The NHBRC was converted from a company to a state institution, which reports to Parliament in terms of the Housing Consumers Protection Measures Act of 1998. The levy is intended to protect homeowners against building defects.

Its strongest critic is Cape Townbased Rabie Property Projects, which says the perception in the marketplace is that it has become an "ineffectual and bloated bureaucracy".

Rabie Property Projects MD Leon Cohen says that in 1999 the mandatory 1,3% levy that the NHBRC charged on homes below R250,000 in value became payable on all homes, irrespective of their value, up to a maximum levy of R34,000.

The levy is calculated not only on the building costs, but also on the land value and professional fees, although in most cases the actual building is only half of the total selling price.

Rabie says no effort has been made to reduce this rate for large volumes or sectional title schemes , even though the foundations and structural approval for these buildings will always need an engineer's certificate to guarantee their soundness.

"The owner of a house for which an engineer is appointed is effectively insured twice by the NHBRC and the engineer's PI Insurance for structural defects. He is in fact paying twice for insurance," says Cohen.

Rabie supports the concept that every builder or developer should be registered with a council such as the NHBRC, and believes the council's funds should be used to protect the less sophisticated buyers in the sub-R250m000 category.

"Homes valued above R250m000 do not need the NHBRC's protection, because they almost invariably have professional designers who are insured against failures ," says Cohen.

"The banks involved also have valuers and inspectors to check the work. They could go a step further and insist on an engineer's certificate in all cases if necessary. NHBRC back-up is unnecessary on all but low-cost houses."

Cohen says the residential property market has boomed over the past two or three years, with the result that the NHBRC has been able to accumulate a fund of about R250m. He claims it has spent only "a few million" on repairing structural failures and then only after a protracted process.

"This outrageous situation has come about because the NHBRC pays out only when a builder refuses to put matters right or disappears from the scene," he says.

"In almost all other cases the threat of deregistration forces the builder to do the remedial work. The sums collected are thus way beyond the council's expenditure, and the construction industry and buyers are subsidising this sorry state of affairs."

Cohen says the NHBRC should follow the SA Property Owners' Association's example and charge a far smaller flat fee, depending on the size of the member organisation. The money raised should go into a sinking fund, from which the interest could be used to meet legitimate claims.

"Unless some independent, powerful body is prepared to challenge the NHBRC and force a change in the system, the fund will double in the not too distant future."

Bruce Peach, CEO of Johannesburg-based property developers Summercon, says he agrees with Cohen's views.

"The reputable developers are largely funding the scheme. We could be insuring ourselves at a nominal cost to our clients."

He says the NHBRC aims to protect consumers from "fly-by-night" developers in low-cost schemes, but there was not enough cash flowing from the sub-R250,000 sector for this purpose.

"The reputable developers are suffering. We (Summercon) insure our clients free of charge and offer the same warranties. Levies should also include a building insurance element for maintenance. We have insurance for every development."

Peach says reputable developers' clients are paying for something they are never going to claim against.

However, Peach says some "good things" have come out of the NHBRC. "There are fewer disreputable developers because of it, and there is more protection for the consumer."

Renprop Projects director Chris Renecle says there is a place for the NHBRC because it has protected consumers and credible developers, but feels it should have a rating system for developers.

"We should be rated on our quality, and our fees should be reduced accordingly." Developers would be able to pass on the saving to the consumer.

Renecle says developers who provide good quality housing should be given a "positive rating", which they could use to their benefit.

NHBRC CEO Phetola Makgathe says accusations that the organisation is bloated are unfair. "I'd like to see some data supporting that argument."

He says the NHBRC has established customer care centres in each province to facilitate registration, enrolment, complaints handling, conciliation and remedial works .

Makgathe says there is no need for developers to call for a reassessment, because Housing Minister Brigitte Mabandla will have an advisory committee to re-evaluate the NHBRC's activities and its impact on the industry.

Reacting to suggestions of a grading system, Makgathe says the NHBRC has recommended such a system to the minister, and is awaiting approval.

Makgathe says the 1,3% levy is paid by the consumer, not developers, and is a once-off premium over five years.

He dismisses arguments that the homeowner is paying double insurance. "There is no other warranty except the NHBRC scheme."

Rabie Property Projects does not agree that the homeowner pays the levy. "Indirectly the consumer pays for everything, but the developer pays the 1,3% levy," says Cohen.