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Building Societies Act, 1986
Act 2 of 1986
- Published in Official Gazette 5189 on 1 April 1986
- Assented to on 27 March 1986
- Commenced on 1 April 1986
- [This is the version of this document from 20 May 2019 and includes any amendments published up to 11 October 2024.]
- [Amended by Building Societies Amendment Act, 1987 (Act 15 of 1987) on 1 July 1987]
- [Amended by Building Societies Amendment Act, 1990 (Act 25 of 1990) on 19 December 1990]
- [Amended by Building Societies Amendment Act, 1992 (Act 8 of 1992) on 15 April 1992]
- [Amended by Building Societies Amendment Act, 1994 (Act 25 of 1994) on 11 November 1994]
- [Amended by Married Persons Equality Act, 1996 (Act 1 of 1996) on 15 July 1996]
- [Amended by Deposit Guarantee Act, 2018 (Act 16 of 2018) on 20 May 2019]
Chapter I
INTRODUCTORY
1. Definitions
In this Act, unless the context otherwise indicates -“advance” includes one or more advances on the security of one property or of two or more properties jointly;“agent” means a representative of a society with express authority in regard to the acceptance of money in respect of deposits or shares or repayments of advances or loans or the receipt of applications in respect of advances or loans on behalf of that society;“approved stocks” means stocks issued under section 27(1)(bb) of the State Finance Act, 1982 (Act 1 of 1982), and such other stocks as the Treasury may approve;[The State Finance Act 1 of 1982 has been replaced by the State Finance Act 31 of 1991.]“bank” or “banker” means a banking institution registered otherwise than provisionally under the Banks Act, 1965 (Act 23 of 1965);[The Banks Act 23 of 1965 has been replaced by the Banking Institutions Act 2 of 1998.]“board”, in relation to any society, means the board of directors or the body managing the business of the society, by whatever name it may be called;“building society” means an association of persons the principal object of which is the making, out of funds derived from the issue of shares to and the acceptance of deposits from the public or from subscriptions by members, of advances for the purpose of erecting, acquiring and improving dwelling houses upon the security of the mortgage of urban immovable property;“Central Bank” means the Bank of Namibia established by section 2 of the Bank of Namibia Act, 1990 (Act 8 of 1990);[definition of “Central Bank” inserted by Act 25 of 1990]“court”, in relation to a society, and without prejudice to the jurisdiction of any magistrate’s court in relation to any offence in terms of this Act, means the Supreme Court of South West Africa;“director” includes an alternate director and any person occupying a position on the board of a society, by whatever name he may be called;“discount house” means an institution registered or deemed to be registered as a discount house under the Banks Act, 1965 (Act 23 of 1965);[The Banks Act 23 of 1965 has been replaced by the Banking Institutions Act 2 of 1998.]“dwelling house” includes a unit as defined in section 1 of the Sectional Titles Act, 1971 (Act 66 of 1971), used or intended to be used for residential purposes;[The Sectional Titles Act 66 of 1971 has been replaced by the Sectional Titles Act 2 of 2009.]“executive officer”, in relation to a society, means a manager, a deputy manager or an assistant manager of such society;“final registration” means the final registration of a society under section 4(7);“firm” includes any partnership and any company or other corporate body;“fixed deposit” means a deposit fixed for a period of not less than twelve months;“fixed period share capital” means the aggregate amount paid up on shares issued under section 27(1)(b);“fixed term mortgage of immovable property” means a mortgage of immovable property other than a reducible mortgage of immovable property;“general reserve” means the reserve referred to in section 34;“indefinite share capital” means the aggregate amount paid up on shares issued under section 27(1)(a);“Land Bank” means the Land and Agricultural Bank of South West Africa;“liquid assets” means the aggregate amount of -(a)Central Bank Notes and subsidiary coin;(b)deposits, withdrawable on demand, with a bank;(c)loans to discount houses, repayable on demand;(d)bills of exchange or debentures issued under section 27(1)(cc) of the State Finance Act, 1982 (Act 1 of 1982);[The State Finance Act 1 of 1982 has been replaced by the State Finance Act 31 of 1991.](e)stocks and bonds issued under section 27(1)(bb) of the State Finance Act, 1982 (Act 1 of 1982), with a maturity, to the latest redemption date, of not more than three years;[The State Finance Act 1 of 1982 has been replaced by the State Finance Act 31 of 1991.](f)bills issued by the Land Bank;(g)debentures of the Land Bank with a maturity of not more than three years;(h)acceptances of a banking institution which are discountable by the Central Bank;(i)self-liquidating bills or promissory notes arising from the movement of goods, with a maturity of not more than one hundred and twenty days, or in the case of agricultural bills, six months, and which are discountable by the Central Bank;(j)stocks of the Central Bank which on that date had a maturity, to the latest redemption date of not more than three years; and(k)such other assets as the registrar may by notice in the Official Gazette approve for the purposes of this definition;“liquidator”, in relation to a society, means a person appointed to conduct the winding-up of that society;“long-term liability”, in relation to any date, means a liability which is payable after the expiration of a period of more than one hundred and eighty days as from that date or which on that date is, subject to more than one hundred and eighty days notice before becoming payable;“medium-term liability”, in relation to any date, means a liability which is payable after the expiration of a period of more than thirty-one days but not more than one hundred and eighty days as from that date, or which on that date is subject to more than thirty-one days’ but not more than one hundred and eighty days’ notice before becoming payable, and includes -(a)the aggregate net amount a society is committed to pay out in respect of advances granted;(b)the aggregate amount of cash accepted by a society in terms of section 21(1)(d)(iii); and(c)savings deposits;“member”, in relation to any society, means a shareholder in that society;“Minister” means the Minister of Finance;[definition of “Minister” inserted by Act 25 of 1990]“mortgage of urban immovable property” includes the cession of a registered lease having not less than twenty years to run;“officer”, in relation to a society, means any director, local director or local committee member, or employee of the society;“owing”, in relation to any advance, means owing in respect of the capital amount advanced together with interest due thereon;“paid-up share” means a share paid for in full at the time of application therefore;“paid-up share capital” means the aggregate amount of the share capital paid up;“prescribed” means prescribed by or under this Act;“prescribed fee” means a fee prescribed in the First Schedule to this Act or in that Schedule as amended or added to under section 75(1) or (2);“prescribed form” means a form prescribed under section 78;“provisional registration” means registration other than final registration;“reducible mortgage of immovable property” means a mortgage of immovable property the terms of which provide for the redemption of the capital amount advanced by regular equal payments which include any interest due on any amount outstanding;“registered”, in relation to any society, means provisionally or finally registered under this Act, and “registration” has a corresponding meaning;“registrar” means the registrar or deputy registrar of building societies appointed under section 2;“regulation” means a regulation made and in force under this Act;“savings account” means an account which a depositor maintains with a society and in which he may not keep a larger credit balance than is determined by the rules of the society and from which he may not without the consent of the society, make a withdrawal at shorter notice, according to the amount to be withdrawn, than is determined by the rules of the society;“savings deposit” means a credit balance in a savings account;“secretary”, in relation to a society, includes a manager, deputy manager or assistant manager, or other principal executive officer of the society, by whatever name he may be called;“shareholder”, in relation to any society, means a person who holds shares therein, whether fully or partly paid and whether or not held by the society as security for an advance or a loan;“short-term liability”, in relation to any date, means a liability which is payable not more than thirty-one days as from that date or which on that date is subject to not more than thirty-one days’ notice before becoming payable, and includes transmission deposits;“society” means a building society registered under this Act;“special resolution” means a resolution -(a)passed by not less than three-fourths of those members who are personally present or represented by proxy and vote in accordance with the rules of the society at a special general meeting called for that purpose; and(b)the terms and effect of which and the reasons for which have been fully set out in the notice convening the meeting referred to in paragraph (a);“subscription share” means a share subscribed for by periodical contributions of a fixed amount;“transmission account” means an account which a depositor maintains with a society and from which the depositor may withdraw amounts on demand and the society, according to instructions by the depositor, may make payments to other persons and transfer amounts to any other account;“transmission deposit” means a credit balance in a transmission account;“Treasury” means any officer of the Department of Finance authorised by the Minister to perform any function assigned to the Treasury by this Act;“urban immovable property” means -(a)Any piece of land registered as an erf, lot or stand in a deeds registry, and situated in an approved township as defined in section 1 of the Townships and Division of Land Ordinance, 1963 (Ordinance 11 of 1963), and includes every defined portion, not intended to be a public place, of a piece of land laid out as such a township, whether or not it has been formally recognised, approved or proclaimed as a township;(b)any small holding or other small piece of land situated in the vicinity of a township referred to in paragraph (a) and in an area which is or is intended to be primarily a residential area;(c)any lease in longum tempus of any ground referred to in paragraph (a) or (b), provided such lease has not less than twenty years to run;(d)any land granted in terms of section 18(4) of the Development Trust and Land Act, 1936 (Act 18 of 1936);[The Development Trust and Land Act 18 of 1936 was repealed by the Communal Land Reform Act 5 of 2002.](e)any other land or rights thereover approved by the registrar either generally or specifically;“value of share” means the amount standing to the credit of a share in the books of a society.2. Appointment of registrar and deputy registrar of building societies
Chapter II
FORMATION AND REGISTRATION OF SOCIETIES
3. Formation of a society
4. Registration of societies
5. Registered building society to be a body corporate
6. Name of society
7. Certificate of registration to be conclusive
A certificate of registration of a society issued by the registrar shall, in the absence of proof of fraud, upon its mere production be conclusive evidence that all requirements of this Act in respect of registration and of matters precedent and incidental thereto have been complied with and that the society is a society duly registered under this Act.8. Minimum paid-up share capital to be allowed to commence business
A society shall not commence business unless its paid-up share capital amounts to at least five hundred thousand rand, and any society which contravenes the provisions of this section shall be guilty of an offence.9. Registrar may demand information from association of persons
10. Cancellation and suspension of registration
Chapter III
ADMINISTRATION OF SOCIETIES
11. Matters to be set forth in rules
The rules of a society shall set forth -12. Amendment of rules
13. Registrar may require revision of rules
14. Model rules
15. Binding force of rules
16. Election or appointment of directors
17. Disqualifications of directors
18. Disclosure by directors of interests in contracts with society
19. Head offfice of society
[The word “office” is misspelt in the Official Gazette, as reproduced above.]20. Branch offices and agencies
21. General powers of societies
Total indefinite share capitalplus general reserve | Maximum percentage of investment in land, buildings, shares and loans |
---|---|
Less than R20 000 000 | 20 |
R20 000 000 and more, but less than R100 000 000 | 15 |
R100 000 000 and more, but less than R200 000 000 | 12½ |
R200 000 000 and more | 10 |
22. Societies to keep records
A societiy shall keep such records in the English or the Afrikaans language as are necessary to exhibit clearly and correctly the state of the society’s affairs and to explain its transactions and financial position and to enable the registrar to determine whether the society has complied with the provisions of this Act, and shall preserve such records in a safe place for a period of at least three years as from the date of the last entry therein.[The word “society” is misspelt in its first use in section 22, as reproduced above.]23. General meetings
24. Change of name of society
Chapter IV
FINANCIAL REQUIREMENTS
25. Deposits
Total assets at close of last preceding financial year | Maximum amount of deposits repayable in any one month which may be accepted | Maximum aggregate amount of deposits which may be accepted |
---|---|---|
Up to R100 000 000 | R 250 000 | R 6 000 000 |
More than R100 000 000but not more thanR250 000 000 | R 500 000 | R12 000 000 |
More than R250 000 000but not more thanR800 000 000 | R1 000 000 | R24 000 000 |
More than R800 000 000 | R2 500 000 | R60 000 000 |
26. Loans and overdrafts
27. Shares
28. Investment of funds
Such portion of the funds of a society as is not held in the form of assets ranking as liquid assets or used for any purpose mentioned in section 21(1)(j) or (k), shall, subject to the provisions of this Act, be invested in one or more of the following forms of security and in no other manner, that is to say -29. Minimum indefinite share capital and general reserve to be maintained
30. Minimum liquid assets to be maintained
31. Period for maintaining prescribed minima
A society shall maintain any minimum amount prescribed by section 29 or 30 at all times during the period from the date of certification in terms of section 32(1) of the monthly return by reference to which that amount is determined, until the day preceding the date on which the next succeeding monthly return is so certified.32. Monthly returns
33. Annual accounts
34. General reserve
35. Dividends
Chapter V
ADVANCES
36. Reducible mortgage
37. Fixed term mortgage
38. Limitation of amount of advance
Total assets at the close of the last preceding financial year | Maximum advance |
More than R2 000 000 but not more than R5 000 000 | R 500 000 |
More than R5 000 000 but not more than R20 000 000 | R1 000 000 |
More than R20 000 000 but not more than R200 000 000 | R3 000 000 |
More than R200 000 000 | R5 000 000 |
39. Restriction on fixed term mortgages
40. Powers of Minister in respect of interest rates on certain mortgages
41. Restriction on advances on vacant land
Save with the written consent of the registrar and subject to such conditions as he may prescribe, the aggregate amount owing to a society in respect of advances against security of mortgages of vacant land shall not at any time exceed five per cent of the sum of its indefinite share capital and general reserve as at the close of its preceding financial year.42. Limitation of total amount of certain advances
43. Prohibition of certain types of advances
A society shall not -44. Collateral security
45. Valuation of immovable property
46. Societies may recover certain moneys not permitted by Act 73 of 1968
In addition to the amounts which under section 5 of the Limitation and Disclosure of Finance Charges Act, 1968 (Act 73 of 1968), a society would be entitled to obtain judgment for and recover in terms of a mortgage of immovable property, or any subsequent written agreement in terms of such mortgage, it may obtain judgment for and recover the following, namely -[Act 73 of 1968 has been re-named the Usury Act.]47. Advances and loans not invalidated by certain irregularities
An advance or loan granted by a society shall not be invalidated by reason of any contravention of this Act in connection with such advance or loan.Chapter VI
ENQUIRIES AND INSPECTIONS
48. Registrar may demand information from society
For the purposes of carrying out the provisions of this Act the registrar may demand from any society any information or explanation in relation to any matter connected with its business or transactions, and such society shall within fourteen days (or within such further period as the registrar may allow) comply with such demand in writing, and any such information or explanation shall be furnished in such form as the registrar may direct, and shall, if he so directs, be certified by two directors and the secretary of the society.49. Appointment of inspectors
50. Inspection of the affairs of a society
51. Investigation by inspector appointed by society
52. Offences and penalties
Chapter VII
AMALGAMATION, TRANSFER OF ASSETS AND LIABILITIES, JUDICIAL MANAGEMENT, WINDING-UP AND DISSOLUTION
[heading of Chapter VII substituted by Act 25 of 1994]52A. Amalgamation and transfer of assets and liabilities
53. Judicial management
54. Voluntary winding-up of society
55. Winding-up by court
56. Appointment of judicial manager and liquidator
Notwithstanding the provisions of the Companies Act, 1973 (Act 61 of 1973), as applied by sections 53 and 55 of this Act, no person other than a person recommended by the registrar shall be appointed by the Master of the Supreme Court as judicial manager, provisional judicial manager, liquidator or provisional liquidator of a society.[The Companies Act 61 of 1973 has been replaced by the Companies Act 28 of 2004.]57. Dissolution of society
Immediately after the confirmation of the final account in the winding-up of a society which is wound up under the provisions of the Companies Act, 1973 (Act 61 of 1973), as modified and applied by sections 54 and 55 of this Act, the Master of the Supreme Court shall give notce thereof to the registrar, who shall register it and cancel the registration of the society and thereupon the society shall be dissolved.[The word “notice” is misspelt in the Official Gazette, as reproduced above. The Companies Act 61 of 1973 has been replaced by the Companies Act 28 of 2004.]58. Limitation of liability of members
When a society is being wound up the liability of any member in respect of any share shall be limited to the amount in arrear on such share at the commencement of such winding-up: Provided that no member shall be entitled to claim repayment of any amount actually paid on any such share unless the claims of all creditors of the society have been paid in full: Provided further that if a member has received any advance or loan from the society, he shall be liable to repay the full amount owing by him in respect of such advance or loan.59. Liability of borrowers in winding-up
When a society is being wound up, any member or other person to whom an advance or a loan has been made under any mortgage or other security or under the rules of the society shall not be liable to pay the amount payable under such mortgage, security or rules except at the time or times and subject to the conditions expressed therein or agreed upon.Chapter VIII
GENERAL PROVISIONS
60. Societies to provide against loss through negligence or dishonesty of their officers and agents
61. Auditors of society
62. Minors
Unless otherwise provided by the rules of the society, a minor over the age of sixteen years may be a member of or depositor with any society and may without the consent or assistance of his or her guardian execute all necessary documents, give all necessary acquittances and cede, pledge, borrow against and generally deal with his or her share or deposit as he or she thinks fit, and shall enjoy all the privileges (except that a minor shall not hold office) and be liable to all the obligations attaching to members or depositors.[section 62 substituted by Act 1 of 1996]63. Application for shares, or for leave to make deposits
64. Share certificates, pass books and fixed deposit receipts
65. Power of registrar in connection with advertisements and other documents
66. Admissibility in evidence of certified documents
Every document purporting to be certified by the registrar to be a document deposited at his office under the provisions of this Act shall, in the absence of proof to the contrary, be deemed to be such document, and every document purporting to be similarly certified to be a copy of such document, shall be deemed to be a true copy thereof, and shall be received in evidence as if it were the original document, unless some variation between that document and the original document is proved.67. Inspection of documents
68. Carrying on business by unregistered society and use of designation “building society”
69. Only society may claim to be successor of or to be connected with building society
Any person other than a society or an agent of a society who in any letter, account or other document or by advertisement or in any other medium or manner of announcement to the public states that he is the successor of or carries on business or has the authority to carry on business for, on behalf of or in favour of a building society shall be guilty of an offence.70. Acceptance of benefits
71. Withholding money or other effects of society
72. Default in rendering accounts, furnishing information and giving notice and other offences
73. Default in maintaining prescribed ratio or proportion
74. Penalties
75. Prescribed fees
76. Annual licence
77. Annual report by registrar
The registrar shall annually submit to the Minister a report on the working of all societies and on matters relating to such societies which have been dealt with by him during the year, and the Minister shall lay the report on the Table in the National Assembly.78. Regulations
The Minister may make regulations -79. Repeal of laws
80. Short title and commencement
This Act shall be called the Building Societies Act, 1986, and shall come into operation on 1 April 1986.History of this document
20 May 2019 this version
Amended by
Deposit Guarantee Act, 2018
15 July 1996
11 November 1994
Amended by
Building Societies Amendment Act, 1994
15 April 1992
Amended by
Building Societies Amendment Act, 1992
19 December 1990
Amended by
Building Societies Amendment Act, 1990
01 July 1987
Amended by
Building Societies Amendment Act, 1987
01 April 1986
Commenced
27 March 1986
Assented to
Cited documents 18
Act 18
1. | Income Tax Act, 1981 | 244 citations |
2. | Public Accountants’ and Auditors’ Act, 1951 | 200 citations |
3. | Usury Act, 1968 | 42 citations |
4. | Inspection of Financial Institutions Act, 1984 | 33 citations |
5. | Financial Institutions Amendment Act, 1976 | 13 citations |
6. | Financial Institutions Amendment Act, 1980 | 13 citations |
7. | Financial Institutions Amendment Act, 1984 | 12 citations |
8. | State Finance Act, 1982 | 12 citations |
9. | Financial Institutions Amendment Act, 1978 | 11 citations |
10. | Deposit Guarantee Act, 2018 | 10 citations |
Documents citing this one 102
Gazette 64
Act 32
1. | Local Authorities Act, 1992 | 1329 citations |
2. | Companies Act, 2004 | 445 citations |
3. | Regional Councils Act, 1992 | 390 citations |
4. | Agricultural (Commercial) Land Reform Act, 1995 | 255 citations |
5. | Legal Practitioners Act, 1995 | 249 citations |
6. | Income Tax Act, 1981 | 244 citations |
7. | Banking Institutions Act, 1998 | 224 citations |
8. | Competition Act, 2003 | 178 citations |
9. | Employees’ Compensation Act, 1941 | 101 citations |
10. | Community Courts Act, 2003 | 88 citations |
Government Notice 3
1. | General Regulations, 1997 | |
2. | Regulations made under the Traditional Authorities Act, 2000 | |
3. | Short-term Insurance Regulations, 1998 |
Judgment 2
Law Reform Report 1
1. | Aspects of Family Law: The Abolition of Marital Power and Equalization of Rights between Spouses |