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

Daily News - - ASK GEORGIE -

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.”

Hand­some re­turns

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.

Lousy deal

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.

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