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Don't lose defect cover

17 January 2013

If one of your New Year’s Resolutions is to build your own dream home, know that you have strong statutory protections against poor workmanship and structural failure. But you will lose them if you don’t ensure that both

  1. Your builder is (as required by law) registered with the NHBRC (National Home Builder's Registration Council), and that his/her registration is current and not suspended, expired or de-registered; and
  2. You have received, before building commences, a “certificate of proof of enrolment” confirming that your home has been “enrolled” by the Council.

Your rights
Next, have your building contract drawn or checked professionally with reference to the technical standards in the NHBRC’s “Home Building Manual”, and with reference to the warranties implied by law into your contract. In general terms, these warranties are that your home will be: -

  • Constructed in a “workmanlike manner”, and
  • Fit for habitation, and
  • Constructed in accordance with NHBRC Technical Requirements, plans, specifications etc.

Your remedies
Give immediate notice to the builder to rectify any problems – snags, deviations from plan, “deficiency related to design, workmanship or material” etc. Your general time limit for this is 3 months after occupation, but extended time periods apply to

  1. Any “major structural defect” which manifests within 5 years of occupation and results from non-compliance with the Council’s Technical Requirements, and
  2. Any roof leak “attributable to workmanship, design or materials” which manifests within 12 months of occupation.

(Note that you can specify longer warranty periods in your building contract – the above are minimum periods set by law.)

If problems aren’t remedied after you report them, your first claim is against the builder. The Council should assist you in this via its complaints, conciliation and disciplinary procedures.

Can you claim direct from the NHBRC?
What happens if your builder refuses to (or cannot) comply with your demand for rectification? With the downturn in the construction industry it is a hard fact that many construction firms have failed, or will fail, leaving you with a worthless monetary claim and a defective house. The good news here is that you have a backup claim against the NHBRC’s warranty fund – but, unfortunately, only for major structural defects or roof leaks manifesting as above.

What is “a major structural defect?”
The formal definition is this: “A defect which gives rise or which is likely to give rise to damage of such severity that it affects or is likely to affect the structural integrity of a home and which requires complete or partial rebuilding of the home or extensive repair work to it, subject to the limitations, qualifications or exclusions that may be prescribed by the Minister”.

That’s quite a mouthful, but a recent High Court judgment provides a practical illustration. The home in that case had – within a year - developed severe cracking in the concrete floor slab. A structural engineer called in by the home owner reported that the cracks were structural in nature, but the NHBRC rejected the owner’s claim because its own expert (another structural engineer) concluded that the cracks were not structural but rather caused by shrinkage resulting from poor workmanship when the slab was poured.

The Court, having analysed both experts’ reports and evidence, held that the defects resulted from “a failure of the substructure of the house” and were thus structural in nature. As they were also clearly “major” defects as defined, the Court ordered the NHBRC to rectify them.

The limits
The NHBRC in rectifying such defects is only empowered to spend a maximum of R500,000 (or an amount equal to the “selling price of the home” if it is less than that).

NOTE FOR ATTORNEYS: The judgment in Stergianos v National Home Builder Registration Council (3853/10) [2012] ZAECPEHC 76 is on Saflii at http://www.saflii.org/za/cases/ZAECPEHC/2012/76.html. The Act and “Code of Conduct for Home Builders” are available via links on the NHBRC site’s “Legal” page http://www.nhbrc.org.za/index.php/legal. Check for builder registration status and home enrolment on the NHBRC’s “Database Search” page http://www.nhbrc.org.za/index.php/search.

Jack Crook (LLB Lond, LLB Rhod) is the author of LawDotNews, a monthly newsletter which is personalised and e-mailed to your firm's clients compliments of your firm. Readers are welcome to contact Jack, or visit his web site at http://www.dotnews.co.za for further details.

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