The Controversies of The Rent Control Laws In Ghana

Rent control laws in Ghana has always been controversial. The price hikes for lease renewals are most frequently regulated by the rent control laws in some parts of the world today.  Rent control laws place restrictions on the amount of rent that landlords may charge. In rental markets with high market prices, rent regulation is meant to keep rent reasonable. Although rent control is a very straightforward concept, if you intend to put your rental properties on the market, it may have an impact on you. You could run into legal problems with the government if you violate the rent control laws. Does this law, however, simply benefit tenants? Are tenants the only subject?

In this article, we’ll discuss the RENT ACT, 1963 (ACT 220) in Ghana, the tenants’ rights and interests, the landlord’s obligations, and—most importantly—some dos and don’ts. We’ll also examine other reviews that the government hasn’t yet implemented that might help both tenants and landlords manage their housing costs more effectively.

THE RENT ACT, 1963 (ACT 220)

In Ghana, the primary laws controlling landlord and tenant law are THE RENT ACT, 1963 (Act 220). The tasks of its administration, as well as the duties and rights of tenants and landlords, are set down in THE RENT ACT, 1963 (Act 220), which consists of 8 parts and 38 sections. This law was enacted on December 12th, 1963, and has not been reviewed since then. The purpose of this ACT is to codify and revise the law governing rent control, the recovery of premises’ possession in certain circumstances, the amendment of certain provisions of existing statutes, and the provision of matters related to or incidental to those laws.

IS IT ONLY ABOUT THE TENANTS?

Although the Act 220 seems pro-tenant bias, it also contains a number of measures that safeguard the landlords’ obligations and rights. In Ghana, landlords are subject to a set of legally binding guidelines and requirements enshrined in Act 220. These regulations outline the duties that landlords have to their tenants while renting out their rental property and are enforced by the Ghana rent control agency. Knowing your legal responsibilities as a landlord will make investing in real estate as simple and stress-free as possible by assisting you in preventing disputes, maintaining the integrity of your rental property, and managing your tenants.

Some of these obligations are mentioned as hereunder:

    •    According to Section 20 of the Act 220, landlords of any properties with monthly or shorter leases must provide the tenant with a rent card within seven days of the tenancy’s start date that includes the landlord’s name and address, the tenant’s name and address, the amount of the property’s recoverable rent, and any other required information. If any information on a rent card has been changed, the landlord must get a copy of the rent card from the tenant and make the necessary changes within seven days of the change being decided upon.

   “Recoverable rent is the maximum amount which a landlord may lawfully receive for premises.”

    •    According to Section 21 of the Act 220, in the case where a tenant who has made improvements to his premises with the landlord’s approval is requested to vacate his premises before the prescribed period, the landlord of such premises shall pay compensation for the improvements as may be ordered by the appropriate Rent Officer within such period as may be specified by him.

HOW DOES ACT 220 SAFEGUARD THE INTERESTS OF THE TENANTS?

    •    Advance payment of Rent: Landlords are not allowed to request more than six months’ worth of rent in advance, per Section 25(5) of Act 220. It states that any person who as a condition of the grant, renewal or continuance of a tenancy demands in the case of a monthly or shorter tenancy, the payment in advance of more than a month’s rent or in the case of a tenancy exceeding six months, the payment in advance of more than six months rent shall be guilty of an offence and shall upon conviction by the appropriate Rent Magistrate be liable to a fine not exceeding one hundred pounds.

    •    Act 220 safeguards tenants from arbitrary and illegal evictions. The Act makes it clear that a tenant is not instantly evicted from a property after filing for eviction. The eviction process includes laydown processes, which can take some time. Landlords may evict tenants under Section 17 for a variety of reasons, including;

    •    Tenant failure to pay rent – This occurs when rent is lawfully due and unpaid by the tenant within a month of the date it became legally due.

    •    Tenant causing a nuisance to other tenants: This occurs when the tenant, or any individual residing with him, has engaged in behaviour  that causes a hassle for next-door tenants. Tenants who interfere with other tenants’ peace may be asked to evict the premises by their landlords.

    •    Tenants involved in illegal activity: When a tenant, or any person residing with him, has been found guilty of using the property for an immoral or illegal purpose, or of permitting the property to be used for such a purpose, the landlord may evict the tenant.

    •    In accordance with Section 19(1), landlords are not permitted to collect rent increases brought on by rate increases without providing prior notice. The amount of the old rates, the amount of the new rates, and where a portion of any premises has been let, the amount of the rates attributable to such portion, as well as the amount of the increase in rent and the date from which the new rates take effect, must all be communicated to the tenant in writing prior to the landlord collecting any increase in rent attributable to an increase in rates in respect of those premises.

OFFENSES

In accordance with Section 25, Any person who, in relation to any premises, commits an offense and is found guilty by the appropriate Rent Magistrate is subject to a fine of no more than £100, a period of imprisonment of no more than six months, or both such fine and imprisonment if they;

    •    Demand or receive more than the recoverable rent for such premises notwithstanding any lease to the contrary.

    •    Demand or receive any consideration, whether in money or in kind or in any other manner whatsoever and whether by way of rent, fine, premium or otherwise, for the grant, renewal, continuance or assignment of any tenancy.

    •    Being or acting as an agent, broker, or go-between, asks or receives any payment greater than 5% of the recoverable rent for one year of such premises in exchange for his services in connection with obtaining any grant, renewal, continuance, or assignment of a lease.

    •    Demand or receive any price or consideration for the purchase or hire of any furniture, fittings, fixtures, or other items in excess of a reasonable price or payment and does so as a requirement for the grant, renewal, continuance, or assignment of any tenancy.

    •    Enter into or carries out any fictitious or artificial agreement which has effect of attempting to defeat the objects of this Act.

REFORMS: LEGISLATION THAT HAS NOT YET BEEN PASSED

    •    By recommending a change to Ghana Rent Act 220, which was introduced in 1963, the government has attempted to step in and curb the power of landlords. One of the many changes made by the Act is the suggestion of a monthly rent payment as opposed to the 6-month advance rent payment specified by the existing law.

    •    The new Ghana Rent Act bill aims to transfer authority from landlords to the Department of Rent Control, which serves as the intermediary. The new law would require the Department of Rent Control to establish a cap on regular rent in order to stop landlords from taking advantage of needy tenants.

    •    In November 2022, Mr. Francis Asenso-Boakye, Minister for Works and Housing, stated at the Meet the Press weekend event at the Information Ministry that the existing law, Act 220, passed by Parliament 59 years prior, had lost its relevance due to the current urbanization and population expansion. In order to address issues with housing availability, rental costs, housing redistribution, and eviction restrictions that had taken over the housing industry, he claimed that the law needed to be modified. He quoted from the bill, saying that it was against the law for a landlord to request rent payments in advance for periods more than one month in monthly tenancies, less than one month tenancies, or longer than one year in tenancies lasting longer than one year. Additionally, he said that if the law is approved by Parliament, it would offer incentives and remove built-in limitations that would encourage private sector investment. This will ensure that strict rent control measures, which artificially restrict chargeable rent to low levels, do not deter property developers from making investments in the housing sector.

CONCLUSION

Though the mandate granted to the Rent Control Office to set a price ceiling on rent lessens their authority over pricing and dictating the terms of payment, does this bill appear unfriendly to landlords? Or does the new law appears to be a defence against some landlords’ unfair practices, including unlawful contract termination, eviction, and exorbitant rent advance requests, will tenants searching for flexible rental property find it easier?