Surv. J. Zinzi Ayitey Senior Lecturer, KNUST; FGhIS, a public-private dialogue platform facilitator at a key stakeholder workshop organized by the Ghana Chamber of Construction Industry under the auspices of the Ministry of Public Works and Housing funded by BUSAC FUND and its donor partners DANIDA and USAIAD, presented a well-detailed document on the Real Estate Agencies Bill which is currently in Parliament and has passed second reading pending its passage into law before the end of this current legislature.
The purpose of the bill is to regulate the practice of real estate agencies, the conduct of real estate agency practitioners, real estate business transactions, 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 each country and especially for the financial market due to the large monetary transaction involved. Ghana, like all other economies, has a long history of real estate agency.
The practice has grown considerably in recent years as the real estate market has become more active with the buying, selling and leasing of real estate as an asset class and also for occupancy.
The role of the real estate broker has traditionally been that of intermediary between the buyer and the seller of real estate. One of the results of the increased activity in the real estate market has been the influx of people who have introduced fraud into the business.
Many real estate brokers and agents do not have specific training in real estate agencies and many others do not have identifiable office space. Real estate investors who deal with real estate brokers have no guarantees against fraud and many have been defrauded.
In addition, a glance at the real estate sector shows the lack of proper internal control mechanisms, policies, training and audit systems, among others, which make the sector attractive to criminals.
Real estate transactions, by their nature, involve huge sums of money and for this reason it is necessary to ensure that practitioners of real estate agencies and parties to real estate transactions keep records of their transactions for their own purposes. tax.
The lack of record keeping by most real estate practitioners and parties to real estate transactions makes it impossible to pay tax on income from transactions. This deprives the government of the revenues necessary for development purposes.
Another disadvantage of the current state of real estate agency practices is the promotion of unhealthy competition between legitimate and criminal businesses, as investment in the real estate sector offers benefits to legitimate law-abiding individuals and businesses and to law-abiding individuals and businesses. criminals who abuse the system. The socio-economic impact is important but not easily measurable.
It is therefore necessary to regulate the services of real estate agencies to rid the industry of fraud, illegal income laundering and tax evasion in order to minimize the effect of these vices on the national economy and improve the economy. international image of the country.
In addition, Ghana, as a signatory to international conventions on corruption, including the African Union Convention on Preventing and Combating Corruption and the United Nations Convention against Corruption, must adhere to international standards of corruption. prevention of money laundering.
Some studies have identified real estate transactions as a way to launder money. There are various ways to launder money in the real estate industry, including buying properties directly for cash, using fictitious names to buy properties, and using third parties or trusted men to buy properties. properties.
So, in the country’s quest to adhere to international best practices, the bill seeks to block the channels in which real estate transactions are used to launder money, including a ban on the use of cash for transactions. real estate. This will ensure detailed tracking of transactions and of the people involved in real estate transactions.
Passage of the bill will go a long way in strengthening anti-corruption initiatives in the country and combating money laundering and other financial embezzlement in the sector. This will also be in the interest of good governance and will give the country a better position in subsequent assessments of the International Task Force against Money Laundering in West Africa.
The disproportionate effect of the bill will be the consolidation of the entire real estate market and the protection of all participants and the improvement of tax revenues for development.