Chairperson, hon members of the NCOP, according to the most recent statistics at our disposal, only 10% of our population can afford to buy and own a house at current prices. This should tell all of us here of the dire need that exists out there. We cannot cater for the rest of the population, or those who do not fall within the 10% bracket as indicated. For this group, we are dependent on rental as the only means for provision of accommodation and shelter. We are therefore heavily reliant and place particular stress on the efficient functioning of the rental housing market.
Over the past eight years we have operated under a very specific rental framework and have found that we needed to urgently attend to its shortcomings so as to ensure greater efficiency and fairness in its application. What we bring to the House today is an amendment to the existing rental legislation, brought about after extensive consultations which began exactly a year ago. Subsequently, the amended Bill was published in the Government Gazette. What we bring for your approval is a culmination of these processes.
Basically, the Bill endeavours to address some critical implementation problems and to remove vestiges of discrimination that stubbornly remained in our system and also to remove a great deal of unfair burden placed on the landlord. We start off by defining "unfair practice" to ensure that all manner of unseemly practices which had dishonouring and discriminatory effects were included in the definition and therefore prohibited. The definition now means: "any act or omission by a landlord or tenant in contravention of the Act; or a practice prescribed as a practice unreasonably prejudicing the rights or interests of a tenant or a landlord."
The Bill makes provision that unfair practice will be dealt with fully in the regulations which are currently being drafted in full consultation with provinces and rental housing tribunals. A workshop is currently planned to be held between 22 and 23 November this year with government stakeholders to obtain inputs for these regulations. The reason for this amendment was that there was uncertainty as to what constituted unfair practice. With the amendment and the regulations, all unfair practices will be covered and there will be no uncertainty.
Consequently, a great deal of unhappiness experienced with the law is minimised. We have deleted references to "bona fide" in the law. This is done to ensure that a landlord may not discriminate against any visitor to a tenant, thus removing the current limitation. Currently, a landlord has a prerogative of prohibiting any visitor they do not consider bona fide.
Rental tribunals are given the right to issue rulings pertaining to the seizure of possessions subject to any regulations by the Minister. The Act is being amended to expressly provide for the seizure of possessions of defaulting tenants, but only after a ruling to that effect by a Rental Housing Tribunal or an order of court.
Furthermore, amendments are made on information on rental receipts. A relevant section specifies information that must be contained in the receipts issued by a landlord for payments made by the tenant. They should follow a particular prescription. An argument has been raised that where, for instance, tenants are able to make payments at supermarkets, etc, all the required information is not provided. To cater for this situation, a subsection has been amended to allow a tribunal in exceptional circumstances to exempt a landlord from providing certain information.
This amendment was necessary because in some cases it was difficult for a landlord to provide information, particularly if there was an agent acting on behalf of the landlord. However, the tribunal will certainly require proof of all monies paid by the tenant, which will protect the tenant from unscrupulous landlords. Section 5 of the Act is therefore amended to clarify aspects pertaining to the issuing of receipts by landlords, namely that the tribunal may in exceptional cases give the necessary leeway.
There is an additional subsection in the Act providing that any costs in relation to contract fees in lease agreements shall only be payable by the tenant upon proof of factual expenditure by the landlord. This will prevent landlords from charging exorbitant costs for a standard contract of lease.
Amendments make provision for the manner in which the landlord must invest the deposit paid by a tenant. The problem encountered in this regard has been that the law provided that the landlord must invest the deposit in an interest-bearing account with a financial institution and must pay the tenant the interest accruing, provided that the rate of interest may not be less than the rate applicable to a savings account with that financial institution. In practice, however, different financial institutions have different interest rates, and the current wording of the provision does not allow for this. A technical amendment is therefore made to refer to such interest rates applicable to the particular financial institution that is used by the landlord.
A new paragraph has been included to deal with any costs associated with compliance with the provisions of the law such as contract fees - as we have mentioned above.
Most importantly, the jurisdiction of the rental tribunals is clarified. The Act is amended by the inclusion of a subsection which gives the tribunal the power to issue spoliation and attachment orders and to grant interdicts. This was not spelled out in the original Act. The spoliation orders and interdicts could be to the benefit of both the landlord and the tenant, whereas the attachment orders would generally be to the benefit of the landlord against the tenant. The rulings of the tribunals must now be enforced in terms of the Magistrates' Courts Act, Act 32 of 1944, and a tribunal must refer any matter that requires eviction to a competent court. The reason for the above inclusion is to ensure that no tribunal has the right to evict in terms of section 26(3) of the Constitution. Only a court may order an eviction. We have therefore amended the law to ensure that we are in line with this.
The Act is further amended to empower the Minister to make regulations. This amendment is necessitated by the need to ensure uniformity throughout the country with regard to procedures followed by tribunals, as well as rulings made by them. In the past, this power was vested in the MEC and this has resulted in a great deal of variation, which is ultimately unworkable.
Unfortunately, in relation to landlords, the common occurrence in which landlords make unlawful lockouts and the shutting off of utilities is now regarded as an offence. Landlords are required to ensure that they comply with the correct legal proceedings at all times, whatever their grievances may be against their tenants.
The Bill is amended by the substitution of some of the subsections so as to vest the power in the Minister to make regulations as compared to the current provisions which enable MECs to make regulations.
Finally, in our view, these changes will bring much-needed changes in the rental housing market which will enable it to be one of the dominant instruments of our policies. As consultations over the Bill revealed, our interactions with the housing sector show that the sector approves and is ready to accept these changes. I therefore introduce the Rental Housing Amendment Bill 2007 to this House. I thank you. [Applause.]