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NHBRC responses

9 October 2008

Salomé van Wyk of Millers

I have the following response to Roelie Rossouw's article:

I do not think there is a risk of not complying. The compliance departments of the various banks are so strict that it is impossible to fail to comply. The risk is rather in the loss of the bond due to the limitations in the Act. One of the main limitations is that once the house is built and no NHBRC certificate was issued to the builder and the house was not enrolled with the NHBRC then the NHBRC will not issue a certificate. I am not so sure that this is a limitation in the Act, but rather an administrative bureaucratic limitation with the NHBRC themselves. This is unfair to future buyers who need finance with a mortgage bond. Surely a house could have been built perfectly without the certificates, but due to the limitation a future buyer cannot buy if he is financed with a mortgage bond. I am of the opinion that the Act or regulations or the rules of the NHBRC should be amended to make provision for the owner of a house to obtain the necessary certificates at any time. The conditions to obtain such certificates after the fact should be strict including for example an engineers report or something similar to confirm that the house complies with certain standards.

and

Dana Van Zyl

Section 18(1) contains a blanket prohibition against financial institutions financing the acquisition of a property from a home-builder, unless the home builder is registered and the home is duly enrolled.

The NHBRC warranties in favour of the housing consumer expire after 5 years (Section 13)
In light of Section 18(1), wherein no exceptions are entertained, may a financial institution lend money to a purchaser if the purchaser is purchasing a house that was built after the Act came into operation, is now more than 5 years old but was never enrolled in terms of the Act? To put it differently, is a so-called owner-builder forever limited to selling his home to only cash buyers?

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