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ConCourt ruling protects tenants

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All developers must build in line with building standards

A recent Constitutional Court judgment has made it clear that homes being built for rental purposes are to be listed with the National Home Builders Registration Council (NHBRC).

This comes after the Constitutional Court recently dismissed, with costs, an application for leave to appeal by rental market developer against a Supreme Court of Appeal ruling.

The council has welcomed the ruling as it vindicates the council mandate against developers and builders who do not adhere to building standards and the law, says council acting chief executive Otsile Maseng.

“This matter had huge implications for people who rely on the rental market for a home, as it meant that home builders who built for this market were not required to abide with the law that governs the home-building industry.”

The Housing Consumers Protection Measures Act 95 of 1998 says all new homes must be enrolled with the NHBRC 15 days before construction. Home enrolment covers consumers against poor building practices and permits the council to conduct building inspections at key stages of construction.

Maseng says a newly enrolled home can be subject to a minimum of four and a maximum of eight inspections.

This Constitutional Court judgment follows an appeal case whereby the developer Xantha Properties 18 applied for an order declaring that they were not required to enrol homes constructed solely for renting and not to be sold to third parties. It also wanted such a requirement to be declared unconstitutional, unlawful and invalid.

“This matter started in 2017, when Xantha approached the council and contended that 223 rental homes, which they were constructing in Wynberg in Cape Town, need not be enrolled with the NHBRC, as Xantha did not intend to sell the homes to third parties. The council disagreed with Xantha and informed them that all homes constructed for leasing or rental purposes had to be enrolled in terms of the act.

“Subsequently, Xantha enrolled the homes under protest and brought a high court application seeking a declaration that Xantha is not required to enrol the homes. (Alternately, it challenged) the constitutionality of the relevant provisions of the act, if the court agreed with the interpretation that Xantha was obliged to enrol the homes.”

The Western Cape High Court ruled in favour of Xantha but its judgment was overturned in favour of the council by the Supreme Court of Appeal, which led to Xantha approaching the Constitutional Court.

Maseng says the Constitutional Court’s dismissal of Xantha’s application for leave to appeal means all home builders who intend to build rental homes are obliged to enrol the homes as per the act, regardless of whether or not they intend to sell the homes in future.

It also ruled the council must continue to enforce the act.

“We vigorously pursued this case as the prospects of Xantha’s success would have had the effect of undermining the objects of the act or its effectiveness to regulate the home building industry and to protect housing consumers,” he says.

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