Ghana Real Estate Board … A New Dawn
To quote economist Adam Smith, “it is not from the benevolence of the butcher, brewer or baker that we expect our dinner, but their concern for their own interests.”
By this he was referring to the benefits of motivation that the self-interest of these professionals can bring and the importance of collaboration and interdependence for national economic unity.
However, this position is not complete without considering the consumer. While some states leave the market open to decide the balance of interests, some must necessarily regulate to ensure that there is a level playing field that aligns with the national interest.
It is therefore no exaggeration that the treatment of real estate regulation varies from country to country.
In Ghana, the growth of the real estate sector in recent times has resulted in a corresponding increase in the number of real estate agents, real estate brokers and consultants. Their role is to act as intermediaries in the negotiation and arrangement of real estate transactions.
The industry has, however, been without a regulator and therefore left at the mercy of the arbitrary practices of industry players.
This has made the industry an avenue where taxable earnings are hidden from the state and criminals hide or use their earnings to finance terrorism and other illegal activities.
The industry has also seen undesirable practices where, for example, potential tenants had to pay too much to view the properties, agents acted for both sides of the transactions and obtained double fees through coercion, and agents were forced to pay too much to view the properties, gone and left customers with no recourse among a host of others.
In order to protect consumers, it has become necessary for the government to put in place regulatory measures given the importance of the sector for the country’s economic performance. This ensures that the services provided reflect modern mutually beneficial practices, standardization, transparency and professionalism.
In addition to effective regulation of industry practitioners, the law also seeks to plug the channels through which real estate transactions are used to launder money. It allows detailed monitoring of transactions and the people involved in transactions.
The law further provides a framework within which the Board of Real Estate Agencies can facilitate, promote and regulate the progressive industry practices desired in Ghana.
The Council shall achieve this by providing courses and examinations for those interested in becoming brokers, licensing real estate agents, issuing real estate transaction certificates, establishing professional development programs. for brokers and agents, establishing a code of practice, prescribing the scale of fees, as well as working with other agencies on anti-money laundering to combat terrorist financing through real estate practices.
The Act creates a number of ways in which one can become a licensed real estate agent or broker. Persons who are appraisal and estate experts registered with the Ghana Institution of Surveyors or attorneys approved by the General Legal Council may apply to become brokers or agents.
There is also an itinerary for people who have practiced continuously as real estate brokers in Ghana for at least five years before the law comes into force. Another route is for those who pass a qualifying examination conducted by the Council.
When the law becomes fully operational, a license will be required to be able to provide real estate agency or brokerage services or to engage in any activity related to the provision of real estate agency services or real estate transactions. Failure to comply with the relevant provisions of the law will result in criminal penalties.
The law also refers to cashless payments and transaction certificates, requiring that for every real estate transaction payment be made by bank draft, check or wire transfer exclusively. Cash transactions will no longer be allowed.
In addition, a real estate transaction will not be complete unless a real estate transaction certificate has been issued. It is with this certificate that you can register your land or property with the Land Commission and therefore it should be taken very seriously.
The Law prohibits the Land Commission from registering any real estate or interest in real estate that is not accompanied by a transaction certificate.
The creation of the Council of Real Estate Agencies could not have come at a more opportune time. The country has passed regulation and licensing by law in an attempt to clean up the system and level the playing field.
The sector is a key driver of economic growth, particularly by contributing to job creation for our team of qualified and unskilled young people. The law also has the potential to help increase our housing stock and lower the price of real estate as well as open up the sector to local and foreign direct investment, for the benefit of developers.
The law offers an opportunity to rationalize a sector which is imperative for the future economic well-being of the country.
The Council is now constituted and is working to ensure that all structures are in place as quickly as possible. We must all support them in order to reap the benefits in the years to come.
The writer is a development planner and a member of the Ghana Institute of Planners, is the Minister of Works and Housing and a member of the Bantama Parliament.
BY FRANCIS ASENSO-BOAKYE