SA Affordable Housing July - August 2019 // Issue: 77 | Page 36

LEGAL MATTERS – SPONSORED BY STBB
The Housing Act prevents the voluntarily sale
and transfer of a FLISP subsidy house within
eight years from date of acquisition.
By Gert Minnaar
THE RIGHT TO ADEQUATE HOUSING
In terms of section 26 of the Constitution of the Republic
of South Africa everyone’s right to have access to adequate
housing is recognised.
Section 26(2) describes the state’s obligation regarding
this, as follows:
‘The state must take reasonable legislative and other
measures, within its available resources, to achieve the
progressive realisation of this right.’
This resulted in the promulgation of the Housing Act,
1997 (No 107 of 1997) where Parliament of the Republic
of South Africa recognises that:
• Housing, as adequate shelter, fulfils a basic human need;
• Housing is both a product and a process;
• Housing is a product of human endeavour and
enterprise;
• Housing is a vital part of integrated developmental
planning;
• Housing is a key sector of the national economy; and
• Housing is vital to the socio-economic well-being of the
nation.
NATIONAL HOUSING SUBSIDY PROGRAMMES
The Minister of Housing introduced the Individual Housing
Subsidy Programme in terms of section 3(5) of the Housing
Act as part of the national housing subsidy programme.
These subsidies provide the poor to low and middle-
income households access to government funding for the
following two categories:
• Non-credit linked subsidies: Where the applicant
cannot afford mortgage loan finance, the applicant may
apply for a subsidy to acquire an existing house entirely
out of the subsidy and may supplement this with other
funds that may be available to them.
• Credit linked subsidies: Where the applicant can afford
mortgage loan finance, the applicant may apply for a
subsidy that is linked to credit from a financial
institution.
FINANCE LINKED INDIVIDUAL SUBSIDY
PROGRAMME (FLISP)
When buying a home for the first time households that
earn between R3 501 and R22 000 may apply for a FLISP
subsidy, which, depending on the applicant’s gross
monthly income, may vary between R27 960 and R121 626.
The income of these households is inadequate to qualify
34
JULY - AUGUST 2019
Unpacking the Housing
Act and state subsidies
Gert Minnaar, practising
conveyancer at the Illovo
branch of STBB Attorneys
and serving SAARDA
committee member.
for a home loan from a financial institution for a sufficient
amount to purchase a home, but the once-off FLISP subsidy
enables them to afford it.
This is, in essence, how a credit-linked subsidy operates
as the state’s contribution of a limited housing subsidy,
while the balance of the purchase price is funded by credit
granted by a financial institution.
SECTION 10A(1) OF THE HOUSING ACT
Section 10A(1) of the Housing Act under the heading
‘Restriction on voluntary sale of state-subsidised housing’
is worded as follows:
‘(1) Notwithstanding any provisions to the contrary in
any other law, it shall be a condition of every housing
subsidy, as defined in the Code, granted to a natural person
in terms of any national housing programme for the
construction or purchase of a dwelling or serviced site, that
such person shall not sell or otherwise alienate his or her
dwelling or site within a period of eight years from the
date on which the property was acquired by that person,
unless the dwelling or site has first been offered to the
relevant provincial housing department.’
This applies to the non-credit linked subsidy but is not
restricted to this type of subsidy. It covers every housing
subsidy, which will make this requirement applicable in
respect of a credit linked subsidy too.
The purpose of this section is to prevent a successful
housing subsidy beneficiary from acquiring a subsidy
house or subsidy sectional title unit with government
funding, and then abusing this right by selling it off
immediately to a third party for short-term financial gain,
instead of the beneficiary enjoying the housing benefit for
at least the next eight years.
This requirement led to the inclusion of a title condition
in the title deeds for subsidy houses and subsidy sectional
titles, where the applicants earn R3 500 and less per month
and where the subsidy amount is sufficient to acquire such
a housing product.
This title condition reads:
‘Subject to the following condition imposed in terms of
section 10A of the Housing Act, 1997 (No 107 of 1997), the
within mentioned property shall not, without the consent
of the relevant provincial housing department, be sold or
otherwise alienated within a period of eight years from
date of transfer, unless it has first been offered to the
relevant provincial housing department.’
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