SAARDA: Letter from the Chair

2020-11-06T06:59:18+00:00November 3rd, 2020|News|

With this very eventful year drawing to a close, and the economy slowly opening again it is time for us to get together for a golf day and our AGM. It was just the other day that our first scheduled golf day was cancelled due the threat of a worldwide pandemic.

Little did we know how it would affect our lives and the way we do things. With many institutions and organisations working from home and in cyber space, our industry is still a ‘no work no pay’ economy and thus very dependent on the economy reopening back to normal. During lockdown we lobbied hard for the initial opening of the Deeds Office and then the construction industry.

We thank Anton Crouse and Cosmopolitan for their very active role they played during lockdown. We also thank all the members and industry related businesses who assisted and participated in the survey giving us factual information to present to Government and the President’s office in support of our plight. We also thank Michael Page and Gert Dippenaar for their assistance in finalising final content, comments, and proposals to Government in very short and urgent turnaround timelines during Level 5.

We also became part of the Covid -19 Construction Rapid Response Task Team, along with 30 other organisations in the Construction Industry, to collectively address the issues facing the Construction Industry. Although the primary function of the Team was to address Covid issues, the team will have a continued function and will in future be known as the Construction Alliance of South Africa (CASA). One of the positives out of Covid was that the Development industry stood together in the interest of the Industry and realise that there is a major role to play in the future for organisations like SAARDA.

At present we are still faced with enormous challenges while things are slowly moving back to ‘normal’. The Government announced that they are injecting large sums into Infrastructure that will certainly unlock several pipeline developments. The President also warned the ‘Construction Mafia’ that Government will act against the perpetrators. We attach a link to of the contact list of the dedicated Police assigned to this special task force for your attention.

Just to ensure that we do not become complacent numerous Government departments announced certain proposed policies and new billing guidelines that will influence our Industry:

  • The new NHBRC Bill 
    We lodged our comments and objections to the Department of Human Settlements and await engagement or the final Bill publication.
  • The New proposed Fiscal Finance Bill
    The comment and objection was due during Covid and on hold during the State of Disaster. SAARDA will draft the comments and objections herein.
  • The JHB proposed Tariff of Charges – Development Planning
    The report that deals with these proposed tariffs states:

“It is proposed that fees be charged for ad hoc applications, in terms of Section 7(6) and 14 (1A) of the above mentioned Act, for provisional authorization to commence building work, as well as occupancy of buildings, before the final approval of the building plans. These applications place a major additional burden on the current staff capacity. The last update was in July 2019.”

Firstly, these applications are not “ad hoc” applications as they happen as regularly as any other application allowed under the said Act and the impression is created that it is applications that wastes the officials time and therefore a fee should be charged. A fee for a section 7(6) and for a section 14(1)A has always been charged. It is nothing new. What “major additional burden” it places on the current staff is a ridiculous statement to make as it is part of the current officials’ job to consider these applications which are not “out of the ordinary” applications.

Secondly, and of more concern is the fact that the current fee for a section 7(6) is R5 545-00 and for a section 14(1)A is R4 150-00. What the tariffs propose now is under section 7(6):

  • For a first application: 50% of the building plan fees paid.
  • For a second application: 40% of the building plan fees paid; and
  • For a third and last application: 35% of the building plan fees paid.

Let’s see how this plays out in practice: For a current big housing development where the building plan submission fees work out to, for example, R500 000-00, to apply for a section 7(6) would now, as proposed, amount to R250 000-00 for a first application compared to the current fee of R5 545-00. That is a 4 500% increase! So, a section 7(6) application that often gets extended three times when it is a big development will now cost a developer an additional R625 000. This was not highlighted in the report at all.

The same is proposed with a section 14(1)A application.
(Thank you to Alwyn Nortje for his input.) 

Mogale City Bulk Services Policy – Feedback
An Engineer had the following comments: “I believe the document is more reasonable than the status quo and should by right be less than the original Bulk Services Contributions for Mogale.

From my understanding of the document, the Professional Engineer will determine the Bulk Services Cost, based on the provided formulas, in which the Municipality will accept or object, and will be based on current construction cost rates, which will be updated annually.

It also seems that they have excluded the infrastructure backlogs from the total cost, which also reduce the total cost for Bulk Services Contribution.

In addition to the cost, it’s stated in the document, for example under the roads section that the cost per lane figures would be provided within the TMH17 South African Trip Data Manual, September 2012, but when looking in the TMH17 Chapter 3, it states: “The cost rates required to estimate costs are not provided in this manual but will be published and updated by municipalities” Therefore I believe the Municipality will have rates which they would provide us, unfortunately this was not included in the provided document.
Furthermore, please see additional points of interest throughout the document:

  • Item 4.4: “The development charges should be calculated by each developer through an appointed professional engineer as well as signed-off and is paid by the developer not the Municipality. The municipality will confirm the amount…”
  • Item 7-8: “Should the set off value described here be greater than the total Development Charge for bulk engineering services for all phases of a development, the developer shall be responsible for the additional cost. “
  • Item 6.3.1-4: “An applicant may, in agreement with the municipality or service provider, install any external engineering service instead of payment of the applicable development charges…”
  • Item 7-1: Both bulk and link engineering services are included as external engineering services.

For a copy of the draft please contact me to send to you. Please also forward your comments and the impact that this Bill may have on your business to me.

We are aware that there are still numerous problem areas that need to be addressed but we realise that SAARDA cannot get involved in every area of concern. We do however endeavour to address matters where there is a general industry issue like:

  1. The delays at the Cape Town Deeds office that takes 6 weeks from lodgement.
  2. City of Tshwane failure to issue clearance certificates.
  3. NHBRC adjustments for lodgement.
  4. Ekurhuleni failure to issue Section 28 certificates.

We trust that we resolve these matters through constructive engagement with the relevant authorities, alternatively with the Provinces or Ministries involved.

We hope to see everyone at Randpark on the 25th of November. Please book in advance as seats are limited.

Please continue to stay SAFE!

Kind Regards,

Michael Hartman (B. Proc)
Chairman

Michael Hartman, property developer, and chairman of the SA Affordable Housing Developer’s Association. Image credit: M Hartman

Michael Hartman, property developer, and chairman of the SA Affordable Residential Developer’s Association. Image credit: M Hartman