Do properties constructed solely to rent fall within the ambit of the Housing Consumers Protection Measures Act 95 of 1998 (“the Act”)?

In a recent appeal before the Supreme Court, the court was asked to pronounce on the applicability of the Act to homes constructed for the purposes of letting (as opposed to sale).

The builder in this matter, a registered NHBRC home builder, contended that it had built a home to be rented out and therefore that section 14 of the Act did not apply to it. Section 14 requires home builder to pay an enrollment fee exceeding R 1.5 million, and to enroll the property development with the NHBRC.

The NHBRC contented that the builder was subject to the Act.

The Court held that –

the purposes of the Act, and the sections in question, are to guard against builders constructing sub-standard homes – regardless the type of property. In 2008, there was an amendment to the Act which broadened its scope of application to include properties constructed for the purpose of renting;
there was no reason to find that the legislature had intended a different application of the Act to properties constructed solely for renting and those constructed for sale.
Protection against sub-standard developments or incompetent builders is not only afforded to those who purchase properties but also to those who rent them.