Unlicensed Property Agents Inflate Housing Costs in Ghana

Unlicensed property agents are playing a major role in driving up rental costs in Ghana, with the Rent Control Department warning that collusion between brokers and landlords is distorting the housing market and forcing tenants to pay far more than legally required.

Senior Rent Officer and Head of Public Relations Emmanuel Xove Kporsu told CitiNewsroom that unregulated agents routinely push landlords to demand advance payments of up to two years, despite the law capping such demands at six months. Speaking on Channel One TV’s Breakfast Daily programme, Mr Kporsu said the behaviour of some agents had become a significant contributor to housing unaffordability across the country.

“You cannot sit under a tree and call yourself an agent. It is an offence to call yourself an agent if you do not have your licence. The space will be regulated,” Mr Kporsu said, pointing to the Real Estate Agency Act of 2020 which established a regulatory council to license practitioners, prescribe approved fees and enforce professional standards.

The Act, passed by Parliament to bring order to the sector, created the Real Estate Agency Council (REAC) as a corporate body to facilitate and regulate real estate agency services in Ghana. REAC is mandated to register and license professionals and entities, set conduct standards, resolve disputes and enforce provisions of the law. The Council requires agents to pass qualifying examinations demonstrating competence in real estate practice, real estate law, agency principles, economics and professional ethics. Licences are valid for one year and are neither transferable nor renewable without meeting fresh requirements.

Despite this regulatory framework, enforcement remains weak and many agents continue to operate informally without certification. Mr Kporsu explained how this contributes directly to rent inflation: “The agent is a contributor to the high rent in Ghana. The law says the landlord does not have the right to demand more than six months’ rent advance, but the tenant has the right to pay more than six months. The issue is that the agent colludes with the landlord to demand two years because they feel their fees are small if they take only six months.”

Ghana’s Rent Act of 1963, as amended, prohibits landlords from demanding more than six months’ advance rent for tenancies exceeding six months, and no more than one month’s rent for shorter tenancies. Violation of this provision is a criminal offence punishable by a fine of up to 500 penalty units or imprisonment of up to two years, or both. However, the law’s enforcement has been virtually non existent, with successive government officials acknowledging the gap between statute and practice.

Academic research confirms the severity of the problem. A study published in the Journal of Housing and the Built Environment found that over 70 percent of surveyed renters paid rent in advance, typically for periods ranging from two to five years, with 27 percent paying for six years or more. The same study found that 63 percent of renters had no formal contractual agreements with their landlords, leaving them especially vulnerable to exploitation. Research published in the Advances in Social Sciences Research Journal similarly found that 72 percent of respondents had paid advance rent, with many taking on debt to satisfy landlords’ demands.

The financial burden on tenants is substantial. With average monthly rents for modest self contained rooms ranging from GH¢1,000 to GH¢1,500, annual rental costs alone reach GH¢12,000 to GH¢18,000. When landlords demand two years upfront, tenants must somehow mobilise between GH¢24,000 and GH¢36,000 in a single payment, a sum that far exceeds the financial capacity of most households. Researchers have documented how this practice transforms renters into perpetual borrowers, limits personal development and alters savings behaviour.

The 2021 Population and Housing Census shows that about 34.6 percent of Ghanaian households occupy rented dwelling units. The proportion rises to 46 percent in urban areas, with Greater Accra Region recording 47.6 percent and Ashanti Region 40.6 percent. Rapid urbanisation has intensified housing demand in major cities, with Ghana’s urban population now exceeding 56 percent of the total population. The country faces a housing deficit estimated at approximately two million units, and housing delivery reaches only about 33 percent of annual needs.

Industry observers note that many unlicensed agents charge non refundable viewing fees of GH¢150 to GH¢200 before showing properties, even when tenants never secure the home. Once a lease is agreed, agents often demand commissions of 10 percent of total rent, which can amount to thousands of cedis for multi year leases. This practice not only burdens tenants but also encourages speculative rent setting, as landlords anticipate that agents can pressure tenants to accept inflated prices.

The Rent Control Department’s warnings carry significant implications for both tenants and investors. For households, excessive advance payments drain cash flow and limit ability to save, invest or manage other expenses. For developers and investors, market distortions risk reducing rental fluidity and occupancy rates if prospective tenants are deterred by prohibitive upfront costs.

Mr Kporsu’s remarks signal renewed attention to an issue that has persisted for decades despite existing legal protections. Whether the Real Estate Agency Council can effectively enforce licensing requirements and bring discipline to the sector remains to be seen, but the Rent Control Department is making clear that the status quo cannot continue.