WHAT IS THE NHBRC?
The Housing Consumers Protection Measures Act 95 of 1998 was introduced into our law to protect housing consumers and establish the National Homebuilders Registration Council (NHBRC) as the regulatory body of the home building industry. The NHBRC also sets out to promote ethical and technical standards, holds home builders accountable for the homes they build, and provides sanctions for non-compliance.
WHAT IS AN NHBRC REGISTRATION CERTIFICATE?
In terms of section 10(1) of the Act, no person can carry on business as a home builder, or receive payment in terms of an agreement for the sale or construction of a home, unless he is a registered home builder. The NHBRC will issue him with an NHBRC registration certificate if he is registered. This means that it is unlawful in terms of the Act to build a home if you are not a registered home builder. Such a person can be convicted of an offense in terms our criminal law and be fined or imprisoned for up to a year.
It is also unlawful for an unregistered home builder to receive any compensation in terms of any building agreement in respect of any home, and any person who has already paid such a home builder can apply to court to have their money refunded. You should never utilize the services of any builder to build you a home, if that builder is not registered with the NHBRC, as you will not be entitled to compensation if a structural defect is discovered in the home in the 5 year period from occupation on-wards.
WHAT IS AN NHBRC ENROLMENT CERTIFICATE?
Section 15 of the Act requires that all homes must be enrolled at least 15 days before construction begins. Not all builders will take on the responsibility of enrolling a home, because an enrollment fee is payable, and so any home owner who is building a home must check with the builder whether the builder, or the home owner him/herself, will be responsible for enrolling the home.
It commonly happens that home owners are caught unawares when they expect their builders to enroll the home for them, only to find out years later that the builder’s building contract did not include this obligation and the builder was not responsible for doing this.
NHBRC enrollment certificates are valid for five years from the date of occupation. The date of occupation is the date on which the housing consumer first acquiring the home accepts the home as reflected in a document confirming such acceptance. If this document is not available, or if the NHBRC cannot for any reason determine the date, the date reflected on the certificate of occupancy issued by the city council will be the date of occupation.
WHY ARE NHBRC CERTIFICATES IMPORTANT?
Only the owners of homes built by registered home builders and enrolled with the council are entitled to the remedies under the Act.
When a home builder is registered with the NHBRC and the home is enrolled, the NHBRC will inspect the home and ensure it meets with the NHBRC technical requirements, which in turn ensures homes that are built are of a high standard and good quality. If the council is of the opinion that the home builder is not complying with the Act, they can impose a penalty and may apply to court to direct the home builder to comply, stop construction or grant assistance appropriate in the circumstances.
The NHBRC will compensate a home owner for certain types of damage in certain instances:
(a) There is a major structural defect in the home as a result of the home builder not complying with the NHBRC technical requirements within 5 years of the date of occupation, and the housing consumer has notified the home builder of the defect within those 5 years; and
(b) The home was constructed by a registered home builder, the house was enrolled with the NHBRC, and was still enrolled at the date of occupation; and
(c) The home builder is in breach of the building agreement with the home owner inasmuch as he has failed to rectify the defect, or the home builder no longer exists or cannot meet his obligations.
NHBRC CERTIFICATES AND TAKING OUT A BOND
Section 18(1) of the Act states that a financial institution cannot lend money to a person to purchase a new home from a home builder if:
(a) the home builder is not registered with the council;
(b) the home has not been enrolled with the council; and (c) the relevant fees have not been paid to the council.
In light of the aforesaid, it is a normally stipulated by the banks that a requirement for the registration of the bond is that the conveyancers must obtain the necessary NHBRC certificates before registering the bond, where the building on the property is less than 5 years old.
Written by Chantelle Gladwin- Wood and Alec Veitch