Sipho Mashinini, chief executive of the National Home Builders Registration Council (NHBRC – established mainly to protect new homeowners of affordable or low cost/RDP housing) has been found guilty of three charges of financial misconduct and corruption, and has been removed from his post. As yet, however, there has been no indication of how much money has been lost.
The NHBRC has gained 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 organisation’s instructions and threats. However, in many cases, after taking transfer, 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 is authorised to put pressure on builders to carry out their required remedial work and, if they subsequently disappear or go into liquidation, the NHBRC is supposed to pay for the remedial work from its safety net funds. According to legislation, these funds are gathered by collecting from homeowners a 1.3% levy on the contracts of every home built. The Act was given teeth by government instructing banks not to give home loans to any building operation where the builder is not NHBRC registered.
Just how serious the NHBRC’s failure to supervise low-cost operations has become can be gained from the fact that Tokyo Sexwale, Minister for Human Settlements, in his 2010 budget speech asked for R1.4-million to rectify badly built low cost houses.