Builders face huge fines for sloppy work

Home building contractors may face fines of up to R1 million per unit for substandard work if the Housing Consumer Protection Bill is enacted.

The Bill was published for public comment in the Government Gazette at the end of August. Stakeholders have until the end of October to submit comment.

It would replace the current Housing Consumers Protection Measures Act, in terms of which the National Home Builders Registration Council (NHBRC) registers home builders and home-building projects, and provides protection against substandard work via a guarantee fund.

The NHBRC’s mandate is being extended in the Bill to include new building projects, additions, alterations, renovations and repair work, if it is of such a nature that the local authority requires approved plans.

Institutional housing like hospitals, prisons, old-age homes and subsidised housing is also covered.

Home builders and developers are required to register.

As such, the register will include grading, much like that of the Construction Industry Development Board, which grades construction companies according to financial and technical capacity and links a maximum project value to each grade.

If a home builder fails to complete a project within the agreed time, the consumer may report this to the NHBRC and it could affect the builder’s grading.

Currently, a building is covered for five years and the roof for one year under the NHBRC’s guarantee scheme.

If the Bill is adopted, the minister of human settlements may extend the main guarantee period.

The roof guarantee will extend to two years, says NHBRC head of legal services and compliance Julia Motapola.

“Some consumers have been saying there is no guarantee of rain within a year in our dry country. Therefore, we have proposed the extension to two years, to ensure the roof is at least tested by rainfall.”

Currently the NHBRC can impose a R25 000 maximum fine on non-compliant builders. The Bill seeks to increase that to 10% of the project value, to the maximum of R1 million per housing unit, or the full cost of repairs necessitated by the bad craftsmanship.

A proposal that concerns developers is that the executive committee member or provincial government may not release funds for subsidised housing unless the Act’s requirements are met.

– Moneyweb