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President Cyril Ramaphosa has signed into law the Housing Consumer Protection Bill which offers greater protection for housing consumers and support for new entrants in the home building industry.

The legislation seeks to address challenges identified by the Department of Human Settlements and the National Home Builders Registration Council (NHBRC) with regard to the Housing Consumers Protection Measures Act of 1998.

The NHBRC assists and protects housing consumers from unscrupulous homebuilders who deliver substandard houses, bad workmanship and poor quality material.

The new law seeks to ensure adequate protection of housing consumers and effective regulation of the home building industry by, inter alia, strengthening the regulatory mechanisms, strengthening the protection of housing consumers, introducing effective enforcement mechanisms and prescribing appropriate penalties or sanctions to deter non-compliance by homebuilders.

The law deals with such matters as the personal liability of the members, directors or trustees of a homebuilder; duties of estate agents, financial institutions and conveyancers, and codes of conduct for NHBRC members, homebuilders, developers and other industry role players.

The law applies not only to builders who undertake home building as a business, but also owner-builders who are now required to register with the registration council.

The law also introduces the enrolment of a home prior to the commencement of its construction by a homebuilder, consequences for failure to enrol a home, duties in respect of a subsidy housing project and consequences for failure by housing authorities or subsidy housing delivery agents to follow the law.

The law applies to repairs, renovations, alterations and extensions to an existing home under the NHBRC’s regulatory regime.

The law also seeks to address the economic transformation of the building industry through the introduction of provisions relating to the warranty fund surplus, which may be used for developmental programmes for the homebuilding industry. The fund is used primarily to remedy major structural defects reported by home owners to homebuilders and the HBRC.

The law seeks to create an enabling environment for new entrants into the home building industry by introducing contractual provisions that ensure their sustainability in the market.

Issued by the Presidency