DIRECTORATE: HOUSING FRAMEWORK LEGISLATION

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DIRECTORATE HOUSING FRAMEWORK LEGISLATION

• Proposed Amendments of Sections 10A and 10B of
  Housing Act No. 107 of 1997
• 23 August 2006

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Sections 10A and 10B

• Background
• 1.1 Problems giving rise to the need for sections
  10A and 10B
• Escalating sale of State subsidised houses,
  mostly for substantially less than the subsidy
  amount.
• Prevalence of selling these state subsidised
  houses to persons who do not even qualify for a
  subsidised house.
• State subsidised houses often sold in execution
  for ridiculous amounts to settle claims by
  creditors for non-housing related debts.

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Sections 10A and 10B

• 1.2 Reasons for inserting 10A and 10B under
  Housing Amendment Act No. 4 of 2001
• Protect governments investment in low cost
  subsidised housing.
• Prevent the sale of State subsidised houses for 8
  years from date of acquisition.
• Ensure that State Subsidised houses are available
  for qualifying beneficiaries if they are vacated
  before the period of 8 years.

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Sections 10A and 10B

• 1.3 Practical problems identified with the
  implementation of Sections 10A and 10B
• Section 10A
• Offer to provincial housing departments under 10A
  interpreted as a notice of vacation with the
  property being deemed as owned by the province,
  with the seller reverting back to the waiting
  list of persons requiring subsidised housing.

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Sections 10A and 10B

• Clearly does not constitute a pre-emptive right
  in the legal sense but rather a disposition
  without compensation.
• No compensation is paid to beneficiary wanting
  to vacate, such as appreciation of value or
  improvements made by such beneficiary which
  could be labeled as unconstitutional under
  Section 25 of the Constitution.

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Sections 10A and 10B

• Procedures pertaining to transfer in the Deeds
  Office are virtually non-existent, if compared
  with Section 10B.
• Section 10B
• Pre-emptive right is not linked to the 8 year
  period provided for in Section 10A.
• It is not necessary to have Section 10B.
  Sections 10A and 10B should not be divorced but
  should be merged.

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Sections 10A and 10B

• Proposed amendments to Sections 10A and 10B under
  the Housing Amendment Bill, 2006
• Sections 10A and 10B have been merged to from
  Section 10A, with Section 10B being repealed.
• The restriction on the sale of subsidised houses
  now applies equally to both voluntary sales
  (current section 10A) and involuntary sales
  (current Section 10B).

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Sections 10A and 10B

• The 8 year pre-emptive period is reduced to 5
  years which will be to the beneficiarys
  advantage.
• The 5 year period commences from date of
  registration of property into beneficiarys name,
  not from date of acquisition of property by
  beneficiary as in current Section 10A. This will
  result in certainty.

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Sections 10A and 10B

• Offers to provincial governments must be accepted
  or rejected by MEC within 66 days of the MECs
  receipt of the offer. This time-frame is not in
  current 10A.
• If beneficiary offers house to provincial
  government and such offer is accepted a purchase
  price is agreed between parties and beneficiary
  is paid the agreed price by province out of the
  primary bank account of such province.

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Sections 10A and 10B

• Conclusion
• Proposed amendments will lead to certainty and
  fairness for the beneficiary.
• Proposed amendments remove possible
  constitutional challenge to the provisions of the
  current Section 10A.
• Proposed amendments provide for a fair process in
  the exercise of the pre-emptive right as well as
  a properly stipulated process of transfer of
  ownership in the Deeds Office.
• The proposed amendments are acceptable to office
  of the Chief State Law Advisor.

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• THANK YOU