The NHBRC (National Home Builder's Registration Council) has been mandated by
Section 7 of the Housing Consumer Protection Measures Act 95 of 1998 to protect
consumers against unscrupulous Builders, Contractors and Developers. The new
Code of Conduct for Home Builders makes provision for the warrant against poor
workmanship, resulting in structural defects. All newly built residential
dwellings are to be enrolled with the NHBRC by:
The Builder, Developer and Homeowner need to be registered with NHBRC, as
does the dwelling, regardless of funding, whether cash or Mortgage bond. A
financial institution may not give a home loan if the above has not been
NHBRC applies to the following:
Full Title Houses
Sectional Title Flats and Gated Communities
Real Right Developments
The warranty scheme only applies to new houses built by home builders
registered with NHBRC and the enrolment provided by the registered home builder
is transferred automatically to anyone who buys the house during the 5 year
Defects and poor workmanship must be recorded formally (in writing) to the
Developer or Contractor as well as NHBRC within 3 months from date of
occupation. Roof leaks attributable to poor workmanship and materials must also
be recorded formally (in writing) to the Developer or Contractor as well as the
NHBRC within 12 months from date of occupation.
The NHBRC warranty takes effect from date of occupation by the Homeowner of the
newly built dwelling, providing that the dwelling was enrolled with NHBRC and
that the NHBRC did not issue a formal letter of non-compliance in accordance
with NHBRC technical requirements.
Significant and far reaching changes came into effect on 16th March 2007, and
have been put into place to offer more protection to the end user who is
contracting with home builders for the construction of residential homes. Dave
Warmback of Durban law firm, Shepstone and Wiley, summarises the changes as
Home building contracts may now only be concluded once the housing
consumer has had 30 Calendar days to view the contract. There are far
reaching consequences for Developer/Agent, as it could hold up the process
Restrictions on clauses in contracts, which have the effect of taking
away consumers' common law or statutory rights.
Restricting deposits to no more than 10% of contract price of a fixed
cost building contract.
Minimum clauses that must be included in a building contract, and an
obligation that a home builder must retain a copy of the contract and all
records relating thereto, for a period of at least six years;
A home builder may not accept final payment under a building contract
unless the bank, NHBRC or competent person has certified in writing that the
work has been completed according to NHBRC's prescribed minimum standards
According to Warmback, "the National Home Builders Registration Council,
acting in terms of Section 7 of the Housing Consumer Protection Measures Act 95
of 1998 ("the Act"), have drawn up and published the Code, which is intended to
provide minimum standards to be maintained by all NHBRC Home Builders."
He goes on to state, "A Home Builder is defined in the Act as a person who
carries on the business of a home builder and importantly, while the Code is no
doubt aimed to target the smaller home builder (against whom most protection is
needed for consumers), it will also be applicable to larger residential
developers, developing and selling residential dwellings, whether freehold or
sectional title. Home builders are obliged to register with NHBRC and are
obliged to enroll a particular home or development with the Council, submit
information relating to a development and pay a prescribed fee."
On the 5th April 2007 the Government Gazette published a draft of the new NHBRC
grading system, which makes provision for the establishment of grading
categories in order to encourage good building practices.
The grading system will be categorised as follows:
Responsiveness to housing consumers' complaints
Timeous enrolments of homes
Compliance with the NHBRC Technical Requirements
High quality in building homes
Changes to the above will be made as the need arises.
The Grading system will be used to determine the fees the Builder or Developer
will be charged by the NHBRC. The performance score shall be calculated in
accordance with the new formula, which can be obtained from the Government
Gazette published on 5th April (Vol. 502, number 29747).
Failure by home builders to comply with the NHBRC Code of Conduct could result
in serious consequences. The NHBRC is entitled to withdraw the registration of a
home builder found guilty of contravening the Code.
There is little doubt that consumers will be better off when the Code is adhered
to. End users will finally have recourse against home builders who are guilty of
bad building practices.
For more comprehensive information, visit the NHBRC website at