In the past few years, the Competition Commission and the South African Council for the Architectural Profession (SACAP) have received multiple complaints from residents and registered professionals in the architectural profession against various residential estates countrywide. The complaints allege that Homeowner Associations and/or Body Corporates are setting rules and regulations that allow only Professional Architects (“PrArch”) to design plans for residents, thereby preventing all other architectural professionals such as Draughtspersons, Technologists or Senior Technologists from providing architectural services in those residential estates. These rules and regulations disregard the fact that persons registered with SACAP under these professional categories are qualified and competent to undertake designs and prepare plans in terms of the Architectural Profession Act No. 44 of 2000 and as prescribed by the Identification of Work policy (“IDoW”). The rules and regulations by Homeowner Associations and/or Body Corporates have the potential effect of substantially limiting competition in the market in possible contravention of sections 8(c) and 5(1) of the Competition Act. No. 89 of 1998, as amended.
The Competition Commission and the SACAP have, in February 2022, issued a joint circular on “The Anti-Competitive Effects of Rules and Regulations by Homeowner Associations and/or Body Corporates on Architectural Services Rendered in Residential Estates”.
Why the Competition Commission and SACAP have issued a Circular:
The purpose of the circular is to promote estate and body corporate rules that are fair and that enable service providers across the various categories of registration to compete and participate in the market for architectural services, for the benefit of consumers. In the circular, the Competition Commission and SACAP advise Homeowner Associations and/or Body Corporates to:
- comply with the provisions of the Competition Act and to refrain from engaging in conduct that has the effect of significantly preventing or lessening competition in the market;
- ensure that their rules and regulations comply with the provisions of the Competition Act and encourage equitable and fair competition;
- apply SACAP’s IDoW policy as is prescribed;
- ensure that they follow a competitive and inclusive process if they wish to select a pool of Architectural Professionals to provide architectural services in the residential estates; and
- limit the duration of the contractual period of Architectural Professionals appointed on their panels.
This circular applies to Homeowner Associations and/or Body Corporates of all residential estates within the Republic of South Africa. The Commission will not hesitate to prosecute those that engage in practices that contravene the Competition Act. Homeowner Associations and/or Body Corporates are therefore required to ensure compliance with this circular and that their rules and regulations do not infringe any of the provisions of the Competition Act.
The circular can be found on the Commission’s website on www.compcom.co.za/reports