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Opinions of Thursday, 11 June 2020

Columnist: Peter Atsu Tsikata

It is time for lawyers in Ghana to get out of the real estate agency arena

The housing market in Ghana The housing market in Ghana

It is time for lawyers in Ghana to get out of the real estate agency arena for professionally trained real estate agents to practice their craft! First, let me start this article by acknowledging the overwhelming impact lawyers have made on our beloved country. This article is not meant in any way to diminish the absolutely important roles our learned friends have played in this country. Indeed, if it was not because of political agitation by lawyers during our colonial days, Ghana would not be where it is today. We would not even be celebrating every year the date 6th March, 1957 as our Independence Day, if it was not because of our lawyers! Just look at our chequered history and the role of our founding fathers, most of whom were lawyers, and the stories are legend.

Indeed, throughout our political history, lawyers have been at the forefront in every government, from Kwame Nkrumah to our various military governments, all the way to the drawing of the 1992 Constitution and our current political dispensation, where we have been blessed with peaceful transitions of power over the last 28 years. Yes, it is lawyers who have been at the forefront of every major international contract our country has signed in its developmental journey, and we owe our lawyers a huge debt of gratitude, indeed.

We thank our lawyers sincerely for signing such big contracts as they did in the creation of the Akosombo Dam, Valco, TOR, Tema Harbor, Bui Power, and all the huge oil and gas contracts entered into by our country through the GNPC, that have enabled Ghana to be an oil and gas producing nation today. Today, on the floor of Parliament, most of the elected representatives of the 275 constituencies in our country are lawyers. Just watch them rattle the Queen’s English on the floor of Parliament and you can easily separate the men from the boys! So I am in awe here to pay glowing tribute to our lawyers for their brilliance, for their intelligence, for their untouchable intellectual capacity, for their audacity and for the very significant roles they have played in our nation’s chequered history. In the field of real estate, ordinary real estate agents and brokers can never match what lawyers have done in this country, and we salute them unreservedly. Ayekoooo!

When it comes to the Real Estate Agency arena, however, I am here to tell our lawyer friends that:

A lot of them have been a complete disaster for the real estate industry.

I am here to be bold enough to appeal to our learned friends to leave the Real Estate Agency field to professionally trained real estate agents and brokers to practice their craft.

I am here to ask our lawyer friends to stop trying to dominate the Real Estate Agency field and allow job creation to flourish in this arena, so that lots and lots of university graduates in our country, who are out of school looking for jobs, could also be professionally trained as real estate agents, who may one day even create their own real estate offices, and become small business owners. This is what this country needs so desperately now!

This is exactly what happened in the United States of America, when the Real Estate Agency field was opened up to ordinary mortals who were trained, certified and licensed as real estate agents, real estate brokers, mortgage brokers and escrow officers, resulting in a proliferation of several small real estate offices, operating with professionally trained people. The same thing will happen here in Ghana if lawyers got out of the way, and practiced their learned craft in their hallowed courtrooms!

Ladies and gentlemen, I can say all this on authority because of my 30-year experience in Real Estate Agency practice, for 20 good years in the United States of America, and the last 10 years here in Ghana.

Now that we are at the cusp of having a Real Estate Agency Authority established in this country, through the Real Estate Agency Bill, 2020, when this Bill finally comes to the floor of Parliament for debate, it is time for all the wrong things we have done previously to be corrected through this Bill.

It is time for lawyers to stop hiding themselves behind the legal requirement in Ghana that only lawyers could create certain legal instruments that should be registered at the Lands Commission, thereby pushing real estate agents out of the way, and usurping the agents’ role in the transaction process as a result, and these lawyers turning themselves into real estate agents.

It is time for lawyers to stop treating real estate agents as their glorified messengers, and giving them the due respect they also deserve in their chosen profession.

Now that the Real Estate Agency Authority, soon to be created, will allow only professionally trained and licensed agents and brokers in the field, it is time for our learned friends to stay in their courtrooms to practice their craft.

For the record, Real Estate Agency is not practiced in a courtroom, and should not be treated as such. It is a field in which professionally trained real estate agents and brokers scour neighborhoods and become part of the community in which they operate.

It is a field in which Buyers and Sellers create a Principal-Agent fiduciary relationship, which enables the real estate transaction process to operate as smoothly as possible, from start to finish, without being turned into a court battle.

What else do we see in Ghana? Over and over again in this country, Buyers and Sellers come to the table, armed with their own separate lawyers, and the lawyers suddenly turn a real estate transaction into a battle to be won between two opposing sides in a courtroom!

Instead of a simple real estate transaction being concluded and closed urgently and quickly, there is a lot of going back and forth between two law offices, and real estate agents are caught in the middle, and left in total disbelief over the goings back and forth between the lawyers who have taken over the deals that THEY the agents actually originated in the first place!

The delays real estate agents experienced in this battle are simply nerve-racking!

Apart from the commissions charged by real estate agents, lawyers who dabble in our industry make it very costly for Buyers and Sellers to transact a simple real estate transaction in Ghana. They charge very hefty fees, far higher than the standard commissions charged by real estate agents, thereby costing Buyers and Sellers more than twice the fees they should be paying in the first place for a simple real estate transaction.

In other jurisdictions like the United States of America, the legal documents used in real estate transactions are already created by the various State Departments of Real Estate, with the help of lawyers who are members of the various Real Estate Associations in the State, or the legal documents are created by the Real Estate Associations themselves, only approved by the State Department of Real Estate. Such legal documents are created as FILL-IN-THE-BLANKS documents to be used by all real estate agents, without having to visit a law firm each time they have a real estate transaction to process!

This makes the process very simple, very easy, less costly, and fast enough to process, and enables real estate transactions to be closed without all the going back and forth between two opposing lawyers, who spend most of their time battling each other in courtrooms, instead of paying the necessary attention due to the real estate transactions they have taken over from real estate agents.

It is time for Buyers and Sellers to stop hiding behind their lawyers and doing the wrong things during the real estate transaction process, knowing what a herculean task it is in Ghana to take them to court if they do not honor the terms of their signed real estate contracts.

It is time for lawyers to stop Sellers from insisting on Buyers putting their deposits into Seller personal bank accounts, instead of into Trust Accounts with a neutral third party Escrow company, thereby making it very difficult for Buyers to retrieve their monies from Sellers whenever a real estate deal falls apart.

It is also time for Buyers to stop hiding behind their lawyers, pretending to have the funds to purchase a property, when they actually do not, and refusing to have those funds verified by the Seller. Instead of full disclosure upfront about their financial situation, our learned friends could do better by encouraging their Buyers to be forthright upfront and make a real estate transaction a more pleasant experience for all.

Ghana is a beautiful burgeoning country to live in, and all of us stakeholders better just allow international best practices to prevail in this country for the benefit of the many future generations to come. This is the reason behind this patriotic article, and nothing more. I know already the huge amount of push-back I will be getting from our learned friends over this piece, and I will simply be waiting patiently for them. Good morning Ghana!

Peter Atsu Tsikata CEO, Petersen Escrow & Land Title Services Ltd