Oppong Nkrumah directs opening of Real Estate Agency Council office by April

Minister for Works and Housing, Kojo Oppong Nkrumah, has issued a directive to the board and management of the Real Estate Agency Council (REAC) to ensure the opening of the Agency’s offices by April this year.

Established by law in 2020 through the passage of the Real Estate Agency Act, 2020 (Act 1047), REAC was mandated with regulating the real estate sector to ensure fairness and transparency in transactions.

However, since its establishment, the Agency has yet to open its doors to the public.

During his first working visit yesterday, Minister Oppong Nkrumah emphasized the urgency of getting REAC fully operational to effectively regulate real estate transactions.

He underscored the importance of minimizing the difficulties citizens face when engaging in real estate transactions.

“The contractor tells me he wants to use a little over two months to finish the work, but I have tasked him to finish the work by the end of April,” stated Oppong Nkrumah.

“We want to get the Agency functioning so that they can serve our citizens and minimize the challenges they encounter during real estate transactions,” he added.

Despite the passage of legislation to establish and operationalize REAC, the Agency has faced delays in executing its mandates.

While the Council has been sworn in, its functions remain dormant, with the Chief Executive Officer (CEO) working from the Ministry of Works and Housing rather than from REAC’s headquarters.

Addressing these challenges, Minister Oppong Nkrumah stressed the need for swift action in establishing REAC’s offices.

He expressed concern over the delay in operationalization and assured that plans are underway to secure funding for the furnishing and staffing of the offices once completed.

In response to the Minister’s directives, REAC CEO, Nana Otu Turkson, expressed gratitude for the visit and seized the opportunity to shed light on the challenges confronting the Agency.

He outlined several key issues, including a staff deficit, logistical constraints, the need for funding to support day-to-day operations, and the requirement for a cloud-based system to facilitate remote engagement with clients.

Mr Turkson’s acknowledgment of the Agency’s challenges underscores the importance of addressing these issues to ensure REAC can effectively carry out its regulatory responsibilities in the real estate sector.

The staff deficit and logistical constraints may hinder the Agency’s ability to operate efficiently, while insufficient funds could further exacerbate these challenges.

Purpose of the Real Estate Agency Act, 2020 

The Real Estate Agency Act, 2020 (Act 1047) (the “Act”) was enacted to regulate real estate agency practice, including the sale, purchase, rental and leasing of real estate.

It also introduces licensing of real estate agents and brokers.

Which real estate transactions does the Act regulate?

The Act regulates real estate transactions including the sale, purchase, rental and leasing of real estate.

The Act applies only to transactions in which there is a principal-agent relationship for instance between a real estate agent or broker and a client.

It does not apply to real estate transactions in which a person acts in their own capacity, as an employee, as a trustee pursuant to a court order or where there is no principal-agency relationship.

How does the Act affect real estate agents or brokers?

Every real estate broker or agent seeking to operate in Ghana must obtain a license from the Real Estate Agency Council (the “Council”).

Additionally, engaging in a real estate transaction in that capacity without a license is a criminal offence.

All real estate transactions must utilize the official real estate forms provided by the Council.

Who can obtain a license as a real estate agent or broker?

The four categories of persons who may obtain a license to operate as real estate brokers or agents are: (i) qualified lawyers, (ii) registered valuation and estate surveyors, (iii) licensed real estate brokers or agents from other countries and (iv)any person who passes a qualifying examination conducted by the Council.

In the case of a corporate entity, at least one of its officers or partners should be appointed as the representative to obtain the license.

What does the qualifying examination entail?

A person who is required to take the qualifying examination must demonstrate competence through a fair understanding of the principles of real estate practice, real estate law, basic law of agency, rudimentary principles of economics, professional ethics of real estate agency and the provisions of the Act.

Persons who have prior qualification and experience in any of the courses may be exempted from taking an examination in those courses.

The examination comes at a fee to be determined by the Board.

Are there any other application requirements?

An applicant must provide a professional indemnity insurance cover or evidence that the person has engaged a surety company duly licensed in Ghana to execute and submit a professional indemnity insurance cover on his behalf.

The person must also have a Tax Identification Number (TIN) and an ECOWAS Identity Card (Ghana Card).

What is the duration of the license?

The license is valid for one (1) year and may be renewed.

The license cannot be transferred to another person.

Under what circumstances may the license be revoked?

A license under the Act may be revoked where the license holder fails to use the Council-approved real estate forms for real estate transactions, accepts a cash payment for a real estate transaction or fails to pay money received in a client’s account to the client within a period not exceeding one (1) month[10] or where the Counsel determines that the license was obtained by fraud.

How does the Act address conflict resolution in real estate transactions?

The Act establishes an Appeals Committee to receive, administer and redress complaints lodged by persons.

Decisions of the Appeals Committee may be further reviewed by the High Court.

The Act also permits parties to a transaction to explore Alternative Dispute Resolution under the Alternative Dispute Resolution Act, 2010 (Act 798).