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Monday Jul 31, 2017

NHBRC faces criticism

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 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 CEO and three of the entity's executives based on information contained in the report submitted to council by the investigating team.

The preliminary report indicates that 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 disciplinary action was taken against any of the executives at this point in time. 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 this year, KPMG was appointed to look into large contracts dating between 2011 and 2012 era, 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 NHBRCÂ… 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."

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 the amendments to this legislation are premised on supporting organisational strategic initiatives which ultimately are for the benefit of improving our customer service and empowering home builders. The draft bill was recommended by the state law advisor to proceed to the next 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 service they're paying for, it's not enough to appease a public, who view registration as yet another gripe purchase or worse.

Readers' letters:

  • How can they expect me to move into an unsafe house?

    I am currently building a house and had a few issues with my builder, so I contacted the National Home Builders Registration Council (NHBRC) as my house was registered with them for the building process.

    One of the main issues was the construction of the roof. It has leaks and, after getting an independent roof company to have a look, it has been noted that it is structurally unstable.

    The NHBRC has issued e-mails and letters to the builder but has not received any response from him.

    The house is now at the final stage and I have a completed roof that is structurally defective.

    If the NHBRC has taken the responsibility to oversee the building process and make sure the house is built to their standards, how did they allow it to get to this stage without picking up major structural defects?

    I contacted them and asked if they will repair the roof as it was covered by their insurance. I was told 'no, the NHBRC insurance only covers the consumer after occupation'.

    Is there a waiver in place for this type of situation? I can't move into a house that is not safe. I find it to be gross negligence on the part of the NHBRC as I paid them for a service which they did not carry out correctly.

    So why have NHBRC inspectors? I paid R32 000 upfront to the NHBRC so they could oversee the build.

    I was issued with a certificate indicating that the house was insured for R4.8 million. Now I'm told they only help after occupation. This is a total ripoff. My latest response from the NHBRC was that they have taken action against the contractor, but this doesn't help me as I still have a roof that's defective. I've been quoted R120 000 to repair it.

    To ensure my home was built according to proper standards and specification, I utilised the services of NHBRC oversight, as I believed I would have the umbrella body of builders overseeing the construction of my home.

    I'm told by an NHBRC representative that the only time I may lodge a complaint and claim compensation is once my family occupies the home. In accordance with this requirement, my family and I are expected to occupy a home with a severely defective roof. In essence, I am required to put the lives of my family in danger in order to lodge a claim! This defies all logic. It's unacceptable. The oversight was at all material times conducted by an NHBRC inspector.

    I'm now forced to rectify issues that should have been dealt with by the inspector. First, they tell me they can't help as I needed to be living in the house in order for the insurance to kick in. Now it's "we can't use money from the funds if you fixed it yourself ". What is the real answer? Why did the inspector not pick up the faults?

    These were major faults. Lives could have been lost. I am just going to complete the house by myself. I don't have the time and money to waste on this. Anesh Rambalie

    NHBRC spokesperson Tshepo Nkosi said: "The matter of the errant home builder is being addressed within the legal processes, as set out in the Housing Consumers Protection Act and it is anticipated that the process will be finalised within 120 days. The onus is on Mr Rambalie to wait for this process to unfold.

    "Should Mr Rambalie elect to appoint a new builder to finish his house, it is imperative that the NHBRC is formally informed as this will have a direct impact on his Warranty Fund cover. This is done so that the new builder takes over all liabilities for the completed house."

  • I'm financially ruined by their lack of service

    My story is complicated but essentially I've been financially ruined by a builder and the NHBRC.

    They obviously did not do their quality inspections, as I don't even have real drains, the geyser isn't earthed, etc.

    They did not even go through the mediation process. I am the single mother of a 4-year-old (her father is dead).

    In my case, we did follow the NHBRC's processes. I completed the form and everything that was required, but nothing was done. They only contacted the builder after the Public Protector contacted them, almost five months after my complaint.

    I was left to do heavy lifting, measuring of incorrectly measured rooms, etc, with no assistance whatsoever.

    The Public Protector has now told me, because the NHBRC acknowledges the fact that the wrong process was followed and they need to do it correctly, the office can't do anything until they've had the final decision from the NHBRC.

    Once you got me the meeting with the NHBRC they are using it to tell me we now have to wait.

    Also apparently the only outcome for me would be a fine paid over from the builder who will definitely not pay as he has no money. Throughout most of this process I was comfortable with the fact that any issues would be picked up during the "quality inspections".

    Once I realised things kept going wrong and the builder wasn't doing anything correctly, I filled in the form on the NHBRC website and never got feedback.

    The house was not built to industry standards, from the foundation up.

    There's no electricity compliance and no proper plumbing, skew walls, the ground level is too high, the breather holes are fake etc.

    We are now at this point where it is proven that they never bothered to complete the process with me correctly, despite all my begging and pointing out the damage. They have yet to provide proof of their "quality inspections" but the provincial head told me they can't do that for every house. Yet they didn't halt the build at any stage.

    C van den Berg

    Nkosi said: "The NHBRC provincial manager has met with Ms Van den Berg and will continue to meet with her until the matter is brought to conclusion. Morton Construction has been suspended for failure to enrol Ms Van Den Berg's home.

    The disciplinary hearing is scheduled for next month. The NHBRC's engineer who initially assessed the house found that there were no structural defects, as such Van den Berg cannot seek direct recourse from the NHBRC Warranty Fund for financial relief, since the problems identified are not structural; and contractual in nature.

    However, following concerns of structural integrity related to the private drainage, the NHBRC has requested the engineer to review his initial findings in order to confirm whether this can lead to structural failure or not.

    The NHBRC has advised Van den Berg to lodge a complaint in order for the NHBRC to conduct conciliation between her and the home builder. She is also advised to pursue civil litigation against Morton Construction for remedy and relief on contractual matters or sundry expenses that she has incurred."

    Georgie: The builder had to be traced by a private investigator and appears not to have the means to pay Van den Berg, or effect repairs. *Names changed for professional reasons.

    Ask Georgie

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