Unlicensed Property Agents Face Up to 10 years in Jail as REAC Tightens Enforcement

 

Real estate agents and brokers operating without a licence in Ghana could face up to 10 years in prison under the Real Estate Agency Act, 2020 (Act 1047), as the Real Estate Agency Council (REAC) warns practitioners against violating the law.

The Council says offences such as operating without a licence, falsifying documents and accepting cash payments could attract criminal penalties, while other breaches may lead to fines, suspension or revocation of licences.

David Pappoe, Head of Anti-Money Laundering and Compliance at REAC, said the law prohibits anyone from providing real estate services as a broker or agent without a licence from the Council.

“Section 22 says that no person must provide real estate services as a broker or agent, or engage in any transaction without a licence from REAC. So, that means when you operate without a licence, it’s a criminal offence,” he said.

Mr Pappoe was speaking at a webinar organised by the UK-Ghana Chamber of Commerce and Akka Kappa Ghana Ltd. on compliance and enforcement in Ghana’s real estate market.

He said administrative breaches could attract a fine of 1,000 penalty units, which he put at GH¢12,000. For criminal offences, he said, the penalties ranged from 5,000 to 10,000 penalty units or five to 10 years’ imprisonment.

He also cautioned practitioners against accepting cash for property transactions, saying the law required the sector to operate on a cashless basis.

“It is a cashless sector now for real estate. Not even GHS1 must be taken in the form of cash…When you accept cash, then it means you are in breach of the Act,” he said.

Buyers urged to check agents’ licences

REAC has urged prospective property buyers to verify the licence status of agents, brokers and other practitioners before engaging their services.

Mr Pappoe advised the public to report suspicious financial transactions to the Financial Intelligence Centre (FIC), while complaints involving clients, developers, brokers and agents should be directed to REAC.

Ethel Elizabeth Abruquah, a lawyer at Legal Ink in association with Clyde & Co, said buyers should also conduct independent checks on properties before making payments.

“Before committing to acquiring property in Ghana, it is very important to make your own independent verifications,” she said.

She recommended verifying ownership, conducting searches at the Lands Commission and seeking legal advice where necessary.

Ms Abruquah added that real estate practitioners and lawyers covered by Ghana’s anti-money laundering framework were required to verify customers, report suspicious transactions and keep the necessary records.

REAC targets unregistered operators

Acting Chief Executive Officer of REAC, Emmanuel Jeffrey, said licensing was a key part of efforts to identify practitioners and improve oversight of the sector.

“The most important thing for me is the licensing,” he said, explaining that the Council wanted to ensure that people operating in the industry were registered and captured in its database.

He said REAC was working with institutions including the FIC, Bank of Ghana, Lands Commission and Ghana Revenue Authority to improve compliance.

The Council is also collaborating with local assemblies and other stakeholders to address the activities of unregistered operators advertising properties.

Established under Act 1047, REAC is responsible for licensing and registering practitioners, maintaining a national register, setting professional standards, inspecting premises and enforcing discipline in the industry.

The law covers developers, brokerage firms, brokers, agents, property managers, marketers, salespersons and other individuals providing real estate services.

Practitioners are also required to use REAC-issued forms, maintain separate client accounts, retain records for at least five years, submit quarterly transaction reports and annual audited accounts, and obtain professional indemnity cover.

Industry backs tighter regulation

Edoardo Castagna, Director of Akka Kappa Ltd., described REAC’s establishment as an important step towards professionalising the real estate industry.

He said difficulties verifying property ownership, gaps in information and the continued presence of informal operators remained challenges for buyers and investors.

He expressed hope that greater public awareness of REAC’s role would help people distinguish licensed practitioners from unregistered operators and improve confidence in the market.

The webinar, moderated by Michael Taabavi, Trade and Investment Advisor for Infrastructure and Energy at the UK Department for Business, Innovation and Science, also examined licensing requirements, anti-money laundering obligations and REAC’s code of conduct and ethics.