A Bold Step Towards Sanitizing the Real Estate Industry
Ghana’s real estate market has long been infiltered by illegal activity due to a lack of regulations and legal structures for real estate agents and brokers. Indeed, many real estate agents and brokers have no professional training, identified places of business or records of transactions. This has led to an evasion of taxes by both agents and the brokers and has allowed real estate transactions to become a haven for money launderers.
The Act also established a Real Estate Agency Council to help regulate the industry. The Council is required to perform several regulatory functions including the licensing of real estate agents and brokers, issuing of real estate transaction certificates, maintaining a register of real estate agents and brokers, inspecting the premises of real estate agents and brokers, maintaining a national database of real estate transactions, establishing and enforcing a code of ethics for real estate agency practice, and prescribing the scale of fees for real estate transactions.
Under the new Act any person who wishes to provide services as a real estate agent or broker must first obtain a licence from the Council by applying to its governing Board. A person may only be issued a licence if they have a Tax Identification Number and have passed a qualifying examination set by the Board, unless the Act exempts them from taking the exam.
Act 1047 imposes certain obligations on real estate agents and brokers with the view to instituting some control mechanisms and audit systems in their activities. Real estate agents and brokers are now required to have a place of business where they must display their licence and fees. In all their real estate transactions, agents and brokers may only use real estate transaction forms issued by the Council and must ensure that parties to transactions are furnished with copies of the relevant agreements. Real estate agents and brokers may not accept cash payment for any real estate transaction; they may only receive payment by bank draft, cheque, bank transfer or electronic money transfer. In addition, the Act provides that a real estate transaction is not complete unless a real estate transaction certificate has been issued by the Council. Licenced agents and brokers are required to keep records of their transactions and to submit reports of transactions and audit reports of their books of accounts to the Council. Failure or refusal to comply with the requirements of the Act by persons engaged in real estate agency practice will attract various forms of sanctions including suspension of licence, revocation of licence, and a fine and/or imprisonment.
In turn, the Council is required to keep and annually publish a register of real estate agents and brokers. The Council is also required to maintain a national database of real estate transactions which shall contain the transaction records of each real estate agent or broker; the database must be accessible to the Economic and Organised Crime Office, the Financial Intelligence Centre, the Ghana Revenue Authority, and any other relevant authority.
With the implementation and enforcement of this Act, is expected that the activities of real estate agents and brokers will be streamlined, thus giving some protection to persons dealing with real estate agents and brokers and improving public trust in the industry.