Housing Code
Part 2
Chapter 2: Roles and Functions
Roles & Responsibilities
National government, provincial governments and municipalities each play specific roles in the national housing development process. This chapter explains the provisions in the Housing Act that relate to the roles and functions of the three spheres of government.
2.1 Role and Functions of National Government
National government must establish and facilitate a sustainable national housing development process. This section explains the provisions in the Housing Act that relate to national government.
The primary role of national government is to “establish and facilitate a sustainable housing development process”, after consultation with the nine MEC’s for Housing, and the national organisation representing municipalities (South African Local Government Association, SALGA).
In order to facilitate and establish a sustainable national housing development process, National Government, acting through the Minister of Housing, must carry out a number of key functions. The table that follows, Table 3, sets out these functions. In the right hand column, a brief commentary on the function is provide:
Table 1. Key Functions of National Government
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In order to fulfil the role and functions assigned to national government, the Minister may, in terms of the powers assigned under the Housing Act:
- Institutional framework: establish a national institutional and funding framework for housing development.
- National Housing Budget: negotiate for the national apportionment of the state budget for housing development.
- National housing programmes are:
- The Housing Subsidy Scheme.
- The Guidelines for the Discount Benefit Scheme, to promote home ownership.
- The Hostels Redevelopment Programme policy for the upgrading of public sector hostels.
National institutions are:
- The Mortgage Indemnity Fund (Pty) Ltd (no longer operational).
- The National Housing Finance Corporation.
- The National Urban Reconstruction and Housing Agency.
- The Social Housing Foundation
Multi-Year Plan: prepare and maintain a multi-year national plan in respect of housing development.
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- Obtain Funds: obtain funds for land acquisition, infrastructure development, housing provision and end- user finance
- National Housing Programmes: institute and finance national housing programmes.
- National Institutions: establish and finance national institutions for the purposes of housing development, and supervise the execution of their mandate.
- Housing Sector Performance: evaluate the performance of the housing sector against set goals and equitability and effectiveness requirements.
- Enabling Environment: take any steps reasonably necessary to create an environment conducive to enabling provincial governments and municipalities, the private sector, communities and individuals to achieve their respective goals in respect of housing development and to promote the effective functioning of the housing market.
- Functioning Market: take any steps necessary to promote the effective functioning of the housing market.
1.1 Ministerial Power with respect to Principles
The Minister of Housing is ultimately accountable for government’s adherence to principles. The Housing Act also makes provision for the Minister of Housing to elaborate on existing principles, or to prescribe additional principles by notice in the Government Gazette. (Gazette).
Transparency, accountability and monitoring were identified as key principles of Housing Sector Activity in the policy section of the Code. In this instance, gaps in policy and legislation regarding principles are identified through monitoring. The opportunity for review is provided by assigning the power to the Minister to make amendments. Clear procedures ensure that there is transparency and accountability.
The process for prescribing additional principles or elaborating on existing principles, which is illustrated in the figure below, is as follows:
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- The principle(s) are then prescribed by notice in the Gazette. · The Minister then submits a list of notices published in the Gazette to Parliament for approval within 14 days after the publication of any notice in the Gazette. The list of notices states the number and title of each notice and the number and date of the Gazette in which it was published.
- If Parliament disapproves of any principle, the principle ceases to have effect. However, this does not negate the validity of anything done in terms of the principle before it ceased to have effect. Furthermore, rights or liabilities acquired or incurred in terms of the principle or provision before it ceased to have effect, will not be prejudiced.
Figure 1 provides an illustration of the process for amending principles.
2.2 Role and Functions of Provincial Government
Every Provincial government must do everything in its power to promote and facilitate the provision of adequate housing in its province within the framework of national policy, after consultation with the provincial organisations representing municipalities.
Schedule Four of the Constitution determines that housing is an area of concurrent competence for national and provincial government. This means that provincial government may legislate in respect of housing matters that fall within its provincial boundaries, as long as such legislation does not undermine national legislation. Chapter 1 of Part 1 explains the law of concurrent competence in detail. A critical policy challenge for the governance of housing is for provincial government to exercise its functions and powers in such a way that supports national processes and policies.
Ultimately, the primary role of provincial government is to promote and facilitate the provision of adequate housing in its province, within the framework of national housing policy. In this regard, the functions of Provincial Government include the following:
- Provincial Policy: to determine provincial policy in respect of housing development.
- Provincial Legislation: to promote the adoption of provincial legislation to ensure effective housing delivery.
- Housing Development: to co-ordinate housing development in the province.
- Capacity Support for Municipalities: to take all reasonable and necessary steps to support and strengthen the capacity of municipalities to effectively exercise their powers and perform their duties in respect of housing development.
- Intervention to Perform Municipal Duties: When a municipality cannot or does not perform a duty imposed by this Housing Act, to intervene by taking any appropriate steps in accordance with section 139 of the Constitution to ensure the performance of such duty. The Provincial Executive may issue a directive to the municipality describing the extent of the failure to meet its obligations and stating any steps required to meet its obligations. The said Executive may also assume responsibility for the relevant obligation to the extent necessary to maintain essential national or minimum standards, to prevent unreasonable action by such a municipality, and to maintain economic unity.
- Multi-Year Plan: to prepare and maintain a multi-year plan in respect of the execution in the province of every national housing programme and every provincial housing programme. This must be consistent with national housing policy, broad national housing delivery goals and the guidelines that the Minister approves for the financing of such programmes with money from the South African Housing Fund.
- Municipal Accreditation: to assess applications received from municipalities to be accredited to administer national housing programmes; and also to monitor the performance of accreditation municipalities.
- Provincial Legislatures: to provide mechanisms to maintain oversight over, and to ensure that all provincial executive organs of state are accountable to the legislature. In this regard, the MEC for Housing is obliged, in terms of the Housing Act to report to the provincial legislature annually on the activities of the Provincial Housing Development Board and accredited municipalities.
2.3 Role and Functions of Local Government
Every municipality, as part of its process of integrated development planning, must take all reasonable and necessary steps within the framework of national and provincial housing legislation and policy to ensure that the right to have access to adequate housing is realised on a progressive basis.
In order to fulfil its role, every municipality must carry out the following functions:
- Health and Safety: ensure that conditions not conducive to the health and safety of the inhabitants of its area of jurisdiction are prevented or removed.
- Efficient Services: ensure that services in respect of water, sanitation, electricity, roads, stormwater drainage and transport are provided in a manner that is economically efficient.
- Housing Delivery Goals: set housing delivery goals in respect of its area of jurisdiction.
- Land for Housing: identify and designate land for housing development.
- Public Environment: create and maintain a public environment conducive to housing development which is financially and socially viable.
- Conflict Resolution: promote the resolution of conflicts arising in the housing development process.
- Bulk and Revenue Generating Services: provide bulk engineering services, and revenue generating services in so far as specialist utility suppliers do not provide such services.
- Land Use: plan and manage land use and development.
Housing Development: initiate, plan, co-ordinate, facilitate, promote and enable appropriate housing development in its area of jurisdiction.
1. Powers in respect of Housing Development
An accredited municipality may not evaluate a project application in which it plays the role of developer. In such cases, the project application must be referred to the PHDB for evaluation.
Municipalities participate in national housing programmes by:
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2. Expropriation of Land
The Housing Act assigns the power to municipalities to expropriate land for housing development, if the land cannot be purchased on reasonable terms. The municipality must first obtain the permission from the MEC. Moreover, a notice of expropriation must be published in the Provincial Gazette within six months after the MEC grants permission to expropriate the land. Sections 1, 6 to 15, and 18 to 23 of the Expropriation Act, 1975 (Act No. 63 of 1975), will apply in respect of the expropriation of land by a municipality. These sections elaborate on:
- Issues concerning the property, including: the inspection of the property for purposes of expropriation and notification that the property is to be expropriated.
- Tenure rights, including: passing of ownership in expropriated property and exercise of right to use property and duties of the owner of the property expropriated or which is to be used by the municipality.
- Issues concerning compensation including: offers of compensation; payment of amount offered as compensation; basis on which compensation is to be determined; payment of compensation in respect of rights out of registered leases in respect of property expropriated; determination of compensation by the Supreme Court or by arbitration, in the absence of agreement; discharge of debt secured by mortgage bond and payment of compensation in case of existence of certain unregistered rights; and deposit of compensation money.
- Other financial issues, including: orders as to costs in Supreme Court, effect of application for determination of compensation and of noting of appeal; and payment of certain taxes and other moneys out of compensation moneys.
- Other issues, including: termination of unregistered rights in respect of land expropriated; and withdrawal of expropriation.
In applying the Expropriation Act in this context, the words “Minister” and “state” are replaced by Chief Executive Officer, and municipality respectively.
3. Municipal Accreditation
It is the constitutional responsibility of both national and provincial government to assign to a municipality the administration of matters such as housing if that matter would be more effectively administered at a local level, and if the municipality has the capacity to administer it. In this regard, and in keeping with the spirit of devolution, the Housing Act provides for the accreditation of municipalities to administer national housing programmes. At this stage accreditation is only permitted in respect of the administration of certain instruments of the Housing Subsidy Scheme.
Two levels of accreditation exist in respect of the Housing Subsidy Scheme:
- Level One Accreditation involves the administration of non-credit linked individual subsidies. This is the simplest form of accreditation as subsidies are dealt with in a straightforward manner on an individual basis.
- Level Two Accreditation may be obtained in respect of non-credit linked individual subsidies, project-linked subsidies, project-linked and individual consolidation subsidies, institutional subsidies, and the management of the payouts of residual amounts of non-credit linked subsidies and individual consolidation subsidies. This form of accreditation requires more sophisticated administrative systems to deal with the complexities of the various subsidy mechanisms.
When applying for accreditation, a municipality specifies the level of accreditation for which it is applying. If a municipality is awarded Level Two Accreditation, this also includes accreditation for Level One.
Once accredited, a municipality administers National Housing Programmes and may receive, evaluate and approve or deny applications for subsidies on the basis of its level of accreditation, in its area of jurisdiction. In this regard, it must carry out all the duties assigned to a Provincial Housing Development Board in its administration of national housing programmes. For more information on the Provincial Housing Development Board’s roles in this regard, see Chapter 4 of Part 2 of this Code.
3.1. Procedures for Municipal Accreditation
A municipality is accredited if an application to the MEC for accreditation status is approved. The procedure for accreditation is explained below and set out in Figure 2.
Figure 2. Municipal Accreditation
The Procedures are succinctly as follows:
- A municipality makes an application for accreditation in the manner and form specified by the MEC.
- The MEC appropriately evaluates the capacity of the applicant to administer the national housing programme(s).
- If the MEC is satisfied that the municipality complies with criteria for accreditation (see below), then the MEC approves the application subject to any directions consistent with national policy.
- If the MEC rejects the application, full reasons are provided to the municipality.
- After approval of the accreditation application, the MEC concludes an agreement with the municipality that defines:
- powers, duties, functions and responsibilities assigned to the municipality.
- financing arrangements.
- minimum capacity specification.
- performance standards.
- reporting standards.
- agency fee to be paid by the Provincial Housing Development Board to the municipality for administering each and every subsidy application of subsidy beneficiaries. This fee will be a uniform national fee determined by the Minister of Housing and will be the same as the fee payable to lenders in terms of Chapter 4 of Part 3 of the Code.
- the rights of the MEC in the event of the municipality breaching obligations.
The agreement must be substantially in accordance with the agreement as contained in Annexure A of this Chapter 2 of Part 2 of the Code and be approved by the State Attorney.
- In terms of section 126 of the Constitution of the Republic of South Africa, the agreement takes effect on proclamation thereof by the Provincial Premier in the Provincial Gazette.
3.2 Criteria for Accreditation
The MEC approves an application for accreditation if the municipality complies with accreditation criteria determined by the Minister of Housing.
Until amended or substituted, the following criteria as determined by the Minister of Housing in terms of Section 11B (2) of the Housing Arrangements Act, 1993 apply:
- Municipality: The applicant must be a municipality as defined in section 10B of the Local Government Transition Act, 1993 (Act No. 209 of 1993).
- Capacity: The municipality should have financial, administrative, professional and technological capacity to fulfil its housing responsibilities and to administer the National Housing Programmes.
- Commitment & Track Record: The Council should demonstrate its total commitment to administering national housing programmes in such a way that it meets the housing needs of all the homeless inhabitants of its area of jurisdiction. In this regard, the Council’s proven track record of initiatives and involvement in housing provision and/or community development in its area of jurisdiction will be a recommendation. Furthermore, the Council must give a commitment that its members and officials shall participate in any national or provincial training programme.
- Appropriateness: The particular level of the municipality should be appropriate for the administration of the national housing programme, as opposed to some other level of government.
- Jurisdiction: There must be a clearly defined area of jurisdiction. Municipalities that have concurrent areas of jurisdiction must, before one of them applies for accreditation, conclude an agreement with the other in which it is specified which local authority will apply for accreditation and at what level.
- Administration: The applicant must have a separate accounting system and bank account for housing funds, transferred in terms of the accreditation agreement.
- Directives: The applicant must comply with any other directives that the MEC may determine, which are not inconsistent with National Housing Policy as determined by the Minister.
- Integrated Development: The applicant must demonstrate that it promotes integrated development. In this regard, the applicant must have approved land development objectives as set out in section 28 of the Development Facilitation Act (DFA), 1995, or an MEC approved business plan and programme for land development which is consistent with Chapter One of the DFA.
In addition, the Provincial MEC for Housing must satisfy himself/ herself that in the case of level one accreditation applications, the municipality has:
- computer linkage to the national housing database and to the various deeds offices in the Republic of South Africa.
- a designated housing office, accessible to the general public, from which it will give advice and receive non- credit linked individual subsidy applications.
- a sufficient number of staff members who are fully conversant with the Housing Subsidy Scheme to enable compliance with administrative functions and obligations.
- a housing sub- committee of the Council to attend to matters in an effective and expeditious manner.
- financial control mechanisms that are adequate and ensure the integrity of funds that are received and disbursed by the municipality.
- reporting mechanisms required to monitor and evaluate the activities of the municipality.
In the case of Level Two accreditation, the Provincial MEC must satisfy himself/ herself that the municipality:
- complies with the requirements for level one accreditation
- has prepared the land development objectives envisaged in Section 28 of the Development Facilitation Act, or a business plan and programme for housing development, and that it has obtained the approval of the relevant MEC in respect of those objectives or business plan and programme;
- has access to the appropriate professional expertise required to:
- evaluate the town planning of any proposed project
- evaluate the engineering designs and specifications in respect of any proposed project and to inspect and supervise the progress made by the developer in implementing any particular project
- evaluate designs, specifications and cost of any particular top structures to be constructed (in the case of a project- linked subsidy), or of any particular upgrading or improvement work to be done (in the case of an institutional subsidy application or a consolidation project) and to inspect and supervise the progress made by the developer in implementing the required work
- ensure that the required agreements between the local authority and the developer are prepared and signed
- handle the management of the housing funds allocated to it and to evaluate both the feasibility of a project and the financial capacity of a developer
3.3 Powers and Duties of an Accredited Municipality
The powers and duties of an accredited municipality are the same as those of the Provincial Housing Development Board with respect to the administration of national housing programmes. These are set out in Chapter 4 that follows.
3.4 Management of Funds
As an accredited municipality, the municipality has the power to consider, approve, and finance the relevant dimensions of the Housing Subsidy Scheme. There are clear rules for the management of housing funds by accredited municipalities:
- The MEC allocates funds out of the Provincial Housing Development Fund to the municipality after consultation with the Provincial Housing Development Board.
- The accounting officer of the Provincial Housing Development Fund transfers funds to the municipality, but remains the accounting officer of the funds.
- Funds are transferred to a separate Municipal account that is used solely for disbursements in connection with the administration of the Housing Subsidy Scheme.
- In paying out approved housing subsidy funding to a vendor, the municipality acts as the agent for the Provincial Administration, in terms of the requirements of the Value Added Tax Act, 1991 (Act No. 89 of 1991).
- The Chief Executive Officer of the accredited municipality submits detailed statements to the provincial accounting officer. Statements must be submitted as soon as possible, but not later than 31 May of each year for the previous financial year. Statements show the results of the previous year's transactions and the balance sheets in respect of the separate housing subsidy account of the municipality and are signed by the Chief Executive Officer.
- The books and statements of account and balance sheets are audited by the Auditor-General. All books, registers, and documentation are made over to the Auditor-General on request for the purpose of examination.
- In the performance of its functions, the municipality carries out the policy directives of the MEC consistent with national housing policy.
3.5 Incorporation with Provincial Financial Statements
Financial Statements are submitted by the accredited municipality to the provincial accounting officer by 31 May of each year. The Provincial accounting officer incorporates these statements with the provincial statements as soon as possible, but not later than 31 August of each year, as required by Provincial legislation.
3.6 Reporting, Monitoring and Evaluation
The accredited municipality reports to the MEC as requested.
The MEC regularly reviews the accredited municipality to monitor performance against the criteria for accreditation. If a municipality fails to perform in terms of criteria, the MEC intervenes and takes the steps necessary to ensure adequate performance.
If requested to do so by the MEC, an accredited municipality must report to the MEC on the activities of the municipality exercised in terms of the accreditation approval.
3.7 General Provisions
Where Level One accreditation is granted, the MEC of Housing allocates a budget for the allocation of subsidies to the municipality, after consultation with the Provincial Housing Development Board. The municipality then accepts applications for non- credit linked individual subsidy applications and considers and deals with such applications in terms of Chapter 4 of Part 3 of the Code. The municipality advises the Provincial Housing Development Board of all subsidies approved on a monthly basis and requests payment of the amount of approved subsidies into the separate housing banking account maintained by the municipality. The municipality then pays these amounts into the trust accounts of the various conveyancers appointed by it. Thereafter, the municipality ensures that transfers take place and that conveyancers deliver to it the reconciliations envisaged in Chapter 4 of Part 3 of the Code. Any interest received in respect of the amount of the approved subsidies is to the benefit of the relevant Provincial Housing Development Fund. In the case where the Provincial Housing Development Fund is not yet established, such interest is for the benefit of that portion of the South African Housing Fund that has been made available to the Provincial Administration concerned.
Where Level Two accreditation is granted to a municipality:
- the relevant MEC will, after consultation with the Provincial Housing Development Board, allocate a budget to it in respect of the types of subsidies for which it is accredited (non credit linked individual subsidies and project linked subsidies and/or project linked consolidation subsidies and/or institutional subsidies and/or the management of the payouts of residual amounts of non credit linked subsidies and individual consolidation subsidies);
- the municipality will administer non credit linked individual subsidies in accordance with Chapter 4 of Part 3 of this Code.
- The municipality will receive project applications for approval and will consider and deal with such applications in terms of Chapters 3, 5 or 6 of Part 3 of this Code, whichever is applicable. However, a municipality that is accredited to receive project applications for approval may not itself act as developer unless such project has been approved by the Provincial Housing Development Board. Applications in respect of which the municipality has a pecuniary or other vested interest should also be approved by the Provincial Housing Development Board.
- The municipality will administer the management of the payouts of residual amounts of non credit linked subsidies and individual consolidation subsidies in accordance with the guidelines as contemplated in Chapters 4 and 5 of Part 3 of the Code.
If a project is approved, the municipality obtains, on a cash flow basis, the funds required from the provincial accounting officer to make progress draws to the developer. The municipality also receives, evaluates and either approves or declines applications made by individuals who are participating in the approved projects concerned. The municipality complies at all times with the provisions of Part 3 of the Code and such policy directives, if any, of the MEC which are not inconsistent with National Housing Policy.
It is envisaged that:
- any particular MEC who accredits any particular municipality will require that municipality to ensure that it meets the accreditation criteria as set out herein at all times, whilst it exercises any particular delegated functions
- the MEC in question will be entitled to cancel the agreement between it and the municipality and will accordingly be entitled to cancel the municipality’s accreditation, if the municipality fails to continue to comply with the terms and conditions of the agreement.
The accreditation of municipalities by the MEC will be subject to the submission of a business plan and programme for housing development to the satisfaction of the PHDB. For purposes of formulating a business plan and housing development programme, municipalities must:
- conduct a socio-economic survey of the inhabitants of its area of jurisdiction and of the conditions under which such inhabitants are housed;
- assess the need for housing with appropriate services, and the upgrading of existing housing and services to remedy conditions not conducive to the health and safety of the inhabitants of its jurisdiction and to meet the expected growth of the population; and
- assess the availability of land for housing development in order to meet estimated needs within a reasonable period.
The business plan and programme must, as a minimum:
- define, quantify and cost the goals the local authority intends achieving in terms of such plan and the time frame for its implementation;
- specify the roles and functions it foresees will be fulfilled by the respective role players in housing development and related fields in terms of such a plan;
- specify the financial and other resources required to implement such a plan and the steps to be taken to procure such resources;
- define the housing development or other projects that such plan will be comprised of and the sources of funding in respect of each project; and
- prepare a cash flow analysis of the rate at which funds will be spent on each of the projects and out of each source of funding.
ANNEXURE A
AGREEMENT RELATING TO THE ACCREDITATION OF A MUNICIPALITY TO ADMINISTER CERTAIN NATIONAL HOUSING PROGRAMMES
1. PARTIES
1.1. The parties to this agreement are -
1.1.1 ________________________________________________________;
1.1.2 ________________________________________________________.
1.2. The parties agree as set out below.
2. INTERPRETATION
2.1 In this agreement, unless inconsistent with or otherwise indicated by the context -
2.1.1 "accredited programme/s" means the National Housing Programme/s for which the municipality has been accredited by the MEC, as will appear from Appendix 1
2.1.2 "accounting officer" means the officer of the Provincial Administration designated as the accounting officer of the Provincial Housing Development Fund in terms of section 12(2) (b) of the Act;
2.1.3 "the Act" means the Housing Act, 1997 (Act No. 107 of 1997) and includes any amendments thereof from time to time;
2.1.4 "the/this agreement" means the agreement as set out in this document;
2.1.5 "the financial year" means the financial year of the Public Service which extends from 1 April of the one year until 31 March of the next year;
2.1.6 "effective date" means the date upon which this agreement is proclaimed in the Provincial Gazette by the Provincial Premier in terms of the provisions of Section 126 of the Constitution of the Republic of South Africa;
2.1.7 "the Housing Board" means the ________________ Housing Development Board established in terms of section 8 of the Housing Act or its successor in function;
2.1.8 "the Housing Code" means the Code published by the Department of Housing containing its national Housing Programmes, and any amendments thereof from time to time;
2.1.9 "the accreditation criteria" means the criteria determined by the Minister in terms of section 10(2)(a) of the Act, as described in section 3.2 of Chapter 2 of Part 2 of the Housing Code;
2.1.10 "MEC" means the Member of the Executive Council of the Province responsible for Housing matters in the province;
2.1.11 "the Minister" means the National Minister of Housing;
2.1.12 "municipality" means the Municipality of ______________, being a municipality as defined in section 10(B) of the Local Government Transition Act, 1993 (Act No. 209 of 1993), being the party indicated next to 1.1.2 above, or its successor in title;
2.1.13 "National Housing Programmes" means any national policy framework to facilitate housing development as defined in section 1 (xii) of the Act and instituted in terms of section 3 (4) (g) of the Act or is deemed to be instituted under the aforementioned section in terms of section 3(5) of the Act;
2.1.14 "the parties" means the Provincial Administration and the municipality;
2.1.15 "the Provincial Administration" means the Provincial Administration of the Province of ________________, herein represented by the MEC responsible for housing ____________________________________, he/she having been duly authorised by a decision of the executive council, being the party indicated next to 1.1.1 above;
2.1.16 "beneficiary" means a person who qualifies for a subsidy as contemplated in Chapter 2 of Part 3 of the Housing Code;
2.1.17 "signature date" means the date upon which this agreement is signed by the party signing last in time;
2.1.18 any reference to the singular includes the plural and vice versa;
2.1.19 any reference to natural persons includes legal persons and vice versa.
2.2 The clause headings in this agreement have been inserted for convenience only and shall not be taken into account in its interpretation.
2.3 Words and expressions defined in any sub-clause shall, for the purpose of the clause of which that sub-clause forms part, bear the meaning assigned to such words and expressions in that sub-clause.
2.4 If any provision in a definition is a substantive provision conferring rights or imposing obligations on any party, effect shall be given to it as if it were a substantive clause in the body of the agreement, notwithstanding that it is only contained in the interpretation clause.
2.5 This agreement shall be governed by and construed and interpreted in accordance with the law of the Republic of South Africa.
3. INTRODUCTION
3.1 The municipality has applied to the MEC for the accreditation of the accredited programme/s in terms of section 10 of the Act.
3.2 The MEC has satisfied him/herself that the municipality complies with the accreditation criteria determined by the Minister.
3.3 The MEC has agreed to accredit the municipality for the purpose of administering the accredited programme/s. In terms of section 126 of the Constitution of the Republic of South Africa, the MEC may assign any power or function that is to be performed in terms of an Act of Parliament or a Provincial Act to a municipality. Such an assignment -
3.3.1 must be in terms of an agreement concluded between MEC and the municipality;
3.3.2 must be consistent with the Act in terms of which the relevant power or function is exercised or performed;
3.3.3 takes effect upon proclamation in the Provincial Gazette.
3.4 The parties accordingly agree as set out hereinafter.
4. ACCREDITATION
The MEC hereby, with effect from the effective date, accredits the municipality to administer the accredited programme/s. In respect of the accreditation, the parties agree that -
4.1 the municipality is entitled to administer the accredited programme/s;
4.2 the accreditation is subject to the directives of the MEC consistent with national housing policy as set out in section 10(3)(a) of the Act;
4.3 the municipality shall exercise such powers and perform such duties of the Housing Board as are necessary for the administration of the accredited programme/s as set out in section 10(3)(b) of the Act.
5. OBLIGATIONS OF THE PARTIES
In respect of the accreditation programme/s the parties agree that -
5.1 the municipality shall administer the accredited programme/s strictly in accordance with Part 3 and section 3 of Chapter 2 of Part 2 of the Housing Code;
5.2 the Provincial Administration shall exercise such powers and perform such duties as are necessary to be performed by the Provincial Administration in terms of Part 3 and section 3 of Chapter 2 of Part 2 of the Housing Code.
6. FINANCIAL MATTERS
6.1 The accounting officer shall be the accounting officer of all funds transferred to the municipality in terms of the provisions of this agreement.
6.2 The municipality shall -
6.2.1 at all times maintain a separate bank account and set of accounts for housing funds.
6.2.2 pay any interest received in respect of non-credit linked individual subsidies to the Provincial Housing Development Fund. In the case where the Provincial Housing Development Fund is not yet established, such interest is payable to that portion of the South African Housing Fund that has been made available to the provincial Administration concerned. Such interest shall be paid over in conjunction with the reconciliation contemplated in clause 7.2.3 of this agreement.
6.2.3 within 2 (two) months of the end of each financial year, i.e. or before 31 May, submit detailed statements signed by the chief executive officer of the municipality showing the results of the previous year's transactions and the balance sheets in respect of the accounts referred to in 6.2.1 above to the accounting officer.
6.2.4 the accounting officer must within 5 (five) months after the end of the financial year, incorporate such statements and balance sheets into the statements and balance sheets required to be prepared by that officer in terms of any applicable provincial legislation.
6.3 The parties record that the Auditor-General -
6.3.1 shall audit the bank account and set of accounts of the municipality as contemplated in 6.2.1 above;
6.3.2 be entitled to require any person to make available for examination all books, registers and documents in his or her possession or under his or her control which would, if required by the Auditor-General, facilitate the carrying out of such an audit, and the parties hereby undertake to make available such books, registers and documents on request by the Auditor-General.
7. PERFORMANCE
7.1 A municipality accredited to administer any of the national housing programmes in terms of this agreement shall maintain the capacity necessary to administer that national housing programme/s, and in particular continue to comply with the accreditation criteria. In this regard the parties agree that the MEC shall be entitled at any time to request proof that the municipality is complying with the relevant accreditation criteria and the municipality shall be obliged to provide that proof within 30 (thirty) days after such request.
7.2 The municipality shall -
7.2.1 in the performance of its functions contemplated in this agreement, carry out the policy directives of the MEC consistent with national housing policy, which directives will be reduced to writing and incorporated in this agreement;
7.2.2 in the performance of its functions contemplated in this agreement, carry out the rules of any applicable national housing programme;
7.2.3 on a monthly basis, and by no later than 15 (fifteen) days after the end of each and every calendar month, deliver a reconciliation to the accounting officer providing full details of the following transactions during the month in question -
7.2.3.1 the amount of all approved subsidies;
7.2.3.2 the amount of all payments made to the municipality by the accounting officer in accordance with the terms of this agreement;
7.2.3.3 the amount paid by the municipality to conveyancers in accordance with the terms of this agreement;
7.2.3.4 the interest that has accrued on funds administered by the municipality;
7.2.3.5 the amount of remuneration due to the municipality in accordance with the provisions of 8 below;
7.2.3.6 the balance between the amounts contemplated in 7.2.3.4 and 7.2.3.5 above.
8. AGENCY FEE
8.1 In consideration for the performance of the obligation assigned to it in terms of this agreement, the municipality shall receive an agency fee. In respect of the agency fee the parties agree that -
8.1.1 the fee shall be a uniform national fee determined by the Minister from time to time;
8.1.2 the fee shall be payable for each subsidy administered by the municipality in accordance with the provisions of this agreement;
8.1.3 the Provincial Administration shall pay the fee for each subsidy in respect of which subsidy a beneficiary has received transfer of the relevant property, within 15 (fifteen) days after receipt by it of the reconciliation contemplated in 7.2.3 above. The Provincial Administration, in paying the agency fee, shall be entitled to offset the interest to which it is entitled as contemplated in 7.2.3.4 above against the amount it owes the municipality as contemplated in 7.2.3.5 above.
9. BREACH
In the event of any of the parties, ("the defaulting party") committing a breach of any of the terms of this agreement and failing to remedy such breach within a period of 30 (thirty) days after receipt of a written notice from another party ("the aggrieved party"), calling upon the defaulting party so to remedy, then the aggrieved party shall be entitled, at its sole discretion and without prejudice to any of its other rights in law, either to claim specific performance of the terms of this agreement or to cancel this agreement forthwith and without further notice, claim and recover damages from the defaulting party.
10. NOTICES AND DOMICILIA
10.1 The parties choose as their domicilia citandi et executandi their respective addresses set out in this clause for all purposes arising out of or in connection with this agreement at which addresses all processes and notices arising out of or in connection with this agreement, its breach or termination may validly be served upon or delivered to the parties.
10.2 For purposes of this agreement the parties' respective addresses shall be -
10.2.1 the Provincial Administration at _______________________
________________________________________________
facsimile number__________________________________
10.2.2 the municipality at _________________________________
________________________________________________
facsimile number__________________________________
or at such other address in the Republic of South Africa of which the party concerned may notify the others in writing provided that no street address mentioned in this sub-clause shall be changed to a post office box or post restante.
10.3 Any notice in terms of this agreement shall be in writing and shall -
10.3.1 if delivered by hand be deemed to have duly been duly received by the addressee on that date of delivery;
10.3.2 if posted by prepaid registered post be deemed to have been received by the addressee on the 8th (eighth) day following the date of such posting;
10.3.3 if transmitted by facsimile be deemed to have been received by the addressee on the day following the date of dispatch;
unless the contrary is proved.
10.4 Notwithstanding anything to the contrary contained or implied in this agreement, a written notice or communication actually received by one of the parties from another including by way of facsimile transmission shall be adequate written notice or communication to such party.
11. WAIVER
11.1 The waiver (whether express or implied) by either party of any breach of the terms or conditions of this agreement by another party shall not prejudice any remedy of the waiving party in respect of any continuing or other breach of the terms and conditions hereof.
11.2 No favour, delay or relaxation or indulgence on the part of any party in exercising any power or right conferred on such party in terms of this agreement shall operate as a waiver of such power or right nor shall any single or partial exercise of any such power or right preclude any other or further exercises thereof or the ex waiver (whether express or implied) by either party of any breach of the terms or conditions of this agreement by another party shall not prejudice any remedy of the waiving party in respect of any continuing or other breach of the terms and conditions hereof.
11.3 No favour, delay or relaxation or indulgence on the part of any party in exercising any power or right conferred on such party in terms of this agreement shall operate as a waiver of such power or right nor shall any single or partial exercise of any such power or right preclude any other or further exercises thereof or the exercise of any other power or right under this agreement.
11.4 The expiry or termination of this agreement shall not prejudice the rights of either party in respect of any antecedent breach or non-performance by the other party of any of the terms or conditions hereof.
12. WHOLE AGREEMENT
This agreement constitutes the whole agreement between the parties as to the subject matter hereof and no agreements, representations or warranties between the parties regarding the subject matter hereof other than those set out herein are binding on the parties.
13. VARIATION
No addition to or variation, consensual cancellation or novation of this agreement and no waiver of any right arising from this agreement or its breach or termination shall be of any force or effect unless reduced to writing and signed by all the parties or their duly authorised representatives.
14. RELAXATION
No latitude, extension of time or other indulgence which may be given or allowed by any party to the other parties in respect of the performance of any obligation hereunder, and no delay or forebearance in the enforcement of any right of any party arising from this agreement, and no single or partial exercise of any right by any party under this agreement, shall in any circumstances be construed to be an implied consent or election by such party or operate as a waiver or a novation of or otherwise affect any of the party's rights in terms of or arising from this agreement or estop or preclude any such party from enforcing at any time and without notice, strict and punctual compliance with each and every provision or terms hereof.
SIGNED at ________________________ on _________________________
AS WITNESS:
For:________________________
__________________________________
__________________________________ __________________________
(Names of witness in block letters) Duly Authorised
SIGNED at ________________________ on _________________________
AS WITNESS:
For:________________________
__________________________________
__________________________________ __________________________
(Names of witness in block letters) Duly Authorised
APPENDIX 1
ACCREDITED PROGRAMMES
HOUSING SUBSIDY SCHEME
Mark the appropriate programme/s with a X
Non-credit linked individual subsidy;
Project Linked subsidy;
Project Linked consolidation subsidy;
Institutional Subsidy;
Management of payouts of residual amounts of non-credit linked subsidies;
Management of payouts of residual
Amounts of individual consolidation subsidies