Rental Housing Amendment Bill [B56-2013]: reasons for changes

Meeting report

The Chairperson explained that the former Minister had withdrawn the original Amendment Bill due to his concerns about the Portfolio Committee changes, especially to Section 2 of the Rental Housing Act. The Committee was adamant that the concerns he had raised would not detract from implementation. After a request from the Committee, the former Minister had agreed to return it to Parliament. In the interim, there was a Cabinet change last July which had delayed matters. However, the new Minister also had agreed to bring the Bill back. Unfortunately the Committee had not had an opportunity to interact with the Department in late 2013. The Committee was taking the Bill on now, with the short time available before the end of the Fourth Parliament, because the Bill had already been deliberated by the Committee.

Ms Phindile Ntuli, Deputy Director: Housing Framework Legislation at Department of Human Settlements, read through the Amendments as proposed by the Department.

Section1 was amended to bring the Act in line with the name change of the Department and also provide a definition of “arbitrary eviction” to align the Act with Section 26(3) of the Constitution.

Section 3 was amended to stipulate the duties of Government regarding rental housing.

Section 4 was amended to clearly demarcate the rights and obligations of tenants and landlords.

Section 5 now provides for all lease agreements entered into between tenants and landlords to be in writing.

Section 6 was amended to qualify the application of Chapter 4 and to render the application mandatory to all provinces.

Section 7 of the Act was amended to amplify the provisions on the establishment of the rental Housing Tribunals and the establishment of a Tribunal in every Province mandatory.

Section 9 now increases the composition of members of the Tribunal to seven to ensure that the Tribunal was able to function as two committees.

Section 10 empowers Tribunal to arrange and hold two separate but simultaneous meetings for purposes of effective functioning.

Section 13 now extends the powers of the Rental Housing Tribunals to annul any of its rulings.

Section 14 was amended to make the establishment of Rental Housing Offices in every local municipality mandatory.

Section 15 empowers the Minister to make Regulations after consulting with the relevant Parliamentary Committee and MEC.

Section 16 was amended to enhance the penalty and offences provisions.

Chapter 4 and 5 of the Act had been amended by removing section 15 from Chapter 4 and inserting it under Chapter 5 of the Act to be in line with legislative drafting practices.

The Principal Act was amended by inserting Section 17A providing an appeal process against a decision of the Tribunal. The procedure for lodging an appeal will be prescribed by the Minister by way of Regulations.
The Principal Act had been amended by the substitution of “local authority” with “local municipality” to align with the Local Government Municipal Systems Act.

Discussion
Mr S Mokgalapa (DA) asked that the Department provide specific reasons for the withdrawal of the previous Bill. The bone of contention was the withdrawal after it was passed by this Committee. The Committee needed to hear why there was a withdrawal.

Ms M Borman (ANC) agreed with Mr Mokgalapa. Everything on the Bill was now more user friendly, but the Department needed to go into the nifty-gritty and discuss the differences between the previous withdrawn Bill and the new version.

The Chairperson referred to Section 2 of the 2013 Bill and asked why the Portfolio Committee's version of that clause had been removed. Why was the section not included? She asked what was the Department's view was of the Committee's version of Section 2? An enquiry was to have been made, the Committee needed to hear what the results of that enquiry was. After the withdrawal of the Bill, did the Department receive any further input from the community and could such input be shared with the Committee.

Ms M Njobe (COPE) asked if the Department foresaw problems with the implementation of the Bill, particularly at ground level as it was a very broad Bill (covering every area of rental housing). Also what were the cost implications for implementation of the Bill and would there be budget problems with that.

Mr Khwezi Ngwenya, Acting Chief Director: Legal Services, Department of Human Settlements, said Section 2 was originally a new insertion by the Committee. There were advanced reasons that led to proposals to withdraw the Bill. Part of those were to do an impact analysis of the Section 2 amendment proposed by the Portfolio Committee in which the Committee proposed a number of duties for the Minister. The Department went back and asked how it could do a better implementation when the Bill was approved. The new amendments addressed that.  Another critical amendment was to certain provisions regarding the appeal mechanism. The appeal mechanism in the Bill did allow the Department to do an impact analysis in terms of readiness of the provinces to implement it. The struggle with this particular Act was that some of the provinces did not have the resources to establish a functioning Rental Housing Tribunal. The new amendments now specifically talk about enforcing that each province have a fully functioning Rental Housing Tribunal. The Department had since been working with provinces to establish capacity to implement the Bill.

The Chairperson interjected and asked specifically why the Department had removed Section 2 completely.  Why was it difficult for the Department to implement Section 2? Whose responsibility was it to perform an impact assessment of the Bill? The Department needed to explain whose job and responsibility was it that when legislation was passed it was implemented and did an impact assessment on the implementation and reported back to Parliament. If there was clarity on that then the Committee would be satisfied.

Mr Ngwenya replied that there were various reasons that led to the omission of Section 2. There was consultation with the State Law Advisors regarding the provision who said there were constitutionality elements that may be raised because of the provision.

The Chairperson again asked who was responsible, so that that person could appear in front of the legislature to report on the impact of the legislation. It was the Department that withdrew the Bill; what were the reasons for the Department to withdraw the Bill? The only problematic area for the Committee was the the appeals procedure. The State Law Advisor had sat with the Committee during its deliberations and had understood the position of the Committee regarding Section 2.

Mr Mokgalapa asked on whose lap the Bill sat as it seemed that the Department did not want to take the responsibility. That cannot be as the Committee could not legislate and then nobody followed up if the legislation would have an impact. Section 2 was not an overzealous clause. It was a section that said whoever is responsible should come back to Parliament and report if the Bill was working or not. It was about accountability and responsibility. As legislators, the Committee had to ensure that those in executive authority account. Mr Ngwenya was flip-flopping on the issue. Regarding the appeals procedure, it was referred back to the Committee and it was cleaned up. SALGA had been concerned about the financial implications.

Mr Ngwenya replied that in principle the Department did not have anything against Section 2; it was indeed the responsibility of the Minister to do that. When the Bill was reintroduced it was sent in its current form to the Chief State Law Advisors for them to recertify the Bill. Their input was that Section 2 would be problematic and they therefore could not proceed with the reissuing of the Bill with the provision in there.

Ms Bongiwe Lufundo, Principal State Law Advisor, said Mr Ngwenywa was correct. The Department had referred the Bill to them. It came to the Office of the Chief State Law Advisor as a new process and they had to apply their minds and re-certify it. They had an issue with Section 2 and raised their concerns with the Department and it was referred back to DHS for reconsideration in order to make it work and address their concerns. Thereafter the State Law Advisor would be able to certify the Bill.

Ms Borman interjected and asked that Ms Lufundo specify what those concerns were, so that the Committee could engage on them. The Committee was trying to understand what both DHS and the State Law Advisor were saying but they were not specific on what had happened.

Ms Lufundo said Section 2(2)(e) had been inserted for the Minister to provide legal mechanisms to protect the right of tenants and landlords against illegal actions by the other party. The State Law Advisor's question was did not the Act already have legal mechanism in place to address this matter? In the Bill there was the establishment of Rental Housing Tribunals that were introduced to ensure speedy means of redress for both tenants and landlords. The question was therefore, what other mechanisms were intended?

The Chairperson asked if the content was exactly the same in both clauses. There could be a section in the Bill dealing with this already, but as the Committee deliberated they had found that it was not enough to articulate what was required. Thus, in the opinion of the State Law Advisor, was the sentence exactly the same as the one in the principal Act (so that there would be no repetition). Or could there not have been an insertion to give expression to what the Committee intended.

Ms Lufundo said having the paragraph in the Act would create confusion as another legal mechanism had been created to resolve problems between tenants and landlords.

Mr Mokgalapa said the context was to create a legal mechanism that would ensure and enforce the responsibilities and rights of both the landlord and the tenant, to avoid a toothless Bill being passed. The context was to have a mechanism to enforce, legally, the rights and obligation of both landlord and tenant.

The Chairperson said “redress” was the critical word from the Portfolio Committee’s point of view - to redress the current existing imbalances. Instead of deleting the section, the State Law Advisor should work around that and help the Portfolio Committee to achieve what it wanted to achieve.

Ms Lufundo said they wanted to raise the section as an objective of the Act. But the way it was put in that section made to sound like ad obligation on the Minister to do that.

Ms Borman asked Ms Lufundo to refer the Committee to the section in the Act that was in conflict with Section 2 so they could understand the confusion.

Ms Lufundo said the statement was now included in the Preamble which laid out the objectives of the Act; the section would therefore be duplication.

Ms Borman said she understood that. However. as it was in the Preamble, did it not mean that it had to be spelled out in the Act?

Mr Mokgalapa said the Committee understood the two last sentences in the Preamble - they dealt with redress. But what the Committee was looking for was more explicit legal terms. They needed help from the State Law Advisor on what they were conveying with Section 2.

Ms Njobe said that it could happen that a provision may already be provided for in some other legislation. If that was the case the Department should be able to reference such legislation to the Committee. However, that was not coming through to the Committee. Here was a principle that the Committee wanted to include in the legislation. It was asking the legal minds that it be formulated in a way that would be implementable.

The Chairperson said moving past the blame and reasons for removing Section 2, the Committee was now asking for assistance in giving meaning to that section. Besides this, there were no other problems with the Bill.

Ms Lufundo agreed to create a new clause that would embrace the section. There was another issue with Section 2(2)(5) and (6) from a legal drafting point of view. Their role as drafters was to ensure that the legislation was clear and the enforcer ought to be able to understand what he/she must do. The Section said the Minister must monitor and assess “the impact of the application of this Act…” What was the impact of the application of the Act? The statement was vague.

She said listening to what the Committee had said, what they were asking for was an impact assessment from the Minister. That went without saying, but, for emphasis, if Parliament wanted to include the clause, the way it was stated technically, it was not coming through clearly. Also there were no guidelines on how the Minister would monitor the application of the Act, was the Minister going to go house to house?

The Chairperson asked for the opinion of the State law Advisor: it was a given that the Minister should do an impact assessment of any other legislation. In Ms Lufundo’s opinion, how would the Minister do that? The Bill was specifically dealing with landlords and tenants and regulated issues around the tenant and landlord relationship. Could the State Law Advisor guide the Committee as to what the section was supposed to be saying? How many pieces of legislation had been put into operation and then no feedback was received - even about the Principal Act. No Minister had ever done a door-to-door assessment; therefore the Committee would also not imply that.

Mr Mokgalapa said the Ministers did not have constituencies. They did not do door-to-door. What the Committee was saying was that the Minister has mechanisms he can use to assess the impact of the legislation. The Minister could get information from Rental Tribunals, municipalities or complaints from individuals. Now the question was how then would that feedback come to Parliament. It could be explicitly stated in the Bill when the Minister comes to Parliament whether it was a quarterly, yearly or monthly report.

Ms Njobe said it was the same issue: Parliament wanted something done and unfortunately the legal people were asking how it would be done. It should be not like that. It should be their advising the Committee, where they perhaps find a problem with the legislation in terms of implementing it. Was it implementable? They should tell the Committee if there were reasons why it could not be implemented. The Committee should be seeking help on how the legislation should be enforced and not for the legal minds to ask the Committee how the Minister would perform these duties.

Mr Nathi Mjenxana, Parliamentary Legal Advisor, said that the obligation set out in subsection 5 from a legal perspective was not confusing. Perhaps he did not see eye to eye with the State Law Advisor. Perhaps from a technical perspective it needed to be discussed. But it was just an obligation to the Minister to use his/her monitoring and evaluation mechanisms to bring information to Parliament. And possibly be assisted by Parliament for the legislation amending the Act, to have the desired impact.

The Chairperson asked that the State Law Advisors redraft Section 2 and include it in the proposed amendments to the Amendment Bill as the Committee had reasons for inserting Section 2.

Ms Lufundo agreed to rework the Section as per the requests of the Committee and give effect to what they intended when first included in the withdrawn Bill.

The Chairperson asked if the Department had informed the State Law Advisor since they did not have a comprehensive rental housing strategy. It was difficult to formulate legislation, but this legislation would be a guide for a comprehensive policy. These sections would put pressure on the Department to have a policy that would not be contradictory to the legislation.

Meeting was adjourned.

Appendix: Section 2 as amended by Committee in 2011

2. Section 2 of the principal Act is hereby amended—
(a) by the deletion in subsection (2) of the word ‘‘and’’ at the end of paragraph (c),
the insertion of the word ‘‘and’’ at the end of paragraph (d) and the addition of
the following paragraph:
‘‘(e) provide legal mechanisms to protect the rights of tenants and landlords
against illegal actions by the other party by affording speedy means of redress.’’;
and
(b) by the addition after subsection (4) of the following subsections:
‘‘(5) The Minister must—
(a) monitor and assess —
(i) the impact of the application of this Act on landlords and
tenants, and more specifically the impact on poor and
vulnerable tenants; and
(ii) the performance of Tribunals and Rental Housing Information
Offices;
(b) develop such relief measures and other social programmes as part of
the policy framework on rental housing referred to in subsection
(3), as he or she deems necessary to alleviate hardships that may be
suffered by tenants;
(c) develop programmes, directives and guidelines or amend or
augment the policy framework on rental housing referred to in
subsection (3), in such a manner as he or she sees fit, to facilitate
effective performance by Tribunals and Rental Housing Information
Offices; and
(d) annually report to the National Assembly on the promotion of rental
housing property envisaged in this section and section 3 as well as
on the implementation of the Act.
(6) For purposes of subsection (5), the Minister may define criteria based on
age, income or another form or degree of vulnerability that apply to such
tenants or group of tenants, and amend or augment the policy framework on
rental housing referred to in subsection (3), in such a manner as he or she sees
fit.’’.