The facts on the ground
In the land of weak laws, the landlord is royalty. Treasure a landlord who accepts a six-month advance rent payment for housing premises, because none of them do. Very few are kind enough to accept payment in installments for their demanded one, two, or three years rent advance. Some rent out literally uncompleted buildings; the rationale is to use these advance payments made by tenants to complete said buildings. Low-income earners would be the ones to opt for such apartments, no? Well, interestingly such landlords are the most stubborn about their advance rent demands. They are first to refuse one year’s advance. Why, didn’t you hear him?—he needs the money to complete the building!
Landlords increase rents at whim; they evict tenants capriciously. Some landlords having taken these illegal and enormous advance rents refuse to furnish tenants who decide to vacate the premises their balance. Some landlords, in cases of apartments with shared utilities, inflate prices of electricity and water bills and charge them to tenants.
Most of these acts have, throughout the nation’s various rent control regimes, remained criminal offences, yet have bizarrely been and remain largely committed.
There is also the ‘okyeames’—agents. The middlemen who have for years loomed so broad that the gap between prospective tenants and landlords grow larger by the day. These agents have their marks plastered on every renting apartment. A house-hunter has to pay a sum the agent term ‘viewing fee’—because your eyes will see Canaan, but your feet… So this ‘viewing fee’ is what strips these renting houses of their invisible cloaks, and makes them accessible to prospective tenants.
Then, there is the commission to be paid these agents—that is not the landlord’s problem, it is the tenant’s. Ten per cent is the lowest commission an agent charges. And what was the number of years in advance the landlord requested of you the tenant? Is it one, two, or three years?—whatever that be, you are paying 10% (or more) of the accumulated sum for those year(s) to the agent.
There is an opportunity here for the agent to rake in larger sums per tenant—have you figured it out yet? First, 10% of two or three years rent advance is exponentially larger than a one year’s rent advance. So why not speak to landlords to refuse one year’s advance in favour of two or three years? This way both parties win—both parties on the supply end, that is (the agent and landlord); to the detriment of the tenant, of course. Secondly, if one, two, or three years rent advance on a two, three, four (and so on) bedroom apartment is undoubtedly larger than a single-room apartment’s, why not advise landlords to favour building such multiple-room apartments over single rooms? So this too is the prevailing situation—in a market awash with low-income-earning house-hunters.
But you say to the house-hunter, “Why not skip agents and find these renting apartments yourself?” ’ If you happen upon any apartment without the mark of an agent, kindly give me a call. The Ghanaian agent is indomitable. In fact, certain landlords are uninterested in speaking to house-hunters who do not come through agents.
And there is the—what I term—ad hoc agent. That man standing by the road you asked for directions to a renting building, suddenly transforms himself into a ‘professional’ agent, and will insist upon a ‘viewing fee’ and, ultimately, commission. One of the tenants of that apartment you finally saw renting—who is to give you the contact of the landlord—is surprisingly also an ad hoc agent. The financial poking of the (prospective) tenant is quite a pitiful sight, especially in a largely ‘striving to make ends meet’ economy.
Different approaches; the same failures
And this isn’t even a lawless country; yet why this historic, persistent lawlessness in the rent regime? Why do the Rent Act, 1963 (Act 220) and its amending legislation, The Rent Control Act, 1986 (PNDCL 138) receive no respect? Why are the majority of the populace, the driving force of the nation’s economy denied constantly peace of mind—their right to shelter?
Our response to non-compliance of rent laws has since the 1940s, been to re-legislate; when, in fact, the main reason for ineffectiveness of the laws has been ‘enforcement’.
I mentioned last week the ridiculousness of approaches by legislations such as Act 220, which provides for the assessment of rent charges of individual premises by rent officers. But, the truth is, this may be one of those ideas that sound silly after the fact—the fact that they did not work. For an effective rent control department system could have effectively, indiscriminately, un-corruptly ensured the realisation of such legal provisions.
Look at the series of amendments that followed Act 220, all in varying and various degrees changing certain provisions of the Act. These amendments introduced a second approach which involved legally fixed, standardised rents for the differing classes and types of apartments. NRCD 158 (1973), AFRCD 5 (1979), PNDCL 5 (1982) all sought to employ, to varying extents, this mode of rent control—all failed. 1986 spawned PNDCL 138, intending it a perfect blend of both approaches.
If both approaches, operating distinctly failed, why not combine them—their good parts, that is? So PNDCL 138 provides for the rigidity of the first approach all the while allowing for the flexibility of the second approach by empowering the Rent Control Department to make assessments of premises with the fixed rates as guidance. We are, however, presently witnessing yet another failure.
What major revolutionary cards is the law then left to play if this approach under PNDCL 138 is proving too ineffective?—it, being an accumulation of legislative and national experiences, still fails to maintain a grasp of the system. The law is perhaps not our main problem; it is enforcement that has failed all these years to keep its end of the bargain. The Rent Control Department wears such crucial crown in the rent regime that its ineffectiveness is sure to cast a shadow on whatever legal reform we concoct. If they do badly; the law does badly.
We must recognise too, the importance of other factors outside the law (rent control regimes), in our bid to fashion out a favourable rent environment. For one, public housing cannot be made to remain puny contributors to the nation’s housing sector.
There is talk of yet another legal reform. And certain policy recommendations flying around are enough to make the renting populace antsy…
From Yao Afra Yao’s