“…the Act is consumer-protection legislation designed to offer protection against incompetent builders and the construction of homes having structural defects” (extract from judgment below)
In order to promote housing consumer rights, home builders (including residential property developers and builder/contractors – an “owner builder” may apply for exemption) must, in terms of the Housing Consumers Protection Measures Act (“the Act”) register with the NHBRC (National Home Builders Registration Council). They must also enrol houses they build with the Council, and pay an enrolment fee – which, as we shall see below, can be substantial.
Failure to comply is a serious matter for builders – it’s not only a criminal offence (with penalties of a R25k fine or a year’s imprisonment) but it means no payment can be claimed for work done. In other words you could be fined/jailed as well as lose your right to payment.
Two recent SCA (Supreme Court of Appeal) cases deal with specific types of home builder but they provide a timely reminder to all builders, big and small, of the need to comply with the Act.
Trusts – must you register?
What about “build to let” developers?
To register and enrol, or not to register and enrol?
There are some exceptions to the Act’s application, and “owner builders” can apply for exemption. But there are grey areas here and our courts have signaled a willingness to interpret the Act as having a wide reach. As we have seen, the penalties for getting this wrong are substantial so if you aren’t 100% sure where you stand, specific legal advice is a no-brainer!
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)