Code welcomed but doubts aired over NHBRC implementation.

Strict consumer protection measures embodied in a new National Homebuilders Registration Council (NHBRC) code of conduct emphatically bolstering their protection in dealings with home builders have been generally applauded by the real estate related industry.

However, serious concerns have been expressed if the NHBRC has either the skills or capacity to fulfil their greatly heightened protection role.

The code, effective from March 15, has been drawn up by the NHBRC in terms of Section 7 of the Housing Consumer Protection Measures Act. It is intended to provide minimum standards to be maintained by all NHBRC Home Builders. By law, homebuilders have to be registered with the NHBRC and are required to pay a 1,3 percent levy of the total cost of the building to the NHBRC to ensure that they oversee that certain standards are met and guarantees fulfilled.

The new code embraces a 30 day cooling off window; the buyer’s final payment to the builder being subject to NHBRC satisfaction that the buildings meet prescribed minimum standards; and there are no restrictions or clauses which could impair consumers’ rights.

While acknowledging the code’s positive consumer benefits and its necessity, T C Chetty, planning director with Moreland Developments, pointed out that the NHBRC, in his view, had effectively failed to implement their existing codes and legislation through either lack of capacity or skills to manage the process.

In spite of substantial funding given to the council for protection Chetty said, “when push had come to shove” the NHBRC had not really taken any measures against shoddy workmanship. “In principal the new code is very welcome but it must be implemented to be of benefit to the consumer.”

Richard Thomas, KZN divisional director, Nedbank Corporate Property Finance, expressed similar misgivings on the NHBRC’s ability to administer the new code. The council had been a source of many frustrations over the past five years with the primary one being what value and support were they offering the end user.

Thomas understood the ethos of the new code and the merit of its application to tighten up in the smaller home building market sometimes prone to gaps being taken by unscrupulous builders, but the NHBRC role would be better served in rating the efficiencies of homebuilders rather than an across the board blanket policing.

Massive contracts of hundreds of millions of rands employing highly qualified engineers and architects did not require the intervention of the NHBRC whose staff were often less skilled than those employed in private contract work.

However, doubts of both skills and capacity deficiencies at the NHBRC have been denied by NHBRC managing director Phetola Makgathe, who said the council employed 13 engineers nationally, regional inspectors and used private sector resources when necessary to fulfil its role. He also defended the council’s efficiency, often accused of tardiness, in protecting consumers complaints against builders pointing out that home building was subject to “inherent conflict” caused by frequent changes in plans, resulting in a “mish-mash of expectations by the buyer.

Complaints were investigated and if justified the builder, in about half of the cases investigated by the NHBRC, was instructed by the NHBRC to carry out remedial work. However, some did not undertake curative procedures.

The requirement, in terms of the new code, making final payment to the builder subject to NHBRC final certificate of approval would not delay or hinder building completion times because NHBRC inspectors monitored building progress.

The “all clear” procedure Makgathe believed would help eliminate the cheating of ignorant housing consumers who often signed “happy letters” – blank letter headed notepaper – indicating their satisfaction with their new home.

On balance, property economist Erwin Rode, sees the code doing more good than bad in view of the number of fly-by-night builders in the construction industry. However, he is concerned at the 30-day waiting period contained in the new code, believing it will slow down new delivery even more in an already too lengthy process. A seven-day period would offer sufficient consumer protection.

Proprop’s Mike Bennett is of the same view, believing the 30-day period will allow too much time for often uninformed sources influencing would-be buyers into changing their mind and encouraging them to opt out of contracts.

The NHBRC is currently carrying out a national road show meeting the top 50 homebuilders in major areas. During the past week the NHBRC held meetings in Cape Town and the Eastern Cape and would shortly be meeting with KZN’s top 50 homebuilders.
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