The Housing Consumer Protection Act replaces the Housing Consumers Protection Measures Act, 1998, and introduces a stronger regulatory framework aimed at protecting housing consumers and promoting compliance within the home-building industry. This article examines the Act’s implications for property practitioners, particularly when acting as intermediaries in property transactions.

A Broader Regulatory Framework
The Act extends to the regulation of building activities, including renovations and alterations, to ensure that homes meet the required technical standards. Property practitioners play a role in supporting compliance by verifying the enrolment and registration of homes and builders.

This aligns with the Act’s broader aim of protecting housing consumers against defective construction and unscrupulous practices.

Although the Act has been signed into law by the President, the Minister of Human Settlements must still proclaim its commencement date in the Government Gazette.

Duties of Property Practitioners
Section 81 of the Housing Consumer Protection Act sets out the duties of property practitioners:

(1) A property practitioner must, before becoming involved in the sale of a home in his or her capacity as a property practitioner, take reasonable steps to determine whether that sale relates to a home which has to be enrolled in terms of Chapter IV, or which is covered by the home warranty fund.

(2) The property practitioner referred to in subsection (1) must, in the case where the sale relates to a home contemplated in subsection (1), determine whether the home concerned is enrolled in terms of Chapter IV.

(3) If that home has not been enrolled in terms of Chapter IV, the property practitioner concerned must—
(a) notify the Council accordingly; and
(b) inform any prospective buyer that the home concerned has not been so enrolled, and of the consequences of that failure.

(4) The Council may report a property practitioner who fails to comply with this section to the Property Practitioners Regulatory Authority, established under section 5 of the Property Practitioners Act 22 of 2019.

What This Means in Practice
In practice, property practitioners are assigned a gatekeeping and disclosure function at the point of sale.

This function is confined to a compliance step that property practitioners must incorporate into their standard operating procedures when handling the sale of a home where Chapter IV enrolment or home warranty fund coverage may apply.

Once the Act commences, a property practitioner involved in the sale of a property on which a home, as defined in the Act, was built or building work was carried out must take reasonable steps to determine whether the property is enrolled in terms of Chapter IV or covered by the home warranty.

This will apply where the home or building work was completed less than five years and 90 days before the sale, calculated from the date on which the final inspection was carried out, being the maximum warranty period.

When a Home Has Not Been Enrolled
If the home has not been enrolled, the property practitioner must:

(a) notify the Council; and
(b) inform any prospective buyer that the home has not been enrolled and explain the consequences of that failure.

The property practitioner must therefore do more than simply identify that the home has not been enrolled. The non-enrolment must be reported, and prospective buyers must be properly informed.

The Consequences of Non-Compliance
The Housing Consumer Protection Act imposes specific duties on property practitioners to support compliance with the enrolment and registration requirements applying to homes and builders. These obligations are integral to the Act’s goal of safeguarding housing consumers and maintaining standards within the industry.

Property practitioners who fail to comply with the Act’s requirements may face penalties, including administrative fines. The Council has the authority to issue compliance notices and impose fines for non-compliance.

These measures highlight the importance of property practitioners understanding and meeting their obligations under the Act to avoid legal and financial consequences.

Reference List: 
The Housing Consumer Protection Act 25 of 2024


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