Registration of Home Builders

Introduction - Legal Background
Registration Fees
Your application
Assessment of your application
Conditions for registration
Registration
Renewal of Registration
Suspension, Withdrawal and Deregistration of home builder
Home Builder's Obligations
Owner Builder

Introduction – Legal Background

Home Builder's Obligation

In terms of Section 10 of the Housing Consumers Protection Measures Act, 1998 (the Act) any person in the business of home building must register with the National Home Builders Registration Council (the NHBRC).

Legal Implications

If you are "in the business of home building" and you fail to register, you may be found guilty of an offence in terms of Section 21 of the Act. On conviction, you may be liable for a fine of up to R25 000 and/or a one year prison sentence on each charge.

Exception: Owner Builders

Owner builders, within the meaning of the Act, need not register with the NHBRC. See section on Owner Builders for further information.

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Registration Fees

The following fees apply. All include VAT.

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Your application

How to apply

Follow these steps to apply for registration with the NHBRC:

Addtional Information

The NHBRC may require additional information from the home builder or any other person and may conduct investigations that is considered necessary to assess your application.

Warning

It is an offence in terms of section 21(1) of the Act, for any person to knowingly withhold information or to provide false or misleading information in this application.
Legal consequences
Every director, trustee, managing member or officer of the applicant who knowingly permits such a contravention is liable on conviction, for a fine of up to R25 000 and/or up to aa one year prison sentence on each charge.

Assurance of confidentiality

The NHBRC and any persons contracted by it will treat any financial information as confidential.

Assessment of your application

How your application is assessed

The NHBRC will evaluate your application for registration on your:

• financial
• technical
• construction, and
• management capacity for your specific business.

The NHBRC will also be seeking to satisfy itself that you will comply with your obligations as a registered homebuilder in terms of the Act.

Guarantees

If the NHBRC receives an application from a home builder, who in the opinion of the NHBRC

• has limited capital, fixed assets or active trading history; or
• appears not to have the ability to meet its obligations to housing consumers and to the NHBRC,


then the NHBRC may require that the
• home builder
• partners
• directors
• members
• shareholders
• trustees of the home builder
  provide personal surety ships, indemnities or guarantees to the NHBRC.

Where the NHBRC receives an application from a home builder with associates, the NHBRC shall require guarantees from the associates.

This requirement is covered by Section 10(5) of the Act.

Definition of "associate"

An associate is any person or body that exercises substantial ownership or management influence in respect of the home builder including the holding of shares or interests of not less than 20 percent of issued shares or total interest.

Technical evaluation

The NHBRC has the right to carry out a technical evaluation of the home builder by means of:

• a technical interview to determine the ability of a home builder to comply with the guidelines set out in the Home Building Manual
• site visits or inspections to examine homes or other construction work already completed or under construction by the home builder

Conditions for registration

Pre-conditions for registration

Before a home builder is registered, the NHBRC may require as a pre-condition for registration the:

• satisfactory rectification of previous construction related problems, or


• satisfactory resolution of financially-related problems, such as the rescinding of court judgments.

Conditional registration

If a home builder is registered with conditions or provisionally, the NHBRC registration may:

• limit the number of homes a home builder may enrol
  
• require the home builder to notify the NHBRC inspectorate of key stages of construction in sufficient time to allow the NHBRC to arrange for inspection at its discretion, and


• apply any other reasonable condition that the NHBRC considers appropriate until the home builder is able to demonstrate his/her capacity to meet the obligations of a registered home builder.

Notification of conditions of registration

If registration is subject to conditions or a provisional registration provisional registration is granted, the NHBRC shall notify the home builder of its decision. This decision takes effect:

• on receipt of written acceptance of any conditions from the home builder, or
• 30 days after it has been notified to the homebuilder (unless the home builder exercises his or her rights to make written representation to the NHBRC).

Registration

Issuing of registration certificate

The NHBRC will issue a registration certificate to a homebuilder where it has received:

• written acceptance of any conditions
• any suretyships, indemnities or guarantees requested, duly signed and completed, and
• payment of the registration fee.

Period of Validity

The registration of a homebuilder remains valid for one year.

Registration is not transferable

Only the registered homebuilder shall use this certificate and registration number. No other company, person or any other entity shall use it to enroll homes or for any other purpose.

Warning: legal penalty for abuse of a registration certificate

Abuse of a registration certificate is to provide false and misleading information. This is an offence in terms of section 21(1)(a) of the Act and is subject to a fine not exceeding R25 000 or to imprisonment for a period not exceeding one year on each charge.

Change of registration status

A homebuilder who has been registered on a provisional basis may apply for review at anytime. The NHBRC will treat such an application with urgency and will deliver its decision, where practical, within a period of two weeks.

A homebuilder is requested to provide reasonable assistance to the NHBRC to facilitate any investigation required to uplift the home builders status.

Review of registration

The NHBRC may at any time - or at the request of the homebuilder - review the home builder's registration. It may take account of:

• any complaints received from housing consumers
• any notices of non-compliance issued to the homebuilder
• the enrolment history of the homebuilder, and
• any other relevant matter

Process of changing the registration status

If the NHBRC decides to change the registration status of a home builder or the conditions attached to his or her registration, the following process applies:

Renewal of Registration

Renewal of registration

Every home builder shall apply annually for the renewal of his or her registration with the NHBRC. This must be done before the renewal date of the current registration.

The renewal process

The following outlines the renewal process:

Stage	Description
1.	One month before the current registration expires The NHBRC notifies the home builder of his or her obligation to renew registration. Note: The NHBRC will issue two further notices to remind the home builder of the need to renew.
2.	From Expiry date of registration The NHBRC may suspend enrolments until the home builder has renewed his or her registration.

Note:

The NHBRC may request the home builder to confirm the accuracy of the data maintained on the NHBRC database.

Effects on obligations

Failure to renew annual registration or the withdrawal of registration does not affect the home builder's obligation regarding housing consumers or the NHBRC.

Re-application

A home builder who was registered with the NHBRC but who fails to renew his or her annual registration may reapply for registration.
The NHBRC shall consider the home builder re-application for registration having regard to his or her pervious registration history.

Suspension, Withdrawal and Deregistration Home Builders

Suspension of registration or enrolments

The NHBRC may suspend a home builder's registration or its rights to enrol a home where:

• it has information that the home builder has failed to comply with section 11(1) of the Housing Consumer Protection Measures Act; and
• immediate intervention is in the interest of housing consumers.

Home builder's response

Before suspending a home builder's registration or his or her rights to enrol homes, the NHBRC must notify the home builder and provide him or her with the terms of the Act.
The suspension may continue for a period to allow the NHBRC to investigate the matter or until the home builder has complied with the terms of the Act.

Withdrawal of Registration

The NHBRC may withdraw the registration of a home builder only where a home builder has been found guilty by the disciplinary committee of charges the he or she failed to comply with his or her obligations in terms of the Act.

Cancellation of Registrations

The NHBRC will cancel the registration of a home builder on the written request from the home builder.

Action Required

If a home builder's registration is withdrawn, cancelled or not renewed, he or she shall;

• refrain from presenting himself or herself as a registered home builder
• immediately return to the NHBRC any registration or enrolment certificates or promotional material referring to the NHBRC or implying a registration status awarded by the NHBRC.
• refrain from providing any enrolment certificate to any other person on an enrolled home that has not been occupied prior to the expiration date of his annual registration without the express written consent of the NHBRC
• continue to comply with his or her obligations under the Act and the Regulations in respect of any homes constructed by the home builder
• discharge any actual or contingent liability that the home builder has incurred to the housing consumer or to the NHBRC
• pay the NHBRC any amount due to it whether it fell due before or after the effective date of the non-renewal or withdrawal

Home Builder's Obligations

Legal basis for obligations

Home builder's shall comply with their obligations to their housing consumers in terms of the Housing Consumer's Protection Measures
Act, 1998.

Obligations

Home builder's obligations to housing consumers are to:

• Conclude a written agreement for the construction or sale of any new home.
  A written agreement shall:
  • be signed by both parties
  • set out all the material terms including the financial obligations of the housing consumer
  • have attached as an annexure, the specifications for materials and plans reflecting the dimensions and measures of the home.
• Ensure the home builder does not demand or receive from the housing consumer:
  • any deposit until a written agreement as outlined above has been concluded.
  • any other payment until such time as he or she has enrolled the home with the NHBRC.
• Honour the deemed warranties to the housing consumer in relation to the construction of the home. These deemed warranties are that the home
  • is or shall be built in a workmanlike manner
  • is or shall be fit for habitation
  • is or shall be built in accordance with the NHBRC Technical Requirements and the terms, plans and specifications of the agreement.
• Honour the post-occupation warranties to:
  • rectify any major structural defect caused by non-compliance with the NHBRC Technical Requirements notified to him or her within a period of not more than five years.
  • repair any roof leak attributable to the workmanship, design or material occurring and notified to him within a period of not more than one year.
  • rectify any non-compliance with the terms, plans and specifications of the agreement or any deficiency related to design, workmanship or material occurring and notified to him or her within a period of not more than three months.

Other obligations

In addition to the above, the other main obligations of a registered home builder include:

• Ensuring that all new homes sold or constructed are enrolled with the NHBRC fifteen days before construction begins
• Building in compliance with the NHBRC Technical Requirements and the Home Building Manual
• Responding positively to advice provided by the NHBRC Inspectorate
• responding promptly to complaints notified by the Housing Consumer or the NHBRC.

Notifying the NHBRC of changes

A home builder shall immediately notify the NHBRC if he or she:

• changes the address, office premises, telephone or telefax numbers registered with the NHBRC
• ceases trading or resolves to do so
• is a sole trader and any person acquires a financial interest in the home builder
• is a partnership and there is a change in the composition of the partnership
• is a company and there is a change in the board of directors or any person acquires more than ten percent of the issued shares of the company.
• is a close corporation and there is a change in the membership of the close corporation or the membership interest holding
• is a trust and there is any change in the composition of the board of trustees or the ultimate beneficiary, or
• is no longer in a position to meet his or her obligations under the Act.

Any notification of change must include the full name, identity number and address of any person acquiring a financial interest as well as any other information that the NHBRC may require