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Gov’t to address landlords 2 to 3 years rent advance

Government is working on a number of initiatives to address the challenges affecting the provision of affordable housing and resolving matters involving rent, Vice President Bawumia has revealed.

These measures include the design of a policy framework to address rental issues, and the submission to Cabinet and subsequently Parliament, for approval, a new Rent Control bill to replace the existing, moribund Rent Act of Ghana (Act 220), which was passed in 1963.

The Vice President made these disclosures when he paid an unannounced visit to the offices of the Rent Control Department in Accra on 15th July, 2020.

Accompanied by the Minister for Works and Housing, Samuel Atta Akyea and his Deputy, Barbara Asher Ayisi, the Vice President was taken round by the Chief Rent Control Officer, Mr Twum Ampofo, who explained the operations and challenges involved in ensuring a peaceful rental environment.

Vice President Bawumia expressed worry about the lack of housing for low income earners, and disclosed that among others, government is working to address the uncertainties in the housing market, which has led to landlords demanding two to three years rent advance, well beyond the means of many, especially the youth who have just completed schooling and looking to enter the job market.

“The heart of the problem is one of adequate supply of housing in our country. We are going to have to look at addressing that particular issue of improving the supply of housing stock.

“The issue of Rent Control brings tenants on the one and landlords on the other, together,” he said.

“They are working under a rather old, passed in 1963, but so much has changed, and this is why Hon Atta Akyea has submitted a bill to Cabinet, for approval and subsequent submission to Parliament.

“The proposed bill would allow for more enforcement and deals with the whole issue of rent advance and its associated problems,” Dr. Bawumia.

“What we want to do is to improve the operations of the Rent Control office.

“As I have gone round today, it is clear to me that so many of these queues that we see here can be avoided through digitisation of the operations of the Rent Control Office,” the Vice President said.

“There is really no need for everybody to queue here to lodge a complaint; you could do it online. We need a database that works from all landlords, tenants and the tenancy agreement, and once these are locked in with identifying features like the National ID and Digital addresses of these properties, you will then put together a database from which you can look at any breaches of the tenancy agreement and make adjudication much easier without any long winded processes.

“Beyond that, we are looking very seriously at the issue of rent advance. Why are landlords continuously insisting on two years advance? What is clear is that there has been what Economists call a market failure.

“Tenants on the one hand know whether they are going to be able to pay the rent or not. Landlords on the other hand don’t know if this tenant will pay the rent or not, so to protect themselves they usually want a large advance. Meanwhile the tenant doesn’t earn enough to pay this large amount,” he said.

“This is what the President has asked us to look at. How do we address this market failure? We are addressing it in a number of ways. The stock of housing must go up, especially the stock of low income housing.

“But to address this asymmetry of information between the landlords and the tenants, you need the government to come in to provide a bridge, so that whether it’s through insurance or guarantees, landlords can be a little more confident that these tenants will pay,” he added.

“We are going to address this issue, we have some proposals which we will announce soon, to address the whole issue of rent advance, to modernise and digitise the Rent Control office.

“This is where the national ID and the digital addresses come into play. We have clear proposals that we will be announcing to the nation soon,” Vice President Bawumia indicated.

 

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