Consumers and the Property Practitioners Bill

Has the Property Practitioners Bill missed the point?

consumers

Are consumers offered more protection?

Parliament passed the new Property Practitioners Bill on Tuesday 4th December 2018. This bill has been on the cards since 2011!

The Bill was supposed to finally provide buyers (consumers) more protection in the secondary housing market.

However, it appears the Minister of Human Settlements and his staff and the National Assembly totally missed the point!

Here is that portion of the Bill:

CHAPTER 10

CONSUMER PROTECTION

Mandatory disclosure form

  1. A property practitioner –
    1. may not accept a mandate unless the seller or lessor of the property has provided him or her with a fully completed and signed mandatory disclosure in the prescribed form; and
    2. must provide a copy of the completed mandatory disclosure form to a prospective purchaser or lessee who intends to make an offer for the purchase or lease of a property.
  2. The completed mandatory disclosure form signed by all relevant parties must be attached to any agreement for the sale or lease of property and forms an integral part of that agreement, but if such a disclosure form was not completed, signed or attached, the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser.
  3. A property practitioner who fails to comply with subsection (1) may be held liable by any affected consumer.
  4. Nothing in this section prevents the Authority from taking action against a property practitioner or imposing an appropriate sanction.
  5. Nothing in this section prevents a consumer, for his or her account, from undertaking a private property inspection to confirm the state of the property before finalising the transaction.

This is the protection this Bill offers to buyers (consumers) who buy properties from sellers.

So what has changed?

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Snag Inspection and Report

New Homeowners Should Have a Professional Snag Inspection

snag inspection
The NHBRC requires that a snag inspection or punch list is handed over to the builder within 90 days after the occupation of the building.

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Do you believe that you are protected by buying from a reputable developer or builder? Will you be able to identify all the snags without a professional snag inspection?

What buyers don’t realise is that other building contractors subcontract to the developer or builder. Both the developer and builders are under pressure to complete the units or homes within a contractual timeframe. Often, the builders take shortcuts resulting in best building practices falling by the wayside.

In addition, most new homebuyers believe the NHBRC, bank and municipal building inspectors provide them with this sort of protection.

This is not the case!

Inspectors duties

Bank inspectors

Your bank inspector determines the market value of property, land, and improvements for the bank. Therefore, the inspector is not concerned with the state of the property unless it affects the value of the property. If the valuation is within bank requirements, you will qualify for the bank loan. They don’t issue the builder or developer with a snag or punch list!

Municipal Building Inspectors

The municipal building inspectors check your building to ensure it complies with approved construction drawings, local bylaws and zoning regulations. In addition, they are also responsible for ensuring compliance with local and national building regulations. They will issue an occupation cetificate if they judge that the building is compliant. Snags and defects to finishes are not their problem!

Engineers

Structural engineers inspect and evaluate the structures of your home only. These are the foundations, slabs, walls and roof.  They are not concerned with the snags and defects in installations and finishes which make up more than half the value of your house.

NHBRC inspectors

NHBRC inspectors inspect all new homes to check that the builder is complying with the NHBRC requirements on-site

The NHBRC Warranty Fund covers you against major and defined structural defects for up to five years. Enrolling your new home with the NHBRC is a statutory requirement. Theoretically, this affords you protection against contractors who deliver substandard design, workmanship and poor-quality materials.

As a new homeowner, you have the right to instruct your developer or builder with a snag list or punch list to rectify shoddy and defective work. This includes non-compliance or deviation from the terms, plans and specifications of your building agreement with him.

However, all the required NHBRC inspections are seldom done.

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