{"id":1376,"date":"2019-08-28T12:08:21","date_gmt":"2019-08-28T10:08:21","guid":{"rendered":"https:\/\/dotnewsconnect.co.za\/law\/?p=1376"},"modified":"2019-08-28T12:08:23","modified_gmt":"2019-08-28T10:08:23","slug":"home-builders-your-contractor-must-register-with-the-nhbrc","status":"publish","type":"post","link":"https:\/\/dotnewsconnect.co.za\/law\/2019\/home-builders-your-contractor-must-register-with-the-nhbrc\/","title":{"rendered":"Home Builders \u2013 Your Contractor Must Register with the NHBRC"},"content":{"rendered":"\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\u201c\u2026the Act is consumer-protection legislation designed to offer protection against incompetent builders and the construction of homes having structural defects\u201d (extract from judgment below)<\/p><\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">In order to promote housing consumer rights, home builders (including residential property developers and builder\/contractors \u2013 an \u201cowner builder\u201d may apply for exemption) must, in terms of the Housing Consumers Protection Measures Act (\u201cthe Act\u201d) register with the NHBRC (National Home Builders Registration Council). They must also enrol houses they build with the Council, and pay an enrolment fee &#8211; which, as we shall see below, can be substantial.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Failure to comply is a serious matter for builders \u2013 it\u2019s not only a criminal offence (with penalties of a R25k fine or a year\u2019s imprisonment) but it means no payment can be claimed for work done.&nbsp;<strong>In other words you could be fined\/jailed as well as lose your right to payment.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Two recent SCA (Supreme Court of Appeal) cases deal with specific types of home builder but they provide a timely reminder to&nbsp;<strong>all<\/strong>&nbsp;builders, big and small, of the need to comply with the Act.<\/p>\n\n\n\n<h6 class=\"wp-block-heading\">Trusts \u2013 must you register?<\/h6>\n\n\n\n<ul class=\"wp-block-list\"><li>The first case dealt with a trust which was building a sectional title housing development.\u00a0<\/li><li>It failed to renew its original registration and then refused to comply with non-compliance notices served on it.<\/li><li>It argued that it was not a \u201cperson\u201d and therefore did not fall under the Act.\u00a0<\/li><li>The SCA was having none of that, saying that the question was not whether a trust is a \u201cperson\u201d but whether it fell under the Act. Commenting that \u201cTo exclude trusts from the ambit of the Act would result in a consequence which is arbitrary and unjust\u201d, it declared that trusts must indeed register.<\/li><\/ul>\n\n\n\n<h6 class=\"wp-block-heading\">What about \u201cbuild to let\u201d developers?<\/h6>\n\n\n\n<ul class=\"wp-block-list\"><li>In the second case, the developer\/builder of a property development comprising shops and 223 residential apartments refused to pay the (over R1.5m) enrolment fee required by the NHBRC.<\/li><li>Saying that it planned to rent the apartments out to tenants, and had no intention of selling them or developing them in terms of a sectional title scheme, the developer argued that it was itself the \u201ceffective end user\u201d of the apartments and therefore it was \u201cabsurd to expect it to insure against itself\u201d.\u00a0<\/li><li>Eventually however the developer paid the fee under protest, and then successfully applied to the High Court for an order that it was not obliged to comply with the Act\u2019s enrolment provisions.<\/li><li>On appeal however the SCA held that the enrolment provision of the Act \u201cdoes apply to homes being built for lease and rental purposes\u201d. It also rejected the developer\u2019s alternative argument that the requirement was \u201cunconstitutional, unlawful and invalid\u201d because it was irrational to expect the developer to \u201cinsure itself against itself\u201d.\u00a0<\/li><\/ul>\n\n\n\n<h6 class=\"wp-block-heading\">To register and enrol, or not to register and enrol?<\/h6>\n\n\n\n<p class=\"wp-block-paragraph\">There are some exceptions to the Act\u2019s application, and \u201cowner builders\u201d can apply for exemption. But there are grey areas here and our courts have signaled a willingness to interpret the Act as having a wide reach. As we have seen, the penalties for getting this wrong are substantial so if you aren\u2019t 100% sure where you stand, specific legal advice is a no-brainer! <\/p>\n\n\n\n<p style=\"font-size:12px;margin-top:40px\"><strong>Disclaimer:<\/strong> The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.<\/p><p style=\"font-size: 12px;color: #ccc;text-align: right\">\u00a9 LawDotNews<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u201c\u2026the Act is consumer-protection legislation designed to offer protection against incompetent builders and the construction of homes having structural defects\u201d (extract from judgment below) In order to promote housing consumer rights, home builders (including residential property developers and builder\/contractors \u2013 an \u201cowner builder\u201d may apply for exemption) must, in terms of the Housing Consumers Protection [&hellip;]<\/p>\n","protected":false},"author":101014,"featured_media":1377,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[6],"tags":[],"class_list":["post-1376","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Home Builders \u2013 Your Contractor Must Register with the NHBRC &#8226; 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