consumer who had a genuine structural defect. All home owners, public and private institutions and media houses are 

advised to send all the complaints received by it to the NHBRC for evaluation.


13. What is conciliation?

This is a process whereby the NHBRC calls both the housing consumer and home builder to site to check which items of the housing 

consumers complaints are valid and need to be rectified by the home builder, with the aim of resolving the dispute.

14. What Does Conciliation Cover?

Conciliation covers all relevant structural concerns of the housing consumer and clarifying the homebuilder's responsibility and the 

housing consumer's obligations.

 

15. What Should a Home Owner Do When There Is a Problem with a Builder’s Work?

The housing consumer (home owner) should contact the home builder within three to seven days. The housing consumer can 

approach the NHBRC if the home builder fails to attend to the problem.


16. How Does The NHBRC Prevent A Deregistered Builder To Re-Register Under A New Name And Still Continue Building?

The ID details of the individual directors, owners of the companies/close corporations and sole traders are captured on the IT system, 

preventing re-capture of the same under different companies/close corporations.

 

17. Under What Circumstances Will The NHBRC Do Remedial Work To My House?

The NHBRC is responsible for repair of major structural defects which occur to an enrolled home.  The process is initiated once it 

is established that the home builder is either liquidated, unwilling or is unable to undertake remedial works. When the homebuilder 

disputes the findings and recommendations in the conciliation report or the recommendation of a competent person (Engineer), the 

NHBRC will assist the housing consumer by undertaking remedial work.

18. Is The NHBRC Doing Anything About Consumer Education?

The NHBRC is engaged in numerous campaigns to educate housing consumers about their rights and obligations.  Knowledgeable 

housing consumers too, alert the NHBRC about any inappropriate use of inferior material on site and will support other initiatives of the 

NHBRC.

19. How Much Has Been Spent On Remedial Works By The NHBRC?

Over the past five years NHBRC has spent over R25 million in remedial works.

20. What Happens If Major Structural Defects Arise Within The First Five Years Of Occupation?

The housing consumer notifies the builder

The defect is a result of non-compliance with the NHBRC Technical requirements

The homebuilder is in breach of his obligations to rectify a major structural defect

The home was built by a registered homebuilder and was enrolled with the fund at the date of occupation

The homebuilder no longer exists or is unwilling or unable to meet his obligations.

The NHBRC’s fund for rectification covers a home which includes:

Private drainage system from the structure up to the municipal connection or the cesspit connection

Any garage or storeroom

Any permanent outbuilding designed for residential purposes

Any retaining wall

In the case of sectional title unit, it includes the common property in terms of the sectional Titles Act.

Home Builders

Registration

21. Must Each And Every Homebuilder in South Africa with the NHBRC?

Yes, every builder who is in the business of home building must be registered with the NHBRC in accordance with Section 10 of the 

Housing Consumer Protection Measures Act. In terms of section 10 of the Housing Consumer Protection Measures Act 1998(Act 95 of 

1998) any person in the business of home building is required by law to register with the NHBRC.

 

22. What Process Should Be Followed When One Wants To Register With The NHBRC?

 It is easy to register with the NHBRC; all builders need to do is to contact the NHBRC to obtain a copy of the registration form. After 

completing the form the builder has to return it to the NHBRC and an invoice will be generated which is used to make payment for the 

application fee. A prospective homebuilder must demonstrate the following:

financial capacity, technical capacity, and managerial capacity.

 

23. What Are The Benefits Of Being A Registered Homebuilder?

Registered homebuilders are recognized by financial institutions as homebuilders, and are accepted sas reputable homebuilder by 

housing consumers (home owners). Builders gain access to NHBRC technical requirements as contained in the homebuilding manuals. 

A homebuilder will access the NHBRC free training programmes offered in both rural and urban areas.


Source - NHBRC Website - www.nhbrc.org


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