Before anything, let’s answer an important question: is rent advance legal in Ghana? Looking at the laws and declarations, yes it is. It’s just the duration that’s in contention.
Like the name suggests, rent advance or rental advance is a lump-sum payment of rent to a landlord at the beginning of your tenancy. This means that if you find a place that’s going for say GHS1,000 per month, you’re expected to pay GHS6,000 for 6 months, GHS12,00 for a year and so on. While there are also monthly, weekly and even daily rent payments, those are more expensive furnished properties aimed at very short stays and are close to being hotel stays than anything.
What does the law say on Rent Advance Payment in Ghana?
Short version of the rent advance law? Taking more than 6 months advance payment is an offense.
Long version according to Section 25 Subsection 5 of the amended Rent Act 1963 (Act 220):
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 500 penalty units which is equivalent to 600 cedis or a term of imprisonment not exceeding two years.
That’s the law. But it’s totally different from the reality on the ground. The tweets below capture that reality so well.
Real estate is expensive with soaring prices and rent in Ghana is no exception. But that’s hardly the problem. According to The Conversation, it is the period over which tenants have to pay the advance rent that is the problem. It is not the rent charged that is the problem but the period over which it is multiplied to arrive at the advance rent.
Over the years, there’ve been several proclamations by government officials especially those from the rent control department warning landlords and supposedly empowering tenants against this offense. But that’s all talk.
The problem persists with no clear solution in sight. Why do landlords charge these advance rent payments in the first place? That’s a question answered in-depth by Traverse Apps. Read that here.
In this post, we list all the times government officials have warned landlords and tenants about rent advances in Ghana. As you can imagine, these are also all the times nothing has been done about it, as far back as 2015.
2010 – 2015
Don’t charge more than six months rent advanceAddo Soin Dombo (Chief Rent Controller) – January 15 via Graphic Online
The Ghana Rent Control Department has stated that no landlord has the right to charge more than six months’ rent advance.
It said it was also illegal for landlords to increase their rent charges arbitrarily.
The Chief Rent Controller, Mr Addo Soin Dombo, in an interview with the Daily Graphic in Accra, said the current situation where landlords charged two years’ rent advance was illegal.
Read the full story published by the Daily Graphic Online.
2016 – 2020
Ghanaians will pay one-year rent when the new rent bill is passedTwum Ampofo (Chief Rent Controller) – April 2018 via Pulse Ghana
A new rent bill the government is putting together will make tenants pay between one month to a year’s rent advance instead of the initial six-months in the current rent law.
In an interview with Accra-based Citi FM, Chief Rent Control Officer at the Rent Control Department, Twum Ampofo said the sector Minister is working to ensure the bill is presented before Parliament soon.
“The rent advance at the moment is supposed to be six months and the new law hoping to be passed sooner or later is actually giving us a year. We have prepared the one year advance supposed to be paid by tenants. It starts from one month to one year.”
Read the full story published by the Pulse Ghana.
Landlords who demand more than one-year advance should be reported.Samuel Atta-Akyea (Works & Housing Minister) – August 2018 via Pulse Ghana
In an interview with Accra-based Citi FM, Mr Atta-Akyea said it is difficult to find the advance landlords charge for rent.
“Why are you going to squeeze 36 months of rent advance for the person? If you condone it, the impunity gains ground, and that is where we are.”
Per the current laws governing the rent, ACT 1963, tenants are to only pay between one to six months advance rent.
But the law is not enforced as it should. This has led to some landlords demanding more than 12 months as a rent downpayment, exceeding the six-month ceiling.
Mr. Atta-Akyea said citizens must help sanitize the space.
“It is you the citizen of Ghana, very conscious that we must enforce laws for the sanity of the nation, who will go and alert the police that landlord X is trying to violate the law and should be arrested. And that is when the law will be meaningful.”
Regulating rent advance in Ghana: Ministry commits to law to limit to 6 months
The Minister for Works and Housing, Samuel Atta Akyea has assured that plans are still in place to pass a legislation to force landlords to comply with the accurate rent advance fees to be charged in the country.
In Ghana, majority of landlords take above a year’s rent advance, a situation that has been criticized by the citizenry.
In an interview with Citi Business News, Lawyer Atta Akyea said the issue will be solved soon.
“Even if you make it into law that everybody should not pay rent advance beyond three months, and the houses are not there, the shortage will bring about the rent advance demands.
“So it is the shortage of the housing unit that fuels the rent advance demands. So we need to build these houses and break the back of rent advance. We are pushing the legislation, the legislation is going to come,” he remarked.
Read full story published by CitiNewsRoom.
Gov’t to introduce new rent law with mandatory 1-year advance.Francis Asenso Boakye (Minister-designate, Works and Housing) – February 2021 via Prime News Ghana
Minister-designate for Works and Housing, Francis Asenso Boakye says the government aims at introducing a new rent law.
Mr Boakye who appeared before the Appointment Committee on February 24, 2021, for his vetting said the new law will make it possible for landlords to charge only one-year advance rent.
According to him, it is not practical for the current law that states that house owners can charge up to six months advance rent to be enforced.
“So there has been an extensive consultation and there is a widespread view that we should extend the six months advance to one year”.
It will be recalled that former Works and Housing Minister, Samuel Atta-Akyea, called on tenants whose landlords demand more than one year advance to report them for the law to deal with them.
Read full story published by Prime News Ghana.
Landlords need our permission to increase rent – Rent Control dept.Emmanuel Kposu (PRO, Rent Control Dept) – February 2021 via The Herald Ghana
The Rent Control Department says landlords do not have the right to increase their rent charges without permission from the department.
According to the PRO of the Rent Control Department, rent can only be increased after the department has conducted an assessment of the House and issued out a certificate of satisfaction.
“The landlord has no right to increase the price of his premises. The landlord should come to us for an assessment certificate. Tenants should also insist on the assessment certificate from the landlord. Landlords can’t determine how much they want to charge for their premises. Because it’s on a commercial basis you have to come to us” Emmanuel Kposu told Francis Abban on the Morning Starr Thursday.
Read full story on The Herald Ghana.
Government to institute Rental Assistance Scheme to aid rent advance payments
The government is set to institute a National Rental Assistance Scheme to provide low-interest loans to eligible Ghanaians.
Delivering the 2021 budget, the caretaker Minister for Finance, Osei Kyei-Mensah-Bonsu said the scheme will begin with seed money of GHS100 million.
“The scheme will crowd-in additional investment from the private sector to provide low-interest loans to eligible Ghanaians to enable them pay rent advance,” he added.
Ghana’s rent and housing regime in the country has been a source of concern for Ghanaians and observers.
They have called for the strict enforcement of the maximum six-month rent advance law.
Landlords are known to demand between one and three years rent advance payment from Ghanaians, which is in total contravention of the law.
The rental assistance scheme is one of four new initiatives and additional reforms across several sectors of the economy that was highlighted in the budget.
Read full story published by CitiNewsRoom.
Landlords who demand over 6 months rent advance from tenants could be jailed.Emmanuel Hovey Kporsu (PRO, Rent Control Department) – April 2021 via MyJoyOnline
Public Relations Officer of the Rent Control Department, Emmanuel Hovey Kporsu, says landlords are not mandated by law to take more than six months rent from prospective tenants.
Speaking on JoyNews’ The Law he explained that there are two types of tenancy, long and short, all which require different payment systems.
For short tenancy, he explained that, landlords are expected to take a months rent advance, however, they cannot break the contract and expect tenants to pay more than the agreed month.
“When it comes to short tenancy, you can sign an agreement with someone that ‘I will be taking monthly rent advance from you’. If you sign that agreement and now you go sideways and say ‘I have taken monthly for the first three months, now I am coming to take two months. this constitutes an offence if it comes to the short tenancy.”
Read the full story published by MyJoyOnline.
There’s been a lot of talk on fixing rent in Ghana over the years with rent advance law/regulation being one of the major solutions. This is an addition to meeting the demand for housing especially in Accra. Efforts seem to have been intensified over the last few years but whether it’ll bear fruition remains to be seen.
After all, so long as there’s someone willing and capable of rent advance payment, there’ll always be Ghana landlords ready to receive it. This has necessitated rentgages (these are just like mortgages but for rent) or rent pre-financing services by some banks, real estate agencies and startups in Ghana.