Social Housing Act 16 of 2008


Government Gazette
REPUBLIC OF SOUTH AFRICA

Vol. 521 Cape Town 5 November 2008 No. 25721
THE PRESIDENCY No. 1199 5 November 2008
It is hereby notified that the President has assented to the following Act, which is hereby published for general information:–
No. 16 of 2008: Social Housing Act, 2008.

ACT To establish and promote a susta inable social hous ing env ironment ; to define the functions of national , provincial and local governments in respect of social hous ing; to provide for the es tabl i shment of the Social Hous ing Regulatory Authori ty in order to regulate all social housing institutions obta in ing or hav ing obtained publ ic funds; to al low for the undertaking of approved projects by o ther del ivery agents with the benefit of public money; to give statutory recognit ion to social hous ing institutions; and to provide for mat ters connected therewith.
P R E A M B L E
W H E R E A S in terms of section 26(1) of the Consti tut ion of the Republ ic of South Africa, 1996, everyone has the right to have access to adequate hous ing;
A N D W H E R E A S in terms of section 26(2) of the Const i tut ion, 1996, the State must take reasonable legislative and other measures , within its available resources , to achieve the progressive realisation of this right;
A N D W H E R E A S in te rms of section 2( 1 )(a) of the Hous ing Act , 1997 (Act No . 107 of 1997), national, provincial and local spheres of government must give priority to the needs of the poor in respect of hous ing development ;
A N D W H E R E A S all three spheres of government must , in terms of section 2(1)(e)(iii) of the Hous ing Act, 1997, p romote the establ ishment , development and maintenance of socially and economical ly viable communi t i es and of safe and healthy living condi t ions to ensure the el imination and prevention of s lums and slum condi t ions;
A N D W H E R E A S all three spheres of government must , in terms of section 2(1)(e){vii) of the Hous ing Act, 1997, promote higher density in respect of hous ing deve lopment to ensure the economical utilisation of land and services;
A N D W H E R E A S there is a need for social housing to be regulated;
A N D W H E R E A S there is a dire need for affordable rental housing for low to medium income households which cannot access rental housing in the open market ,
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BE IT T H E R E F O R E E N A C T E D by the Par l iament of the Republ ic of South Africa, as fo l lows:— A R R A N G E M E N T O F S E C T I O N S
Sections
C H A P T E R 1
D E F I N I T I O N S A N D G E N E R A L P R I N C I P L E S A P P L I C A B L E T O S O C I A L H O U S I N G
1. Definitions
2. General principles applicable to social hous ing
C H A P T E R 2
R O L E S A N D R E S P O N S I B I L I T I E S
3. Roles and responsibili t ies of national government
4. Roles and responsibili t ies of provincial government 5. Roles and responsibili t ies of municipali t ies
6. Roles and responsibili t ies of other role-players
C H A P T E R 3
S O C I A L H O U S I N G R E G U L A T O R Y A U T H O R I T Y
7. Establ ishment of Social Hous ing Regulatory Authori ty
8. Composi t ion of Regulatory Authority 9. Appoin tment of Council 10. Staff of Regulatory Authori ty 11. Funct ions of Regulatory Authori ty
12. Powers of intervention of Regulatory Authori ty
C H A P T E R 4
S O C I A L H O U S I N G I N S T I T U T I O N S
13. Accreditat ion of social housing institutions
14. Funct ions of social housing institutions 15. Managemen t of social housing institutions
16. Report ing by social hous ing institutions
C H A P T E R 5
G E N E R A L P R O V I S I O N S
17. Just administrat ive action
18. Financing of social housing 19. Regulat ions 20. Short title and commencemen t
C H A P T E R 1 D E F I N I T I O N S A N D G E N E R A L P R I N C I P L E S A P P L I C A B L E T O S O C I A L
H O U S I N G
Definitions
1. In this Act, unless the context indicates o the rwi se—
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"accredi tat ion" means the screening, evaluation, provisional and final accredita­ tion by the Regulatory Authori ty that will, amongst other things, a l low a social housing institution access to grants available under the social hous ing p r o g r a m m e ; "approved project" means a social housing project in a restructuring zone approved by a provincial government pursuant to an applicat ion for capital grant funding to undertake the acquisition, development , conversion or upgrading of buildings for social housing; "capital g r a n t " means the capital grant contemplated in the social hous ing policy; "Counc i l" means the Counci l appointed in terms of section 9; " D e p a r t m e n t " means the National Depar tment of Hous ing; "Director-General" means the Director-General of the National Depar tment of Hous ing; "house ru les" means the rules in relation to the control, management , admin is ­ tration, use and enjoyment of the property of a social housing institution; "Hous ing Act, 1997" means the Housing Act 1997 (Act No . 107 of 1997); "institutional inves tment grant" means one or more of the capaci ty-bui lding grants contempla ted in the social housing policy; "institutional investment p l a n " means a training and skills deve lopment plan which is a componen t of the social housing investment plan intended to ensure that social housing institutions acquire the expertise, skills and operat ional capaci ty to manage such institutions on a sustainable basis and produce and manage approved projects; "investment cri teria" means the criteria against which the Regulatory Authori ty may make investments in social housing institutions; "lease agreement" means the standard lease agreement utilised by a social housing institution, and includes the house rules; "low to m e d i u m income househo lds" means those households falling within the income categories as determined by the Minister from t ime to t ime; "maladmin i s tra t ion" means non-compl iance with this Act or a situation or condit ion indicating substantial financial, governance or management failure; " M E C " means the member of the Execut ive Council of a province responsible for housing; "Mini s t er" means the National Minister of Housing; " M i n m e c " means a standing intergovernmental body consist ing of at least the Minis ter and the M E C s responsible for housing. "National Hous ing Finance Corporat ion" means the National Hous ing F inance Corporat ion incorporated as a public company in terms of the Compan ie s Act , 1973 (Act N o . 61 of 1973); "national housing p r o g r a m m e " means a p rogramme contempla ted in section 3(4)(g) of the Housing Act, 1997; " N H B R C " means the National H o m e Builders Registration Counci l , established under the Housing Consumer Protection Measures Act, 1998 (Act N o . 95 of 1998): "other del ivery agent" means an entity other than a social housing institution which may under take an approved project, but excludes a provincial government or a municipal i ty; "parl iamentary commit tee s" means the Portfolio and Select Commi t t ees of Parl iament responsible for Housing. "prescr ibe" means prescribe by the Minister by regulation or prescr ibe by the Regulatory Authori ty in its rules, as the case may be; "provincial g o v e r n m e n t " means a provincial government , acting through the M E C responsible for housing; "Publ ic Finance M a n a g e m e n t A c t " means the Public F inance M a n a g e m e n t Act , 1999 (Act N o . 1 of 1999); "publ ic f u n d s " means the institutional subsidy or any other gove rnmen t subsidy utilised for creation of housing stock or any funding provided pursuant to this Act; "qualifying cr i ter ia" means the criteria applied by the Regulatory Authori ty for purposes of the accreditation of a social housing institution as prescr ibed by the Minister; "regulat ion" means a regulation under this Act; "Regulatory Author i ty" means the Social Hous ing Regula tory Authori ty established by section 7; "restructuring z o n e " means a geographic area which has b e e n —
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(a) identified by the municipality, with the concurrence of the provincial government , for purposes of social housing; and
(b) designated by the Minister in the Gazette for approved projects; "social hous ing" means a rental or co-operat ive housing option for low to med ium income households at a level of scale and built form which requires institutionalised management and which is provided by social housing institutions or other delivery agents in approved projects in designated restructuring zones with the benefit of public funding as contemplated in this Act; "social housing inst i tut ion" means an institution accredited or provisionally accredited under this Act which carries or intends to carry on the business of providing rental or co-operat ive housing options for low to medium income households (excluding immediate individual ownership and a contract as defined under the Alienat ion of Land Act, 1981 (Act No. 68 of 1981)), on an affordable basis, ensur ing quality and m a x i m u m benefits for residents , and managing its hous ing stock over the long term; "social housing investment p l a n " means a corporate plan and budget as required by the Public Finance Managemen t Act , compr is ing a capital investment plan and an institutional investment plan for the capital institutional and investment activity of the Regulatory Authori ty for purposes of the social hous ing p rog ramme; "social housing pol icy" means the official social hous ing policy as determined by the Minister in terms of section 3(2)(a) of the Hous ing Act , 1997; "social housing p r o g r a m m e " means the national housing p rogramme for social housing, instituted by the Minister in terms of section 3{4)(g) of the Hous ing Act , 1997; "social hous ing regulatory p l a n " means a corporate plan and budget as required under section 52 of Public Finance Managemen t Act; and "this A c t " includes the regulations, any rules, directives or instructions m a d e under it.
General principles appl icable to social hous ing
2. (1 ) In giving priority to the needs of low and med ium income households in respect of social housing development , the national , provincial and local spheres of government and social housing institutions m u s t —
(a) ensure their respective housing p rogrammes are responsive to local hous ing demands , and special priority must be given to the needs of women , chi ldren, chi ld-headed households , persons with disabilities and the elderly;
(b) support the economic development of low to med ium income communi t i es by providing housing close to jobs , markets and transport and by st imulat ing j o b opportunit ies to emerging entrepreneurs in the housing services and const ruc­ tion industries;
(c) afford residents the necessary dignity and privacy by providing the residents with a clean, healthy and safe envi ronment :
(d) not discriminate against residents on any of the grounds set out in section 9 of the Consti tut ion, including individuals affected by HIV and A I D S ;
(e) consult with interested individuals, communi t ies and financial institutions in all phases of social housing development ;
(f) ensure the sustainable and viable growth of affordable social hous ing as an objective of housing policy;
(g) facilitate the involvement of residents and key s takeholders through consul­ tation, information sharing, educat ion, training and skills transfer, thereby empower ing residents;
(h) ensure secure tenure for residents in social housing insti tutions, on the basis of the general provisions governing the relat ionship be tween tenants and landlords as set out in the Rental Hous ing Act, 1999 (Act N o . 50 of 1999), and between primary housing co-operat ives and its member s as set out in the Co-operat ives Act, 2005 "(Act No . 14 of 2005) ;
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(i) p r o m o t e —
(i) an env i ronment which is conducive to the realisation of the roles, responsibil i t ies and obligations by all role-players entering the social housing market ;
(ii) t raining opportunit ies for s takeholders and interested parties w h o wish to enter the social housing market ;
(iii) the establ ishment , deve lopment and maintenance of socially and economical ly viable communi t ies to ensure the el imination and preven­ tion of s lums and slum condi t ions;
(iv) social, physical and economic integration of hous ing deve lopment into exist ing urban and inner-city areas through the creation of quality l iving envi ronments ;
(v) medium to higher density in respect of social housing deve lopment to ensure the economical utilisation of land and services;
(vi) the provision of social, communi ty and recreational facilities c lose to social housing development ;
(vii) the expression of cultural identity and diversity in social hous ing development ;
(viii) the suitable location of social housing stock in respect of employmen t opportuni t ies :
(ix) the convers ion or upgrading of suitable residential and non-residential bui ldings for social housing use;
(x) incentives to social housing institutions and other delivery agents to enter the social housing market;
(xi) an unders tanding and awareness of social housing processes ; (xii) t ransparency, accountabil i ty and efficiency in the administrat ion and
management of social housing stock; (xiii) best practices and min imum norms and s tandards in relation to the
delivery and management of social housing; (xiv) the provision of institutional capacity to support social hous ing
initiatives; (xv) the creation of sustainable, viable and independent hous ing institutions
responsible for providing, developing, holding or managing social housing stock; and
(xvi) the use of public funds in a manner that st imulates or facilitates private sector investment and participation in the social housing sector.
(2) (a) The Minis ter may, by notice in the Gazette, prescribe any principle for social housing deve lopment in addition to, and consistent with, the principles set out in subsection (1).
(b) The Minis ter must , before prescribing any principle contemplated in paragraph (a)-
(i) cause a draft of such principle to be publ ished by notice in the Gazette and invite the public to commen t within 30 days after such publicat ion;
(ii) after the period contemplated in subparagraph (i) has lapsed, submit a list of notices publ ished in te rms of subparagraph (i) to Par l iament for approval .
(c) The list of notices contempla ted in paragraph (b)(i) must in respect of each notice state the number and title of the notice and the number and date of the Gazette in which it was published.
(d) The Minis ter may only prescribe a principle contemplated in paragraph (b) if all comment s have been considered and Parl iament has approved the prescr ibing of the principle.
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C H A P T E R 2
R O L E S A N D R E S P O N S I B I L I T I E S
Roles and responsibil it ies of national government
3. (1) National government , acting through the Minister, m u s t — (a) create and uphold an enabling envi ronment for social housing, by providing
the legislative, regulatory, financial and policy f ramework for the delivery of social housing;
(b) ensure compl iance with its consti tutional responsibi l i t ies; (c) address issues that affect the growth, deve lopment or sustainability of the
social housing sector; (d) establish with provinces and municipali t ies institutional capacity to support
social housing initiatives; (e) institute and fund the social housing p rog ramme as a national housing
p rog ramme to promote the deve lopment and supply of social housing stock for low to medium income persons;
(f) designate restructuring zones submit ted by provinces and identified by municipali t ies and specifically provided for in a munic ipa l i ty ' s integrated deve lopment plan contemplated in section 25 of the Local Government : Munic ipal Systems Act, 2000 (Act N o . 32 of 2000) , and may, where appropriate , after due notice in the Gazette, wi thdraw such designat ion:
(g) establish capital and institutional investment grants ; (h) review annually and approve the social hous ing investment plan and the social
housing regulatory plan; (i) allocate funds from the Depar tment ' s budget for the operat ional costs and
commi tments of the Regulatory Authori ty in accordance with the approved social housing investment plan and the social hous ing regulatory plan, respectively;
(j) de termine norms and standards to be adhered to by provinces and municipal i ­ ties; and
(k) monitor the Regulatory Authority. (2) The costs and expenses connected with the implementa t ion of this Act must be
defrayed from money appropriated by Par l iament to the Depar tment for that purpose .
Roles and responsibil it ies of provincial g o v e r n m e n t
4. (1) Every provincial government , through its M E C , m u s t — (a) ensure fairness, equity and compl iance with national and provincial social
housing norms and standards; (b) ensure the protection of consumers by creat ing awareness of consumer s '
rights and obligat ions; (c) facilitate sustainability and growth in the social hous ing sector; (d) mediate in cases of conflict between a social hous ing institution or other
delivery agent and a municipali ty, if required; (e) submit proposed restructuring zones to the Minis ter ; (f) monitor social housing projects to ascertain that re levant prescr ipts , norms
and standards are being compl ied with; (g) approve, allocate and administer capital grants , in the manner contempla ted in
the social housing investment plan, in approved projects; (h) ensure that the process contemplated in paragraph (g) is conducted efficiently; (i) adminis ter the social housing p rogramme, and may for this purpose
a p p r o v e — (i) any projects in respect thereof; and
(ii) the financing thereof out of money paid into the accredited bank account of the province as contemplated in section 18(3): and
(j) develop the capacity of municipali t ies to fulfil the roles and responsibil i t ies contemplated in section 5.
(2) A provincial government may not interfere with the governance or managemen t of social housing institutions.
(3) Subject to section 11(3)(k), the Regulatory Authori ty may not interfere with the moni tor ing of social housing projects.
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Roles and responsibil it ies of municipal i t ies
5. A municipali ty must, where there is a d e m a n d for social hous ing within its municipal area, as part of the municipal i ty ' s process of integrated deve lopment planning, take all reasonable and necessary steps, within the national and provincial legislative, regulatory and policy f ramework—
(a) to facilitate social housing delivery in its area of jur isdict ion; (b) to encourage the deve lopment of new social housing stock and the upgrading
of existing stock or the conversion of exist ing non-residential stock; (c) to provide acces s—
(i) to land and buildings for social housing deve lopment in des ignated restructuring zones;
(ii) for social housing institutions to acquire municipal rental stock; (iii) to municipal infrastructure and services for approved projects in
designated restructuring zones; and (d) to the extent permit ted under the Local Government : Municipal F inance
Managemen t Act , 2003 (Act No . 56 of 2003) , and the Local Government : Municipal Systems Act, 2000 (Act No. 32 of 2000) , t o — (i) initiate and motivate the identification of restructuring zones ; and
(ii) enter into performance agreements with social housing inst i tut ions.
Roles a n d responsibil it ies of other role-players
6. (1) Subject to such directives as the Minister may issue by notice in the Gazette, the National Housing Finance Corporat ion must , in respect of social h o u s i n g —
(a) provide access to loan funding; (b) make available to the Regulatory Authori ty when requested thereto any
financial information to enable it to assess the institutional health and financial sustainability of social housing insti tutions;
(c) facilitate or, where possible , provide access to guarantees for loan funding from financial insti tutions;
(d) explore and support mechan isms a imed at facilitating public funding for social housing; and
(e) conclude an agreement with the Regulatory Authori ty a imed at avoiding the duplication of functions and overregulat ion of social housing insti tutions.
(2) Other delivery agents may undertake approved projects in des ignated restructur­ ing zones with the benefit of public funding to the extent determined in the social housing p rogramme pursuant to agreements concluded with the Regulatory Authori ty as contemplated in sections l l ( 3 ) ( d ) and 19(1)(b)(i).
C H A P T E R 3
S O C I A L H O U S I N G R E G U L A T O R Y A U T H O R I T Y
Establ i shment of Social Hous ing Regulatory Authority
7. (1) There is hereby established a juristic person to be known as the Social Hous ing Regulatory Authority.
(2) The Public Finance Managemen t Act applies to the Social Hous ing Regula tory Authority.
(3) The Social Hous ing Regulatory Authori ty is accountable to the Minis te r and Parl iament.
Compos i t ion of Regulatory Authori ty
8. (1) The Regulatory Authority consists of a— (a) Counci l , appointed in accordance with section 9;
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(b) Chief Execut ive Officer, appointed by the Counci l with the approval of the Minister, responsible for the day to day management of the affairs of the Regulatory Authori ty;
(c) Corporate Services Manager , appointed by the Chief Execut ive Officer, responsible for financial management , including corporate management services.
(2) The Chief Execut ive Officer and the Corporate Services Manage r serve as execut ive members of the Counci l .
(3) The Regulatory Authori ty acts through the Counci l and all acts of the Counci l are regarded as acts of the Regulatory Authority.
Appoin tment of Counci l
9. (1) The Council consists of at least seven and not more than 12 fit and proper persons w h o have knowledge , experience or qualifications in the field of social and rental housing or other applicable competencies for the proper governance of the Regulatory Authority.
(2) (a) The Minister must , by notice in the Gazette as well as in the national news media, including at least two newspapers circulat ing throughout the Republ ic , call for the nomination of persons who comply with the criteria referred to in subsection (1).
(b) The Minis ter must establish a selection commit tee consist ing of not more than seven members , two of w h o m must be the chairpersons of the par l iamentary commit tees or their delegates, to advise the Minister on the appoin tments .
(3) The members contemplated in subsection (1) must be appointed by the Minis ter and serve in a non-executive capacity.
(4) A member of the Counci l is appointed for the period determined by the Minister but not exceeding three years at a t ime, and may, subject to subsection (2), be reappointed on the termination of that period.
(5) The Minister may at any t ime terminate the membersh ip of a m e m b e r of the Counci l for reasons which are just and fair.
(6) A member of the Counci l other than a person w h o is in the full-time employmen t of the State, is paid an a l lowance determined by the Minis ter with the approval of the Minister of Finance.
(7) A member of the Council ceases to be a member if— (a) he or she resigns; (b) his or her estate is sequestrated; (c) he or she becomes of unsound mind; (d) he or she is convicted of an offence and sentenced to impr isonment without
the option of a fine; (e) he or she becomes an employee or director of a social hous ing institution, a
member of Parl iament, of a provincial legislature, of a municipal counci l , of the Cabinet or of the Execut ive Counci l of a Province; or
(f) he or she has failed to attend three consecut ive meet ings , without an apology or justified excuse.
(8) The Counci l must adopt s tanding instructions to ensure compl iance with this Act, the Public Finance Managemen t Act and any other legislation applicable to the Regulatory Authority.
(9) The Counci l may appoint such commit tees as it may consider appropriate for fulfilling its responsibili t ies under the Act and to ensure proper governance of the Regulatory Authori ty and may delegate such power or assign such functions as it may consider appropriate, including any power or function under section 12. to such commit tee .
(10) The Counci l must establish the necessary matters and procedures relating to meet ings of the Counci l .
(11) The quorum for any meeting of the Council is at least 5 0 % plus 1 of the member s .
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Staff of Regulatory Authori ty
10. (1) The staff of the Regulatory Authori ty consis ts of— (a) senior managers responsible for the necessary activit ies of the Regula tory
Authori ty such as accreditation, compl iance , insti tutional investment , capital investment of the Regulatory Author i ty ; and
(b) such other persons as are necessary to perform the functions incidental to the functions of the Regulatory Authority.
(2) The staff of the Regula tory Authori ty must be appointed by the Chief Execut ive Officer on the salary, terms and other condi t ions de termined by the Chief Execut ive Officer in consultat ion with the Counci l .
Funct ions of Regulatory Authori ty
11. (1) The Regulatory Authori ty must , subject to the provis ions of this A c t — (a) p romote the deve lopment and awareness of social hous ing; (b) provide advice and support to the Depar tment in its deve lopment of policy for
the social housing sector and facilitate national social hous ing p rog rammes ; (c) advise the Minis ter on deve lopments in the social hous ing sector; (d) p romote an enabl ing envi ronment for the g rowth and deve lopment of the
social housing sector; (e) provide best practice information and research on the status of the social
housing sector; (f) support provincial governments with the approval of project appl icat ions by
social housing insti tutions; (g) assist, where requested, in the process of the designat ion of restructuring
zones; (h) enter into agreements with provincial governments and the Nat ional Hous ing
Finance Corporat ion to ensure the co-ordinated exercise of powers ; and (i) perform any other function or exercise any other power that the Minis ter m a y
prescribe. (2) The Regulatory Authori ty m u s t —
(a) annually, in accordance with the Public F inance M a n a g e m e n t Act . prepare and submit the social housing inves tment plan and the social housing regulatory plan to the Minister;
(b) annually, in accordance with the Public F inance M a n a g e m e n t Act, prepare and submit annual financial s tatements and an annual report to the Minis ter on its performance in respect of the social hous ing investment plan and the social housing regulatory plan, respectively, dur ing the preceding year; and
(c) comply with the provis ions of the Public F inance M a n a g e m e n t Act and regulat ions applicable to public entit ies.
(3) The Regulatory Authori ty must , subject to the provis ions of this A c t — (a) provide financial assistance to social hous ing institutions through grants to
service providers accredited by the Regula tory Authori ty to enable them to develop institutional capacity, gain accreditat ion as social hous ing institu­ tions, and to submit viable project appl icat ions;
(b) accredit institutions meet ing accreditation criteria as social hous ing institu­ t ions:
(c) maintain a register of social housing insti tutions with the prescribed d e t a i l s — (i) which is open for inspect ion by the public at the premises of the
Regulatory Authori ty during normal business hours against payment of the prescribed fee; and
(ii) annually provide a copy thereof to the Nat ional Treasury and the Depar tment ;
(d) enter into suitable agreements with social housing insti tutions and other delivery agents for the protect ion of the gove rnmen t ' s investment in social hous ing;
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(e) conduct compl iance moni tor ing through regular inspect ions and enforce compl iance , where necessary through the exercise of its powers set out in section 12;
(f) intervene in the affairs of a social hous ing institution in cases of ma ladmin­ istration, and take the necessary steps to rectify such maladminis t ra t ion as contemplated in section 12;
(g) approve, administer and disburse institutional inves tment grants and capital grants and obtain applicat ions for such grants through engagemen t with provincial governments and municipal i t ies ;
(h) consider applicat ions from social hous ing institutions to d ispose of propert ies developed, refurbished or purchased with the assistance of publ ic funding and approve or refuse applicat ions on the basis of compl iance with the investment criteria forming part of the regulat ions;
(i) consider applicat ions from social housing institutions to rel inquish their accreditat ion and be removed from the public register of social hous ing insti tutions and approve or refuse applicat ions in accordance with the prescr ibed regulat ions and rules;
(j) consider applicat ions from social housing institutions to amend their lease agreements and approve or refuse such applicat ions on the basis of the regulat ions;
(k) instruct a social housing institution not to accept a social hous ing project al located to it if— (i) the social housing institution will not be able to comple te the project
successfully; or (ii) it will undermine the social housing inst i tut ion's viabil i ty: and
(l) do all things necessary to ensure good governance and sustainabil i ty of social hous ing institutions.
(4) The Regula tory Authori ty may, subject to the provis ions of this Act and by not ice in the Gazette—
(a) m a k e rules, not in conflict with the regu la t ions— (i) g iving effect and detailed content to the regulat ions;
(ii) prescribing necessary standards, ratios, procedures , requi rements , forms and returns;
(iii) further regulat ing the conduct of social housing inst i tut ions; (iv) prescribing procedures for compl iance moni tor ing and the enforcement
of compl iance , including intervention in the affairs of social hous ing insti tutions; or
(v) specifically authorised or required by regulat ion; (b) prescr ibe, after consultat ion with the Minister , any other rules for the proper
functioning of the Regulatory Author i ty ; and (c) issue such directives, instructions and circulars as may be necessary for the
exercise of its functions under this Act . (5) The Regulatory Authori ty may, subject to the provis ions of this A c t —
(a) establish such commit tees as may be necessary to meet its object ives; (b) delegate its powers to commit tees and officers, on such te rms and condi t ions
as it may deem necessary, but may not divest itself of such powers ; (c) conc lude such contracts and institute such proceedings as may be necessary
for the exercise of its powers and fulfilment of its functions under this Act .
Powers of intervent ion of Regulatory Author i ty
12. (1) If the Regula tory Authori ty is satisfied on reasonable grounds that there has been maladminis t ra t ion by a social housing institution, the Regula tory Authori ty m u s t —
(a) prepare a report to that effect; (b) provide the social housing institution with a written notice of the Regula tory
Author i ty ' s intention to intervene, and mus t specify in that notice what remedia l action must be taken by the social hous ing insti tution;
(c) instruct the social housing institution to take the remedia l action specified in the notice, and may request the institution to obtain specified support in order to rectify such maladminis t ra t ion.
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(2) The Regula tory Authori ty may make available funds through the social hous ing investment plan to assist in meet ing the costs of any such support .
(3) Should the social housing institution continue to resist the intervention of the Regulatory Authori ty or if there is no improvement in performance in respect of the matters which necessitated the intervention, the Regulatory Authori ty may author ise a forensic investigation into the insti tution's affairs and appoint a publ ic accountant and auditor registered in terms of the Public Accountan ts ' and A u d i t o r s ' A c t , 1991 (Act N o . 80 of 1991), to under take such investigation.
(4) The Regulatory Authori ty may, after consultat ion with the providers of any debt finance to the institution and upon notice to affected parties, including the providers of finance to the inst i tut ion—
(a) apply to the High Court for the suspension of the chairperson, member s of the board, manager or execut ive or senior staff of the institution for the period of the investigation; and
(b) appoint suitably qualified persons to manage the inst i tut ion's affairs in their place pending the findings of the forensic audit report.
(5 The forensic audit report mus t m a k e a finding on whether the social hous ing institution has been managed in a manner which consti tutes maladminis t ra t ion.
(6) If the forensic audit report does not m a k e a finding of maladminis t ra t ion, the suspended persons are automatical ly re-instated as from the date of such report and the Regulatory Authori ty must review its previous instructions to the institution.
(7) If the forensic audit finds maladminis t ra t ion, the Regula tory Author i ty mus t request the m e m b e r s of the social housing institution to replace any suspended person or person associated with the maladminis t ra t ion with a person acceptable to or r ecommended by the Regulatory Authority.
(8) If the Regulatory Authori ty, based on the forensic audit report , does not bel ieve that the institution is sustainable in its current form, or if the social housing institution refuses to take the steps required under subsection (8), the Regulatory Authori ty may, after consultat ion with the providers of debt finance to the institution and upon notice to affected parties, including the providers of finance to the institution, apply to the High Court for an order placing the institution under the administrat ion of the Regula tory Authority.
(9) If the High Court grants an order placing the institution under the adminis t ra t ion of the Regulatory Authority, the Regulatory Author i ty—
(a) must manage the institution effectively and efficiently; (b) may remove the accreditat ion of the social housing institution; (c) may transfer the housing stock or r ights of the social hous ing institution to
another social housing institution prepared to accept such transfer on such terms and condi t ions as may be agreed at the t ime; or
(d) where appropriate , institute legal proceedings for the winding up of the institution.
(10) Where the Regulatory Authori ty succeeds in restoring the viabili ty of the institution or any part thereof, it may apply to High Court for—
(a) the administrat ion order to be lifted; and (b) for an order authoris ing the Regulatory Authority to appoint suitable persons
as directors and office bearers of the institution. (11) A social housing institution or any person directly affected by a decision of the
Regula tory Authori ty, may exe rc i s e— (a) any rights to internal review to the Regulatory Authori ty in accordance wi th
the prescribed procedures ; (b) any other rights according to law.
(12) A social housing institution for purposes of any inspection under this Act must , subject to the provis ions of any applicable law and subject to such l imitat ions as may be prescribed by the Minister , a l low the Regulatory Au thor i ty—
(a) access to its premises or any property developed, constructed or managed by it;
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(b) access to its records and documenta t ion; and (c) the seizure and photocopying of such records and documenta t ion as may be
required for investigation. (13) This section, in accordance with the provisions of section 6(2) , does not apply to
other delivery agents .
C H A P T E R 4
S O C I A L H O U S I N G I N S T I T U T I O N S
Accreditat ion of social housing institutions
13. (1) A s from the commencemen t of this Act . all inst i tut ions having under taken housing deve lopments with the benefit of an institutional subsidy are provisional ly accredited social hous ing institutions for purposes of this Act , subject to the provis ions of this Act and the powers of the Regulatory Authority.
(2) Provisional accreditat ion pursuant to subsection (1) lapses on the date prescribed by the Minis ter which date may not exceed 12 months after the c o m m e n c e m e n t of this Act.
(3) An institution wishing to carry on the business of social hous ing must in the prescribed format apply to the Regulatory Authority for accreditat ion.
(4) A municipal i ty wishing to participate in social hous ing may establish an institution, which must be accredited.
(5) Subject to any condi t ions prescribed by the Minister, a social hous ing institution must be a company registered under the Compan ies Act. 1973 (Act N o . 61 of 1973), or a co-operat ive registered under the Co-operat ives Act, 2005 (Act N o . 14 of 2005) . or any other form of institution acceptable to the Regulatory Authority.
(6) Should a social housing institution comply with all the qualifying criteria, it shall be accredited as a social housing institution in terms of this Act and its details must be entered in a register kept for this purpose by the Regulatory Authority.
(7) Should a social housing institution at any stage fail to comply with the qualifying criteria, the Regulatory Authori ty m a y —
(a) exercise the powers referred to in section 12; and (b) in its discretion and as determined in the regulat ions and upon notice to
affected par t i es— (i) recover any monies granted to the social housing institution in terms of
the social housing p rogramme; (ii) withhold any further grants ;
(iii) stipulate condit ions relating to reforms to be under taken by the social housing institution or improvements to be effected by it for the payment of any grants; and
(iv) where necessary, intervene in accordance with the provis ions of section 12.
(8) A social housing institution must comply with all the provis ions of the Act in terms of which it was established and any other appl icable law, and any contravent ion of the said provis ions may result in its accreditation being wi thdrawn by the Regulatory Authority.
(9) The lapsing of provisional accreditation, or the wi thdrawal of accreditat ion in terms of this Act, does not preclude the Regulatory Authori ty from exercis ing any of its powers under this Act.
Funct ions of social housing institutions
14. (1) Social housing institutions m u s t — (a) comply on an ongoing basis with the criteria which qualify them for
accreditat ion; (b) acquire , develop, manage , or both develop and manage , approved projects
pr imari ly for low income residents with the jo in t support of local authori t ies;
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(c) p romote the creation of quality l iving envi ronments for low income res idents ; (d) re-invest operational surpluses generated as a result of funding provided in
terms of the social hous ing p rogramme, in further approved projects; (e) consult with municipal i t ies with a view to developing social hous ing stock; (f) enter into and comply with annual performance agreements wi th munic ipal i ­
ties on approved projects in their areas of jur isdict ion; (g) inform residents on consumer rights and obl igat ions in respect of social
housing; (h) observe and operate within government policy on social housing; (i) seek permission from the Regula tory Authori ty for the sale of any propert ies
in their ownersh ip on the basis that such sale will not endanger the security of tenure of exist ing residents meet ing the condi t ions of their tenancy and that the grant componen t of the proceeds receipts from such sale will be used to provide social housing;
(j) seek permiss ion from the Regulatory Authori ty for any merger or separat ion of social housing insti tutions;
(k) seek permiss ion from the Regula tory Authori ty for any changes to lease agreements or other prescribed documenta t ion ; and
(l) seek permission from the Regulatory Authori ty for any prescribed matter. (2) Social housing institutions must at all t imes function in compl iance w i t h —
(a) the provisions of this Act; (b) the provis ions of the social hous ing p rog ramme and guidel ines of the
government ; (c) the ministerial national norms and standards in respect of pe rmanent
residential s tructures; (d) the national building regulat ions under the Nat ional Building Regula t ions and
Building Standards Act, 1977 (Act N o . 103 of 1977); (e) the technical s tandards imposed by the National H o m e Bui lders Registrat ion
Counci l established under the Hous ing Consumer Protection Measu res Act, 1998 (Act No. 95 of 1998);
(f) any agreement entered into between the Regulatory Authori ty and the social housing institution;
(g) the provis ions of the Rental Hous ing Act , 1999 (Act N o . 50 of 1999); and (h) any other law.
(3) A social housing institution m u s t — (a) on an annual basis submit its draft lease agreement as well as any prescr ibed
documents and changes thereto for approval to the Regulatory Author i ty ; and (b) ensure that the content of its lease agreement and proposed changes are
communica ted to residents and are strictly adhered to by all parties.
M a n a g e m e n t of social hous ing institutions
15. (1 ) Each accredited social housing institution m u s t — (a) within 90 days of it having attained accreditation, prepare and submit to the
Regulatory Authori ty for approval a corporate governance policy which must address at least— (i) risk management and risk strategy policies with regard to, amongst other
things, deve lopment , operat ional , financial, property managemen t , human resource, market , institutional and compl iance risks;
(ii) internal control and audit mode l s ; (iii) all the requirements of the regulat ions; and (iv) any other aspect that may be prescribed;
(b) appoint a competent manager who , through the assistance and support of competent personnel and s y s t e m s — (i) is responsible for the day to day managemen t of the social hous ing
institution and the housing stock developed through funding obtained in terms of the social housing p rog ramme;


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(ii) is responsible for reporting to the Regulatory Authori ty in terms of this Act;
(iii) is the designated link between the Regulatory Authori ty and the social housing institution in respect of compl iance with this Act or any regulat ions promulgated in terms of this Act; and
(iv) must ensure accreditation compl iance ; and (c) submit to the Regulatory Authori ty a copy of its per formance agreement with
the municipali ty. (2) The appointment of the manager referred to in subsect ion (l)(b) mus t be in wri t ing
and a copy of the letter of appointment must be sent to the Regula tory Authori ty within 21 days of such appointment .
(3) (a) Any vacancy in the office of a manager must , within three mon ths of such vacancy occurr ing, be filled, or all reasonable steps must have been taken to fill such vacancy, and a copy of the letter of appointment must be sent to the Regula tory Authori ty in terms of subsection (2).
(b) Dur ing the period of such vacancy the social housing institution must ensure that a competent person acts as manager.
(4) The social housing institutions must consult with the tenants and keep them informed of any rules and prescript ions regarding the managemen t of the social hous ing units.
Report ing by social housing institutions
16. (1) A social housing institution must report to the Regula tory Au tho r i t y— (a) at such intervals and in such detail as may be prescribed by regulat ion; and (b) annually, within three months of the financial year-end.
(2) The documenta t ion to be provided in terms of subsection (1)(b) mus t include the social housing insti tution's annual report and audited financial s ta tements .
(3) A social housing institution must m a k e available to the Regula tory Authori ty any information reasonably requested of it in the carrying out of its regulatory and investment functions.
(4) The Regulatory Authori ty must, subject to the Promot ion of Access to Information Act, 2000 (Act No . 2 of 2000) , maintain the confidentiality of business sensit ive information passed to it under regulatory confidence.
C H A P T E R 5
G E N E R A L P R O V I S I O N S
Just adminis trat ive act ion
17. Any decision taken under this Act must comply with the pr inciples of just administrat ive action.
Financ ing of social hous ing
18. (1) Funds for the social housing p rog ramme and for financing the implementa t ion of the social housing p rog ramme and any relevant provincial hous ing p rog ramme consistent with national housing policy must be made available f rom—
(a) money earmarked for that purpose from the Depa r tmen t ' s annual budget ; and (b) money allocated to a province for that purpose in te rms of the annual Divis ion
of Revenue Act . (2) Cri teria for—
(a) the earmarking of money in terms of subsection (1)(a) mus t be determined by the Minister after consultation with M i n m e c ;
(b) the allocation of money in terms of subsection (1)(b) must be de termined by the Minister in consultat ion with M i n m e c .


Act No. 16, 2008 SOCIAL HOUSING ACT. 2008
(3) Mon ies m a d e available as contemplated in subsection (1) may be utilised only for the purposes set out in this Act and the annual Division of Revenue Act , as the case m a y be.
Regulat ions
19. (1) The Minister, by notice in the Gazette and after consultat ion with Pa r l i amen t— (a) must m a k e regulat ions prescr ib ing—
(i) any matter required to be prescribed by regulat ion under this Act ; (ii) a code of conduct , the investment criteria and the qualifying criteria for
social housing insti tutions; (b) may make regula t ions—
(i) in respect of the required provisions of the agreements be tween the Regulatory Authori ty and other delivery agents ;
(ii) in respect of the required provisions of the agreements be tween the Regulatory Authori ty and provincial governments ;
(iii) in respect of the required provisions of the agreements be tween the Regulatory Authori ty and the National Hous ing Finance Corpora t ion : or
(iv) any other ancillary or adminis trat ive matter that is necessary to prescr ibe for the proper implementat ion or adminis t rat ion of this Act .
(2) The Regulat ions may provide for offences in cases of contravent ion thereof or non-compl iance therewith, and for penalt ies not exceeding a fine or impr i sonment for a period not exceeding six months or to both a fine and such impr i sonment .
Short title and c o m m e n c e m e n t
20. This Act is called the Social Hous ing Act. 2008 , and comes into operat ion on a date determined by the President by proclamat ion in the Gazette.