Social Housing Act, 2008 (Act No. 16 of 2008)RegulationsSocial Housing RegulationsChapter 2 : Applications, accreditation, qualifying criteria3. Qualifying criteria for accreditation of social housing institutions |
| (1) | The three (3) main categories of social housing institutions that the Regulatory Authority shall consider accrediting are— |
| (a) | corporated entities that conduct its affairs on a non-profit basis; |
| (b) | municipal entities; and |
| (c) | housing co-operatives. |
| (2) | The qualifying criteria that must be applied by the Regulatory Authority for purposes of accreditation as a social housing institution are that the institution must— |
| (a) | be constituted in the appropriate legal form, as contemplated in subregulation (3); |
| (b) | with the exception of municipal entities, that the founding documents must indicate that profits will not be distributed to members and that it can only be used to further social housing, as contemplated in subregulation (4); |
| (c) | conduct its affairs in compliance with the principles of good governance, as contemplated in subregulation (5); |
| (d) | have a business plan which illustrates financial sustainability, as contemplated in subregulation (6); |
| (e) | promote effective tenant management, as contemplated in subregulation (7); |
| (f) | promote and ensure efficient property management, as contemplated in subregulation (8); and |
| (g) | have property development plans, as contemplated in subregulation (9). |
| (3) | In order to comply with the criteria of appropriate legal form, the applicant must be— |
| (a) | a company having a share capital, whether public or private; |
| (b) | a company limited by guarantee or not for profit in terms of the Companies Act, 2008 (Act No. 71 of 2008); |
| (c) | a co-operative registered as a housing cooperative under the Co-Operative Act, 2005 (Act No 14 of 2005); |
| (d) | a share block company as defined in the Share Blocks Control Act, 1980 (Act No. 59 of 1980); |
| (e) | a communal property association registered as such under section 8 of the Communal Property Associations Act, 1996 (Act No. 28 of 1996); |
| (f) | a voluntary association which in terms of its constitution is a juristic person with legal personality distinct from its members; and |
| (g) | a trust. |
| (4) | With the exception of municipal entities, in order to comply with the criteria of not for profit, the founding documents of the applicant institution must provide that— |
| (a) | the applicant's income and assets, however derived, must be applied solely to advance its main object, and no portion thereof shall be paid or transferred, directly or indirectly, by way of dividend, bonus, or in any other manner, to (as may be applicable to the form of institution concerned) any founder, member, shareholder, director, trustee, beneficiary of or holder of any interest direct or indirect in the institution, with the exception only of payments in good faith of reasonable remuneration for goods or services actually delivered or rendered to or at the direction of the applicant; |
| (b) | on its winding-up, deregistration or dissolution of the applicant, its assets remaining after the satisfaction of all its liabilities shall be given or transferred to one or more other social housing institutions, to be determined by the members, shareholders or trustees of the applicant, failing which to be determined by the High Court at or before the time of its winding-up, deregistration or dissolution; and |
| (c) | applicants that are municipal entities must not distribute any profits to members and such profits must be used to advance social housing. |
| (5) | In order to comply with the criteria of good governance, the applicant must have the following arrangements in place: |
| (a) | as its main object the provision of rental or co-operative housing options for the low to medium income households (excluding immediate individual ownership and a contract as defined under the Alienation and Land Act, 1981 (Act No 68 of 1981), on an affordable basis, ensuring quality and maximum benefits for residents, and the management of its housing stock over the long term; |
| (b) | the applicant must be independent from other entities except to the extent that it is a municipal owned entity or that it may be controlled as a subsidiary by another social housing institution; |
| (c) | comply with the law applicable to its business activities; and |
| (d) | be governed by a Governing body consisting of appropriately skilled and experienced persons effectively leading the institution; |
| (e) | decision making— |
| (i) | independent chairperson; |
| (ii) | policies, procedures and delegation for the CEO and staff outlining how the governing body exercise control over significant decisions; and |
| (iii) | consider reports that inform decision making in relation to the following; financial status, resident/client management and support services, property management, project development and any other reports to inform decision making; |
| (f) | legal compliance— |
| (i) | a legal compliance report that indicates how the social housing institution complies with all legal, statutory and contractual requirements; |
| (ii) | a report that indicates how the social housing institution complies with the new Companies Act and King (iii) guidelines; |
| (iii) | a description of how the social housing institution undertakes audits of its compliance and legal requirements; |
| (iv) | co-operate with the Regulatory Authority in the discharge of its regulatory functions; and |
| (v) | accept accountability for the actions of subsidiaries and other parties undertaking work on its behalf and falling 'within the Regulatory Authority's jurisdiction; |
| (g) | a business strategy with objectives supporting its main object of providing social housing, the strategic plan must include a purpose which links to broader policy, strategic goals that links to performance indicators, annual business operational plan, budget including the provision for an annual review; |
| (h) | effective governance— |
| (i) | an effective governance arrangement that deliver the aims, objectives and intended outcomes in an effective, transparent and accountable manner; and |
| (ii) | clear roles, responsibilities and accountabilities for the board, chair and chief executive and produce an annual assessment of effectiveness of the arrangements; |
| (i) | integrity standards— |
| (i) | a rigorous anti-fraud and anti-corruption system in place that deals with reporting, investigation, referral and allegation of fraud, corruption and criminal conduct; |
| (ii) | a code of conduct for the governing body and staff that provides for a written undertaking to comply with it, including systems that deals with the breach thereof; and |
| (iii) | a conflict of interest policy and system to deal with conflicts; |
| (j) | reputation of social housing sector— |
| (i) | to maintain the highest standards of ethical conduct in business dealings with other organisations and individuals; |
| (ii) | should not bring social housing into disrepute; and |
| (iii) | should not discriminate against any person or persons on any of the grounds set out in section 9 of the Constitution, including individuals affected by HIV & AIDS and individuals with special needs; |
| (k) | adequate system of risk management to identify and mitigate key risks; and |
| (l) | organisation— |
| (i) | staffing and costs. The Regulatory Authority to set indicators at level of rule and benchmarks which will be revised periodically for publication; |
| (ii) | adequate and rigorous operational policies and procedures, the detail of which is contained in the rules; and |
| (iii) | collect information on the performance of the full range of services provided by the institution, report this information on a regular basis to the governing body and in the prescribed manner to the Regulatory Authority. |
| (6) | In order to comply with the criteria of financial sustainability, the applicant must have the following in place: |
| (a) | a comprehensive and accurate financial business plan that includes a fully casted and modelled development plan and ensure that it is viable by generating adequate resources from activities and the prudent accessing of external funds to meet the financial obligations of the carrying on of its affairs; |
| (b) | policies and procedures that include effective accounting systems, financial management systems and management accounting procedures in place; |
| (c) | Financial Management— |
| (i) | a cost management system that manage costs effectively; |
| (ii) | a reporting system that includes regular reporting to lenders and other stakeholders on the overall financial status of the institution; and |
| (iii) | a system of control that include a vigorous financial control policy, the engagements of auditors to review adherence with the financial control policy and other key policies, regulations and legal requirements on at least an annual basis and engage auditors to carry out rigorous internal checks on the effectiveness of the financial controls; |
| (d) | Financial Performance— |
| (i) | audited annual financial statements including management letter; |
| (ii) | meet loan repayments; |
| (iii) | generate a minimum surplus or yield as determined by the Regulatory Authority from time to time; |
| (iv) | safeguard the public investment in the housing stock it owns and manages; and |
| (v) | meet the set thresholds (as set periodically by the Regulatory Authority) of the financial performance Key Performance Indicators (KPI) contained within the rules; |
| (7) | In order to comply with the criteria of effective tenant/membership management, the applicant must have the following in place: |
| (a) | management arrangements and staffing resources that are sufficient to deliver excellent tenant/membership management service; |
| (b) | a tenant/membership management plan in place; |
| (c) | systems— |
| (i) | policies and procedures in place and implement a full range of tenancy/membership policies to support tenancy/membership management including take on, letting, letting management, dispute/conflict resolution and termination; and |
| (ii) | a system of control in place to manage tenant's complaints effectively; |
| (d) | tenant/membership— |
| (i) | provide information and communication that is appropriate to the tenants/member about the standards of housing services and how to access these housing services; and |
| (ii) | include the marketing of units, a fair, open and transparent application process, must include the screening of prospective clients in order to establish eligibility and affordability including end user training programme; |
| (e) | letting management— |
| (i) | let properties fairly, according to transparent criteria and ensure equity and sustainability of tenancies; |
| (ii) | let properties in accordance with government policy and the basis upon which the grant for their development was awarded, to ensure that target groups are housed; and |
| (iii) | enter into leases/occupancy agreements and issue house rules which are fair and meet best practice; |
| (f) | a tenant/membership roll in place that collates information on the residential profile of each project, to include income, family sizes, age of residents and residents with special needs or in receipt of employer assistance; |
| (g) | communication strategy that includes the provision of information regarding application criteria and tenant/member management services for potential applicants and tenants/members and how tenants can communicate with the Social Housing Institution; |
| (h) | complaints management system in place to create awareness and understanding of internal and external complaints mechanisms; |
| (i) | a dispute resolution system that creates understanding of internal and external avenues for appeal; |
| (j) | an exit/termination system in place that deals with notice by a tenant or the social housing institution and that makes provision for effectively managing and dealing with co-ordinated boycotts of rental; |
| (k) | a periodic tenant/membership satisfaction survey that indicates tenant's satisfaction with the services and service offering and how the social housing institution addresses the results to improve tenant management services; |
| (l) | tenant/membership consultation and empowerment programme that addresses an approach to consult with tenants/membership to give them an opportunity to influence the development and management strategy and to provide appropriate training to tenants/membership to sustain tenancies/memberships and build capacity to be more effectively involved; |
| (m) | support arrangements and referral system in place to deal with identified support; and |
| (n) | a community engagement and neighborhood involvement plan in place. |
| (8) | In order to comply with the criteria for efficient property management the applicant must have the following in place: |
| (a) | a system to meet the thresholds of the property management KPI's as contained within the rules; |
| (b) | a housing portfolio plan that takes into account maintenance, acquisition, disposal, managing property life cycle and efficient use of housing stock; |
| (c) | systems— |
| (i) | policies and procedures in place for property management that includes maintenance management, rental management and vacancy management; and |
| (ii) | control system in place to ensure that maintenance complaints and vacancies are turned over in the prescribed timeframes and at a good quality as prescribed in the maintenance and vacancy policies; |
| (d) | project profiling that includes the names of projects, date of delivery, number of units, location, types of units and rentals; |
| (e) | maintenance management— |
| (i) | have management arrangements and staffing resources that are sufficient to deliver excellent property management service; |
| (ii) | a maintenance plan which makes adequate provision for the carrying out of periodic large scale works to buildings, reactive maintenance and unit turnover maintenance; |
| (iii) | a comprehensive inspection of housing stock at least every three years; |
| (iv) | a complaints management system in place that must indicate number, type, costs, quality and turnover time; and |
| (v) | a tenant/membership satisfaction survey that surveys the tenant satisfaction with the condition and maintenance of the property and that indicates what action the social housing institution will take to improve the maintenance services; |
| (f) | rental management— |
| (i) | a rent setting policy that calculate rentals in a way which is consistent with the terms of grant funding for the development of the properties, and complies with directives of the Regulatory Authority; |
| (ii) | a rent increase system that ensures that tenants are advised of increases in rents in the manner set out in their leases, ensure that such increases in rental are consistent with the stipulation regarding calculation of rentals; and |
| (iii) | a rent collection policy and system that is vigorous and well-managed, including effective means of dealing with rental arrears. |
| (g) | a vacancy management system that include, vacancy rates: number of properties tenanted as a proportion of the number of properties, average turn-around time for void properties, number of void days divided by void properties, average turn-around time for vacant properties and number of vacant days divided by vacant properties; and |
| (h) | efficient management costs that seek, in a systematic manner, to improve the efficiency, economy and effectiveness of its service delivery on an on-going basis. |
| (9) | In order to comply with the criteria for property development, the applicant must have the following in place: |
| (a) | planning and costs of developments that includes working with the spheres of government and other stakeholders to develop new homes that meet the economic and social needs of the communities within a sustainable environments where people want to live; |
| (b) | to use housing assets for financial leverage; |
| (c) | plans to produce quality accommodation, to ensure that tenants'/membership homes meet the standard set out in the social housing programme guidelines and continue to maintain their homes to at least this standard after this date; and |
| (d) | the social housing institution/delivery agent must meet the standards of design and quality applicable at the time when the home was built. |