Stakeholders ask parliament to pass the 2020 real estate agency bill before dissolving this parliament

Opinions on Friday, September 18, 2020

Columnist: Surv. J. Zinzi Ayitey

2020-09-18

Surv. J. ZinziAyitey Senior Lecturer at KNUST; FGhIS, facilitator of the public-private dialogue platform at a key stakeholder workshop organized by the Ghana Chamber of the Construction Industry under the auspices of the Ministry of Works and Housing funded by BUSAC FUND and its donor partners DANIDA and USAIAD , presents a very detailed document on the Real Estate Agency Bill that is currently in Parliament and has gone through the second reading awaiting its approval into law before the end of this current Parliament.

The purpose of the bill is to regulate the practice of real estate agencies, the conduct of real estate professionals, commercial transactions in real estate, including the sale, purchase, rental and leasing of real estate, as well as other real estate transactions. .

The real estate sector is of great importance for the economy of all countries and in particular for the financial market due to the large monetary transaction that it implies. Ghana, like all other economies, has had the practice of real estate for a considerable period of time. The practice has grown considerably in recent years as the real estate market has become more active with the purchase, sale and lease of properties as an asset class and also for occupancy.

The role of the real estate broker has traditionally been that of an intermediary between the buyer and the seller of the property. One result of the increase in activities in the real estate market has been the influx of people who have introduced fraud into the business. Many brokers and real estate agents do not have any particular training in real estate and many others do not have identifiable offices. Real estate investors dealing with real estate agents are not guaranteed against fraud and many have been scammed.

Furthermore, a look at the real estate business shows the lack of adequate internal control mechanisms, policies, training and auditing systems, among other things, that make the sector attractive to criminals. Real estate transactions, by their nature, involve huge sums of money, and because of this, there is a need to ensure that professionals in real estate agencies and parties to real estate transactions keep records of their transactions for tax purposes. Lack of record keeping by most real estate professionals and parties to real estate transactions does not pay taxes on income earned from transactions. This denies the government the necessary revenue for development purposes.

Another disadvantage of the current state of practice for real estate agencies is the promotion of unhealthy competition between legitimate businesses and criminals because investing in the real estate sector offers advantages for individuals and legitimate businesses that are law-abiding and criminals who abuse of the system. The socioeconomic impact is significant, although it cannot be easily measured.

Therefore, there is a need to regulate the services of real estate agencies to rid the industry of fraud, illegal income laundering and tax evasion to minimize the effect of these vices on the national economy and improve the international image of the country.

Additionally, Ghana, as a signatory to international conventions on corruption, including the African Union Convention to Prevent and Combat Corruption and the United Nations Convention against Corruption, must adhere to international standards for the prevention of money laundering. . Some studies have identified real estate transactions as a way to launder money. There are a number of ways that money is laundered through real estate, including the direct purchase of property for cash, the use of fictitious names to purchase property, and the use of third parties or front men to purchase property. Thus, in the country’s quest to adhere to international best practices, the bill seeks to plug the avenues in which real estate transactions are used to launder money, including a ban on the use of cash for real estate transactions. This will ensure that there is detailed tracking of transactions and the people involved in real estate transactions.

The approval of the bill will go a long way towards strengthening anti-corruption initiatives in the country and curbing money laundering and other financial malpractices in the sector. It will also be in the interest of good governance and improve the country’s position in the subsequent assessments of the International Action Group against Money Laundering in West Africa.

The extravagant effect of the bill will be to clean up the entire real estate market and protect all participants and improve tax revenue for development. Among the many stakeholders that were present were the Revenue Control Department, the Ghana Surveyors Institution, the Center for Financial Intelligence, the Engineering Institution of Ghana, the Ghana Bankers Association, the Association of Bank Brokers. Ghana Insurance, Real Estate Developers Association, Ghana Revenue Authority, Ghana Planning Institute, Ghana Real Estate Professional Association, Ministry of Justice and Attorney General, Ministry of Finance, Ministry of Planning, LUSPA , Ministry of Works and Housing, etc.