The Ghana’s Real Estate Agency Act, 2020 (Act 1047) is a legislation aimed at regulating the real estate sector to promote professionalism, transparency, and consumer protection. The Act became a law on December 29, 2020. This Act established the Real Estate Agency Council (REAC) as the sole regulatory body for the industry.
Key Provisions of the Act
1. Licensing and Regulation
The Act mandates that all individuals and entities (companies) engaging in real estate agency, activities such as buying, selling, renting, or leasing properties—must obtain a license from REAC. Eligible applicants include:
- Valuation and Estate Surveyors registered with the Ghana Institution of Surveyors (GhIS)
- Lawyers licensed by the General Legal Council
- Individuals with at least five years of continuous practice as real estate brokers in Ghana before the Act’s commencement
- Persons who pass a qualifying examination conducted by REAC
Operating without a license is a criminal offense, punishable by a fine of not less than five thousand penalty units and not more than ten thousand penalty units, or imprisonment for a term of not less than five years and not more than ten years, or both.
2. Cashless Transactions and Transaction Certificates
To combat money laundering and enhance transparency, the Act prohibits cash payments in real estate transactions. All payments must be made via bank draft, cheque, or electronic money transfer. Additionally, a Real Estate Transaction Certificate must be issued for each transaction, which is required for property registration with the Lands Commission.
3. Code of Conduct and Professional Standards
The Act establishes a comprehensive code of conduct for real estate professionals, outlining ethical standards and behaviors to ensure transparency, honesty, fairness, and professionalism in all transactions.
4. Trust Accounts and Agency Agreements
Real estate agencies are required to maintain separate trust accounts for handling clients’ funds, ensuring proper safeguarding and preventing commingling with the agency’s operating funds. Additionally, agencies must enter into written agreements with clients before undertaking any agency work, clearly outlining the scope of services, terms, and conditions, including fees and commissions.
5. Dispute Resolution
The Act provides mechanisms for resolving disputes between real estate agencies, agents, and clients through mediation, arbitration, or the Ghanaian court system, depending on the nature and severity of the dispute .
Operational Status and Future Outlook
As of 2024, REAC has become operational, with its headquarters officially opened in April 2024 . The Council is actively working to implement the provisions of the Act, including the establishment of a cloud-based licensing and regulation system to streamline processes and enhance efficiency.
Conclusion
The Real Estate Agency Act, 2020 (Act 1047) represents a significant step toward professionalizing Ghana’s real estate sector. By establishing clear regulations, promoting ethical standards, and enhancing transparency, the Act aims to protect consumers, foster investor confidence, and contribute to the overall development of the real estate industry in Ghana.
