The Housing Consumers
Protection Measures Act 95 of 1998
Updated 2008 – EXPLAINED
1. The main purpose of the Housing Consumers Protection Act is to give protection to housing consumers. At the same time it created the NATIONAL HOME BUILDERS REGISTRATION COUNCIL (NHBRC), whose objective is to stand for the interests of housing consumers by giving a warranty to protect against defects in new homes and to give cover to housing consumers in respect of the failure of builders to fulfill their obligations in terms of this Act.
2. A housing consumer is a “person who is in the process of getting or has taken possession of a home and includes such a persons “successor in title”. What this means is, that for the period that the “original” homeowner is covered by the warranties that may be applicable in terms of this Act, that warranty remains in place no matter the change of ownership. Any other action undertaken by the first owner is transferred to, and enforceable by, the new owner – so long as the original owner did everything in line with the Act. Different time frames apply depending on what the defect is.
3. A homebuilder is defined as a person who carries on the business of a home builder and constructs a home for a housing consumer.
4. An owner builder may contract a homebuilder for the building of a home for occupation by that person. If someone builds himself a home, lives in it and later on sells it, the mere fact that the house is still new does not suddenly mean that for purposes of this Act, the seller of that house suddenly becomes a homebuilder.
5. “Occupation” is either the date that the housing consumer who first gets the home, accepts it as is by signing a document confirming the acceptance, this is known as a “happy letter”, this is needed by banks before they will pay out the loan on a bond that was registered for a new home, or the certificate of occupancy issued by a local authority in terms of the National Building Regulations and Building Standards Act of 1977.
6. By signing the acceptance document you take complete ownership of the house and you do not have to physically move in to “occupy” the house for the purposes of the Act.
7. Most important is the part of the Act that states that no person shall carry on the business of a home builder, or receive any remuneration from any agreement with a housing consumer in respect of the sale or construction of a home, unless that person is a registered homebuilder with the NHBRC.
8. If anyone or any company wants to do any sort of building work, they MUST first be registered with the NHBRC. Before they start work or accept any payment of any kind for the project.
If a builder has finished your entire house for you, and if they are not registered with the NHBRC, you don’t need to pay them a cent. Be aware that you will have to prove that did not know that the builder was not registered from the start otherwise you might also be found to be complicit in breaking the law.
You can read more about the NHBRC here: national-home-builders-registration-council
Here is a copy of the Act: