New challenges for property developers
The new National Home Builders Registration Council’s (NHBRC) code of conduct is creating havoc under property developers. NHBRC is a council set up by government to protect the interest of housing consumers and regulate the home building industry. It has a new code of conduct that appears to favour property consumers.
The South African Property Owners Association (SAPOA) says that the code of conduct has widespread repercussions for our industry and will affect all residential property developers and consumers. SAPOA represents the commercial and industrial property industry.
The members of SAPOA are affected by the new code of conduct because of the following changes made by the NHBRC:
- Any deposit paid may only be used for payment of labour and materials with the result that if the consumer defaults in some way, the homebuilder’s remedy of using the deposit to cover their damages has been negated
- That a homebuilder shall not demand payment form a housing consumer of more than 10% of the contract price of a fixed cost building contract and may not demand a deposit of more than 10% of the contract price
- That a homebuilder must give a consumer 30 calendar days to examine a contract before requiring them to sign it.
SAPOA feels that they cannot accept the far-reaching changes that the NHBRC are putting in place, which override certain existing legislation governing the industry. An example of one such legislation is the Alienation of Land Act which provides what is required in a contract relating to the sale of immovable property. The clauses of the new code of conduct conflicts with the Alienation of Land Act.
SAPOA has requested an urgent meeting with the NHBRC regarding the new code of conduct.
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