Home Loan Act

HOME LOAN AND MORTGAGE DISCLOSURE ACT 63 OF 2000

[ASSENTED TO 8 DECEMBER 2000]

[DATE OF COMMENCEMENT: TO BE PROCLAIMED]

(English text signed by the President)

ACT

To promote fair lending practices, which require disclosure by financial

institutions of information regarding the provision of home loans; to establish an

Office of Disclosure; and to provide for matters connected therewith.

Preamble

WHEREAS, in terms of section 9 of the Constitution-

(a) everyone is equal before the law and has the right to

equal protection and benefit of the law;

(b) equality includes the full and equal enjoyment of all

rights and freedoms;

(c) legislative and other measures, designed to protect or

advance persons, or categories of persons, disadvantaged

by unfair discrimination, may be taken to promote the

achievement of equality;

(d) the state may not unfairly discriminate directly or

indirectly against anyone on one or more grounds, including

race, gender, sex, pregnancy, marital status, ethnic or

social origin, colour, sexual orientation, age, disability,

religion, conscience, belief, culture, language and birth;

(e) no person may unfairly discriminate directly or indirectly

against anyone on one or more grounds listed in paragraph

(d); and

(f) discrimination on one or more of the grounds listed in

paragraph (d) is unfair unless it is established that the

discrimination is fair;

AND WHEREAS, in terms of section 26 (1) and (2) of the Constitution-

(a) everyone has the right to have access to adequate

housing; and (b) the state must take reasonable legislative and other

measures, within its available resources, to achieve the progressive realisation of this right;

AND WHEREAS, in terms of section 32 (1) of the Constitution everyone has the right of

access to any information-

(a) held by the state; and

(b) that is held by another person and that is required for

the exercise or protection of any rights;

AND WHEREAS, in terms of section 2 (1) (e) (v) and (vi) of the Housing Act, 1997 (Act 107 of 1997), national, provincial and local spheres of government must, inter alia, promote-

(a) the effective functioning of the housing market while

levelling the playing fields and taking steps to achieve

equitable access for all to that market; and

(b) measures to prohibit unfair discrimination on the ground

of gender and other forms of unfair discrimination by all

actors in the housing development process;

AND WHEREAS in the past there has been discrimination by financial institutions, on one or more grounds set out in section 9 (3) of the Constitution, when considering or granting home loans;

AND WHEREAS there is an urgent need to ensure that all financial institutions disclose

certain information regarding their business of advancing finance in respect of home loans;

AND WHEREAS it is not the intention of this Act to promote, in any way, unsound lending practices among financial institutions in their business of providing home loans;

BE IT THEREFORE ENACTED by the Parliament of the Republic of South Africa, as

follows:-

CHAPTER I [sic]

INTRODUCTORY PROVISIONS

1 Definitions

In this Act, unless the context indicates otherwise- 'auditors' means the auditors of the financial institution appointed in terms of the requirements of the Companies Act, or any other applicable law; 'borrower' means any person who is indebted to a financial institution in respect of a home loan; 'Companies Act' means the Companies Act, 1973 (Act 61 of 1973); 'Department' means the Department of Housing;

'financial institution' means any bank or mutual bank registered as such under the Banks

Act, 1990 (Act 94 of 1990), or the Mutual Banks Act, 1993 (Act 124 of 1993), or any other registered financial institution whose business is, in full or in part, either the acceptance of deposits from the general public, the advance of credit to persons or both such acceptance and advance, with the security of a registered mortgage bond or any other form of accepted security, for the purpose of providing home loans;

'home' means a residential structure that is recognised by a financial institution as

collateral, in full or in part, for a home loan; 'home loan' means a loan or advance by a financial institution to a person for purposes of constructing, purchasing, renovating or improving in any way such person's home, with the security of a registered mortgage bond or any other form of accepted security; 'Minister' means the Minister of Housing;

'Office' means the Office of Disclosure established by section 4;

'prescribed' means prescribed by regulation; 'regulation' means a regulation made under section 12; 'required information' means the information contemplated in section 3;

'secretariat' means the secretariat contemplated in section 11.

2 Disclosure obligations by financial institution

(1) From the date of the commencement of this Act, every financial institution must disclose the required information in its annual financial statements.

(2) The disclosure by a financial institution of the required information is in addition to any other information which the financial institution is obliged to disclose in its financial

statements in terms of the Companies Act or any other law.

(3) The required information must be furnished under a separate heading entitled,

'Disclosure requirements in terms of Home Loan and Mortgage Disclosure Act'.

(4) The auditors must comment specifically in the financial institution's annual statements on the accuracy and comprehensiveness of the information disclosed in terms of subsection (1), and whether or not there has been compliance by the financial institution with the relevant provisions of this Act.

3 Information to be disclosed by financial institution

(1) A financial institution must, in respect of home loans, disclose the following information:

(a) The total number and amount in rand of completed home loan applications received during the financial year in respect of which the financial statements have been

prepared in respect of such- (i) categories of borrowers as may be

prescribed; and

(ii) geographic areas as may be prescribed;

(b) the total number and amount in rand of home loan