NHBRC ‘suspends’ four executives
Dogged by inefficiency, complaints, allegations of corruption and scathing findings by the auditorgeneral, the National Home Builders Registration Council has been forced to institute a forensic investigation and suspend implicated council members
IT STARTED out as most things do: with the very best of intentions and with the hallmarks of making a real difference.
A national building association would be set up to protect housing consumers from unscrupulous and inept builders and the “bakkie brigade” by professionalising the industry and making registration a legal requirement.
In 1998, the National Home Builders Registration Council was established by the Housing Consumers Protection Measures Act, requiring builders to be accredited to ensure best building practice.
The council would test builders to determine competency, train those that weren’t and conduct professional inspections, at various stages, to protect both consumer and builder.
Consumers who wanted to build new homes would have to register their homes with the council, pay a percentage of the value of their homes over as “insurance”, and only use NHBRC-approved builders.
Banks would be legally cajoled into the scheme by insisting on NHBRC registration before granting bonds.
Almost 20 years later, the NHBRC is dogged by charges of inefficiency and criticism.
On this page is a taste of some of these complaints (I’ve yet to receive compliments about the service).
Earlier this month, the council quietly removed four of its top executives from office.
NHBRC spokesperson Tshepo Nkosi explained: “During a special sitting on July 4, 2017, council resolved to place on precautionary suspension, the acting chief executive and three of the entity’s executives, based on information con- tained in the report submitted to council by the investigating team.
“The preliminary report indicates there was contravention of internal procedures and irregular employee appointments. These investigations were instituted by the council as part of ongoing efforts to improve the entity’s performance and customer service, as it carries out its legislated mandate and oversight role.”
Another council member, Xoliswa Daku, was appointed acting chief executive.
“The four executives were placed on precautionary suspension in order to allow the council-appointed, independent investigation to unfold without any interference. Since the matter is not yet resolved, the NHBRC would not wish to divulge further details that may prejudice its employees before the conclusion of such investigations, and no disci- plinary action has been taken against any of the executives at this point. A final investigation report is expected by the end of July, and this will be followed by due process within 60 days, as legislated.”
In February, KPMG was appointed to look into large contracts dating between 2011 and 2012, which resulted in the NHBRC incurring over R500 million in irregular expenditure, as reported by the auditor-general, Nkosi told me.
That forensic investigation is expected to be completed next February.
The DA’s spokesperson on Human Settlements, Solly Malatsi, told me he put questions to Housing Minister Lindiwe Sisulu in March, after the party’s investigations team received a tip-off from a whistle-blower about malfeasance at the council. No response has been received to date.
Her spokesperson, Ndivhuwo Mabaya, refused to be drawn on the matter, commenting: “The minister and the DG are not involved in the day-to-day running of the NHBRC… I am sure the minister will engage Parliament.”
The council’s warranty fund stands at R5.8 billion, with R1.6bn in liabilities.
In the past financial year, it paid out just R8 073 503 to consumers, who are legally obliged to pay it 1.3% of the value of every new home.
The NHBRC’s legislative role is to:
(a) Represent the interests of housing consumers by providing warranty protection against defects in new homes.
(b) Regulate the home building industry.
(c) Provide protection to housing consumers in respect of the failure of home builders to comply with their obligations in terms of this act.
(d) Establish and promote ethical and technical standards in the home building industry.
( e) Improve structural quality in the interests of housing consumers and the home building industry.
(f) Promote housing consumer rights and provide housing consumer information.
(g) Communicate with and assist home builders to register in terms of this act.
(h) Assist home builders, through training and inspection, to achieve and maintain satisfactory technical standards of home building.
Yet housing consumers complain they’re paying 1.3% for no service, inspectors who are not up to the task, and having to fight to get anything out of the fund, which they can’t access until they’ve been issued occupation certificates.
The fund only covers structural issues – it doesn’t cover boundary walls, swimming pools and anything unrelated to the main house.
“They’re supposed to be the technical middle-man between the builder and the homeowner, who pays handsomely for ‘expertise’. In practice, it doesn’t work that way,” Shane Power, an independent contractor told me.
“The inspectors are often technically clueless; they side with the builder as they don’t know what they’re doing. A number of years ago, I was at mediation in Clearwater, Roodepoort – the homeowner had to fetch the inspector as he didn’t have a car. Then the inspector asked me what to do about a simple leak, but the builder wanted a ‘quick, cheap but not lasting fix’, which was not in the homeowner’s interests.
“I told the builder: why do a patch job? Do the job right – first time. It shouldn’t be up to the homeowner to do maintenance because the builder didn’t do his job. This didn’t go down well. In the end, the inspector sided with the builder because he decided ‘reasonable measures’ were proposed to rectify the problem. And the homeowner got a raw deal.”
Time for change
Nkosi admits work needs to be done to improve service, and legislative change is needed.
“We are in the process of reviewing our act. The NHBRC was established by the Housing Consumer Measures Act 95 of 1998, therefore the primary aim of this legislative review is to update and contribute to elevating the NHBRC’s role as a world-class regulator and guardian of housing consumer rights.
“A majority of amendments to this legislation are premised on supporting organisational strategic initiatives, which ultimately are for the benefit of THE dust must now have settled on this NHBRC issue. I hope so.
As an engineer, I am registered with them and I often wonder about the insurance of the asset, being a house. Their service is, in fact, the provision of insurance to the home owner.
Furthermore, the financier, a bank, normally insists on insurance of the asset. improving our customer service and empowering home builders. The draft bill was recommended by the state law adviser to proceed to the next That is two insurances.
To put the cherry on the cake, the engineer has to have professional insurance at all times. Three times, then. If you add the builder’s insurance, it comes to four.
The law says you can’t have an asset insured more than once, not so? The NHBRC clearly says it doesn’t entertain any claim of more than R500 000. So what happens if a level.” Aspiring to “world-class standards”, is much like Jozi punting itself as a “world-class African city”. Until consumers see change and actually get the R5-million home starts cracking?
They go for us, the engineers. We have to show that we have exercised our duty of care. So do the banks. The owner goes in circles and one insurer blames another.
The banks play the game by insisting that you enrol with the NHBRC, otherwise no loan. REINHARDT SMITH service they’re paying for, it’s not enough to appease a public who view registration as yet another grudge purchase, or worse.
A worker walks on scaffolding at the construction site of a new home in this 2014 file picture. The NHBRC, specifically set up to regulate and improve the building industry, has proved to itself be an obstacle in the experience of many homeowners.