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Frequently Asked Questions 1. What Is The NHBRC? Housing Consumers (Home Owners) 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. 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:
10. What Role Does The NHBRC Play During The Building Process? We undertake risk management inspections to ensure compliance to our technical standards. 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. 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. 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 NHBRC’s fund for rectification covers a home which includes:
Home Builders Registration 21. Must Each And Every Homebuilder in South Africa Register 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:
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. 24. What Happens When You Fail To Register With The NHBRC? If you are in the business of home building and you fail to register, you will be found guilty of an offence in terms of Section 21 of the Act. On conviction, you will be liable for a fine not exceeding R25 000 or a one-year prison term on each charge. 25. Why Are Homebuilders Suspended? If the homebuilder fails to honour his/her obligations in terms of the Housing Consumers Protection Measures Act he /she may be suspended which may lead to a disciplinary hearing. 26. What Is The Total Cost For Registration? The total initial cost of R1450.00 apply and is made up of an application fee of R750.00 which is non refundable, an initial registration fee of R600.00 and R100.00 for the homebuilding manual. All registered homebuilders are required to renew their membership annually at a nominal fee of R600.00. The Council annually reviews the membership in order to evaluate the risk exposure that may emanate from the status quo, given the risk associated with the ever changing financial capacity, contract management and ownership status of homebuilders. The turnaround time for registration is a minimum of a day and a maximum of 5 days. Enrolments 27. Does the NHBRC Receive an Enrolment Fee of Each New House which is built In South Africa? The fees are designed to provide a warranty cover for 5 year major structural defects for all new homes enrolled. The law requires all homebuilders to enroll every new home with the NHBRC, irrespective of selling price or whether it is built through cash or mortgage loan. All new homes must be enrolled 15 days before construction commences. Before an enrolment certificate is issued, the homebuilder must pay an enrolment fee that has been determined. A house valued up to R500 000 is subject to a levy of 1,3%. An additional 1% is added up to R1-million, 0,75% up to R2-million and 0,5% beyond that up to a maximum of R34 000 per housing unit. Enrolment fees are included in the cost of construction. Comparatively, the NHBRC enrolment fee is far less than other short insurance products R500 000 x 1.3% = R 6500. A fee of R6500 is paid upfront to a cover a period of 60 months, which means that a housing consumer actually pays a fixed amount of R 108.33 per month. Comparing NHBRC’s fees with other short- term insurances over the same period, for example homeowner insurance, the average is R310 per month which amounts to R 18 600 excluding annual increases whereas on a motor vehicle the average fee is R 1100 per month which amounts to R 66 000 excluding annual increases. The selling price must include the land value reason being that most of the structural defects develop from the ground/land, that is why when submitting enrolment forms we ask for confirmation from the competent person to ensure that the correct foundation type is used. When building a Sectional Title you have an option of paying 100% enrolment fee or 80% bank guarantee and 20% upfront. The bank guarantee will be cashed after six months if the 80% has not been paid. 28. What Does The Enrolment Fee Cover? The enrolment fee which is paid by the housing consumer covers the following service such as, enrolment of the home, operating costs for inspection of the home, complaints handling and consequential remedial works. In the case of remedial works, the housing consumer is provided with accommodation, storage and transportation when the home is demolished and is being rebuilt. The cost of remedial works includes amongst others, demolition of a home, removal of debris, erection of the new home and all professional fees such as architects’, quantity surveyors’ and engineers’ fees). 29. What Are The Categories Of Applicable Enrolment Fees?
30. What Is The Turnaround Time of Enrolments? On the normal enrolment of homes the turnaround time is a minimum of one hour and a maximum of 24 hours, for the dolomitic enrolments the turnaround time is a minimum of 4 days and a maximum of 8 days and lastly for the Rational designs the turnaround time is a minimum of 48 hours and a maximum of 4 days. 31. Does the NHBRC have a Disciplinary Procedure? Yes. Where a contravention warrants a disciplinary process, a notice will be given to the builder advising him that the matter has been referred to the Committee, draw a charge, implications of the charge should be explained to the builder should he be found guilty and the builder is afforded a 30 days period to respond to the allegations. Following repeated requests from members of the public regarding the role of the NHBRC and the how the warranty scheme operates, this news release is designed to address those issues. |
