President Ramaphosa Signs Housing Consumer Protection Bill to Safeguard Buyers

The legislation enhances consumer safeguards, streamlines industry regulation, and supports emerging players in the construction market.

President Cyril Ramaphosa has signed the Housing Consumer Protection Bill into law, introducing robust measures to protect homebuyers and foster greater inclusivity in the homebuilding sector. The legislation enhances consumer safeguards, streamlines industry regulation, and supports emerging players in the construction market.

The new law replaces the Housing Consumers Protection Measures Act of 1998, addressing gaps and challenges previously identified by the Department of Human Settlements and the National Home Builders Registration Council (NHBRC). Key provisions include:

• Enhanced regulatory mechanisms to protect housing consumers.
• Tougher enforcement measures, including penalties to deter non-compliance by homebuilders.
• Clear accountability rules for members, directors, or trustees of homebuilding entities.

The legislation also outlines new duties for estate agents, financial institutions, and conveyancers, along with codes of conduct for industry stakeholders.

Comprehensive Industry Coverage

The law applies to both professional homebuilders and owner-builders, who are now required to register with the NHBRC. It further mandates:

• Pre-construction enrolment of homes with the NHBRC to ensure compliance and quality assurance.
• Oversight of repairs, renovations, alterations, and extensions to existing homes under the council’s regulatory framework.
• Specific duties for housing authorities and subsidy housing agents to adhere to regulatory requirements, particularly in subsidy housing projects.

Failure to comply with these obligations carries significant consequences, reinforcing accountability across the sector.

Promoting Economic Transformation

Beyond consumer protection, the bill prioritizes economic transformation in the construction industry. Notable measures include:

• Provisions for using surplus from the NHBRC warranty fund to support developmental programs aimed at upskilling and empowering small-scale and emerging homebuilders.
• Contractual safeguards to foster sustainability for new entrants into the market, addressing systemic barriers and ensuring equitable participation in the industry.

The warranty fund itself serves as a critical safety net for consumers, covering major structural defects reported by homeowners.

Implications for the Housing Market

The Housing Consumer Protection Bill is expected to bring much-needed stability to South Africa’s housing sector by reinforcing quality standards, improving accountability, and opening doors for smaller, previously excluded players.

This law represents a significant milestone in advancing the interests of homebuyers while laying the groundwork for a more inclusive and competitive homebuilding industry.