National Home Builders Registration Council
The promulgation of the Housing Consumers Protection Measures Act (Act 95 of 1998) took place in June 1999. This made the National Home Builders Registration Council (NHBRC) a statutory body, and since 1 December 1999 it is compulsory for all home builders operational in the home-building industry to be registered with the NHBRC. This act provides protection against so-called ‘fly-by-night’ builders, that is, either builders who build to an unacceptable quality standard or builders who refuse to get involved in the rectification of built-in defects in the home. The council is mainly established to protect the interest of housing consumers, and to regulate the home-building industry. For more information on the NHBRC, please visit their website on www.nhbrc.org.
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Determining the costs involved in building a house is no easy task, simply because of economic phenomena such as inflation and price escalation. The prospective house owner should therefore at least be aware of the various costs involved when building a house:
• The cost of the property itself may vary considerably and many factors may play a role, including location, slope, view, zoning, etc. The fact of the matter is you pay for what you get.
• Apart from the stand’s purchase price, the property must be registered in the buyer’s name. The central authority in the Deeds Office registers all property in South Africa, and transfer of ownership must also be registered there by means of a transfer deed. A competent person, usually a lawyer, does this and a transfer fee is payable, as well as a fee to the lawyer. If a prospective landowner cannot afford to pay cash for the property, he/she may apply for a bank loan, called a mortgage bond, because the financial institution offering the loan will take the property as security if the owner is in default of payment. This mortgage bond must also be registered with the Deeds Office as a mortgage deed, and a mortgage registration fee is payable.
• Before building can commence, the stand must be provided with services connection points. These include points for water, sewerage and electricity. The costs for these connections vary amongst local authorities, and will be provided on request by the local authority.
• The next cost is that of the building plans and their approval. The prospective home builder may appoint and pay a professional person to do it, or opt for the easiest, most cost-effective and quickest way, namely buying a full set of building plans of a dream house from inhouseplans.
• The actual building costs are by far the main component of the total costs. These usually consist of material costs and labour costs, and may vary from city to city. They will also vary depending on the degree and quality of finishing required.
• During the building process, you may also be required to make use of other professional disciplines that involve professional fees. For instance, an owner may have to use the services of a professional engineer to design and supervise a reinforced concrete slab, or a land surveyor to point out the exact stand boundaries.
• Final costs may include extras such as fencing, landscaping, a pool and paving.
Apart from the actual building costs, and the above-mentioned extras, all other costs are mostly fixed. The only variable element where an owner can save is in the actual building costs. Even here the materials component is pretty much fixed, and you can possibly save on the labour element and the portion reserved as profit for the builder.
If an owner wishes to use the services of a building contractor, a profit margin will most likely be added to all material and labour costs. Although this is a safe way to go for the layperson, it is also more expensive. The safest way is to appoint an architect or building consultant to oversee the building process, but then the owner must be prepared to pay another mark-up on all costs.
If the owner has the necessary knowledge and skills, he/she can become an owner-builder and appoint subcontractors to do the job. By going this route, the owner cuts out all proft taken by somebody else, and only has to pay the material and labour costs of the subcontractors.