The former Chief Executive of the National Home Builders Registration Council has been found guilty of three charges of financial misconduct and corruption and has been removed from his post. As yet, however, says Paul Henry, Managing Director of Rawson Developers, there has been no indication of how much money was lost. The suspicion is that, as the NHBRC is known to be sitting on very large sums of money, the sum lost could be very big indeed.
All this, said Henry, has been brought to a head yet again by the countrywide dissatisfaction among builders, developers and homebuilders with the way that the NHBRC is - or is not - fulfilling its role.
“The organization,” he said, “is fast gaining a reputation for failing to carry out its mandate to compensate homeowners, who need serious remedial work on their homes, and whose builders have not responded to the NHBRC’s instructions and threats. The organization is generally considered not to have done this – nor has it provided the expected supervision on low cost housing.”
Recapping on the background to the NHBRC, Henry said that it had originally been established mainly to protect new homeowners of affordable or low cost/RDP housing.
In many cases, he said, after taking transfer, these owners would discover that their homes were developing serious structural, waterproofing and other problems for which the builders were often unable - or unwilling - to be held responsible.
The NHBRC was authorized to put pressure on such builders to carry out their required remedial work and, if they subsequently ‘disappeared’ or went into liquidation (as quite frequently happened), the NHBRC was supposed then to pay for the remedial work from its safety net funds. These funds were gathered by collecting a 1,3% levy on the contracts, paid by the homeowner, of every home built - the Act was “given teeth” by the government instructing banks not to give home loans to any building operation where the builder was not NHBRC registered.
“It goes without saying,” said Henry, “that in a relatively short space of time the NHBRC funds grew astronomically and they are still growing.”
Just how serious the NHBRC’s failure to supervise low cost operations has become, said Henry, can be gained from the fact that Tokyo Sexwale, now Minister for Human Settlements, had to ask for R1,4 million to rectify badly built low cost houses in his 2010 budget speech. The NHBRC responded to this, in its usual way, by affirming that it was still “reviewing” some 40 projects in KwaZulu-Natal and the Eastern Cape and gave its assurance that non-registered builders were “given no room” to break the law.
“If what the NHBRC said was true,” said Henry, “how was it that these unregistered builders and developers were given permission to complete these homes in the first place? I simply do not understand how thousands of badly built houses could slip through the net, leaving the taxpayers to pick up the huge repair costs.”
Henry added that, as has happened so often in South Africa, it is the poorest of the poor who have been made to suffer: they have to live for years in malfunctioning houses with reduced resale values.
Henry also commented too that the NHBRC is “totally unnecessary” when it comes to dealing with established developers and builders with first world qualifications.
“Such builders and developers,” he said, “very seldom make serious mistakes, but if they do they are covered by their own insurance and/or by that of the professionals who designed the building, who are also forced by law to take out insurance. If a fault arises, the owner can claim, if necessary, through the law courts for compensation, and if his case is proved he will receive it.”
