Attempted Prophecies: #Stay Home. #Stay Where? part 2


The facts on the ground

In the land of weak laws, the landlord is royalty. Treasure a landlord who accepts a 6-month advance rent payment for a property being rented to you, 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 stubbornest about their advance rent demands. They are first to refuse one year’s advance rents. You are asking why? Didn’t you hear them? They need the money to complete their buildings!

Landlords increase rents at whim; they evict tenants capriciously. Some landlords having taken these illegal, enormous advance rents, refuse to furnish tenants who decide to vacate their buildings their balances. Some landlords, in cases of apartments with shared utilities, assume the role of the nation’s ECG and GWCL, 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 is required to pay a sum the agent terms ‘viewing fee’—because your eyes will see Canaan, but your feet… So, this viewing fee is what strips these renting houses off 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. 10% 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 they may 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 advances in favour of the two or three years option? 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 1, 2, or 3 years rent advance on a 2, 3, 4 (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 awashed with low-income-earning house-hunters, the nation’s primary source of housing providers, the private sector, are erecting buildings that are increasingly failing at serving the needs of the nation’s most needy.

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. You can say they have signed this landlord-agent pact that we the rest are yet to find out about.

And there are the—what I term, and my personal favourites—ad-hoc agents. That man standing by the road you asked for directions to a renting building, suddenly transforms himself into a ‘professional’ agent, and will insist on a viewing fee and, ultimately, commission when you are lucky and actually nab that apartment.

One of the tenants of that renting apartment you finally stumbled upon—who is to give you the contact of the landlord—is surprisingly also an ad hoc agent. Viewing fee? Well, yes! If your lawyering skill is scant and are unable to tactfully argue that since you have already viewed the apartment, a viewing fee would be plain extortion, you might just end up paying said viewing fee to this tenant who will argue that giving you access to his/her room to “see how the apartment is like on the inside” qualifies as viewing.

But you are a good self-declared lawyer; you argue your case against this tenant well. It is then that he/she surprises you by declaring that the building is in fact full. What do you do? Do you sit and wait for the landlord (who you do not know by the way) or any of the other tenants to return from wherever it is they have gone to? Or do you follow this same tenant to that other place in the neighborhood he/she claims to know to be renting? That is a building you haven’t ‘viewed’ yet, is it not? So, there you go…’viewing fee’.

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 itself 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 also proving 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. Left to the private sector alone, the laws of demand and supply will assume their most extreme forms when it comes to the provision of housing for the populace, and leave us all in a jungle—a financial jungle.

No evil—a caveat

With no numbers to prove, I dare say, in a global ranking of the world’s greediest private sectors, Ghana would rank very low. Countries like USA, recognising this inevitable insatiable thirst of private individuals/businesses, tries to institute laws and follow through with institutions for the enforcement of such laws; although sometimes the nation completely leaves the private sector to their devices. But that is a topic for another day.

That being said, I do not intend this ‘#Stay Home; #Stay Where?’ series, an indictment of the nation’s landlords. The Ghanaian landlord is no devil. They are just businessmen/women ‘blessed’ with a whole lot of wiggle room—courtesy of problematic law enforcement mechanisms.

The human race, worldwide, easily turns savage in the absence of law or the enforcement thereof, and we hinted at that in the article ‘We The People, By The Power Vested in Us By The Constitution, Say No!’ I mean, why at all should there be a law for the protection of a person’s own head, literally, like in the case of traffic regulations regarding helmets. And why should a person, knowing that such law is directly for their own good, break them in the absence of law enforcement?

Take yourself, a businessman/woman who has ventured into the local manufacturing, or import of say, spices. You acknowledge—your law-abiding self—the duty to get your products through the Food and Drugs Authority’s certification; and you want to—really want to. But take that the situation around you is this: people get away with non-compliance. All around you, you see such products on the market sans the mark of the FDA.

And you have lying before you, with the FDA, an entire process of submission of documentations, of payments: Licensing of Food Premises, Food Product Registration Fee, Licensing of Food Storage Facilities, Site Verification Fee, etc. You are tossed about endlessly as you navigate this bureaucracy. Tell me, how quickly would you forgo this process in favour of joining your ‘uncertified’ peers? You will soon realise that in the absence of a law keeping watch, following the law begins to make less and less ‘business sense’.

Such is the landlord’s dilemma. In a developing country such as ours, where the housing deficit remains still a grave national concern, we cannot afford to team up against these private individuals who are doing their part to provide homes for a vast majority of Ghanaians. Even as early as the late 1950s, post-independence, when state involvement in the provision of housing was at its peak, a large chunk of the nation’s housing was provided by the private sector—around 80%. And even now, six decades later, the private sector contributes about 90% of the nation’s housing stock.

The Problematic Saviours

Any proposal for the alignment of the law with the facts on the ground—for the changing of the rent advance provision from the 6-months maximum stipulated by the Rent Act, 1963 (Act 220) to one year, would be, in principle, perhaps sound. After all, doesn’t it make for a good legal regime if societal circumstances go on to directly influence the law? Yet, such an amendment would be missing the point. It may mark the beginning of the succumbing of the law to the harsh conditions the laws of demand and supply has created in the country’s housing sector—conditions which arose out of the non-enforcements of the law, in the first place.

Admittedly, a tenant cannot deny the one year or so of peace they get after paying such advance rents. Because when such bulk sums are paid, the landlord, for one, cannot at whim wake up one day of a month and decide that the following month’s rent is to increase, blaming it on say, the increase in fuel prices. But for many, such peace is a luxury they cannot afford—thus a monthly burden (or at worst a 6-month advance burden) seems like a more off-loadable burden.

Any proposal for the amendment of the 6-months maximum rent advance provision stipulated to just one month, may just be overreaching. This is, I dare say, a funny and an uninformed leap. Because for many years, even this 6-months maximum stipulated by Act 220 has not been complied with. The Rent Control Department has been unsuccessful enforcing it. It would be pretty misguided to make matters worse by further stripping down the bulk of money a landlord may require of a tenant.

This history of non-compliance makes such a leap outrageous; an outrageous law is prone to breakage. This may only serve to further alienate the law from reality. In a nation where the demand for housing far beats supply; in a nation where the private individual has been and still remains our best bet at closing this gap, such a law may only serve to discourage investment in housing by private individual.

More Power to Rent Control?

It would make great sense to further expand the power of the Rent Control Department as an equaliser, a mediator in ensuring fair dealings between landlords and tenants—if the institution had an outstanding record of getting things done. But sadly, that isn’t the case. Hence, any policy recommendation that suggests giving the institution even more power than it has now is undoubtedly cause for great concern.

Like the suggestions that the institution may, per new legislation, have the ‘sole responsibility of drafting tenancy agreements’; and that it will ‘shift power from landlords to the Rent Control Department’—all sound great on paper, but in actuality what can easily be envisioned is not a Rent Control Department as ‘mediator’ but as further ‘middlemen’.

The institution may end up—if extreme supervision and accountability is not required of them—adding to the tenant’s burden of ‘ad-hoc agents’; more palms for desperate tenants to grease towards the attainment of apartments. And this concern is not necessarily directed at present managements of the Department, but to future administrations too.

What measures will be set in place to prevent the Department from exploiting desperate tenants? They sure have been of scant help to tenants up till now.

Perhaps the nation ought to first test and perfect its enforcement prowess by ensuring full compliance to the law as it is now—to Act 220 and PNDCL 138 before it wantonly jumps into re-legislating. Because those provisions have the potential to bring enormous relief to the Ghanaian tenant, without—arguably—causing unfair discomfort to the landlord.

See, because you have been to the Rent Control Department before, and the best response you got was a smirk and an ethnocentric inquiry at what is perceived as litigious nature, “Eii why, are you an—?”  You innocently respond, “No.” And this onlooking rent officer, finding out that you, in fact, belong to his tribe devolves into a tirade of how pathetic it is that his tribesmen are no longer teaching their children their language.

All the while, you see, at the corner of your eye, someone signaling at you, it is the lady rent officer taking your complaint. Does she want further details? “Oh no—I was just asking if you could show me pictures of the apartment and give me the landlord’s number. I am searching for an apartment, myself.” “Huh?!”

On Hope

The Ministry of Works and Housing, in its bid to ensure the housing sector works more efficiently, has in the works a National Housing Authority to “serve as a regulator [in charge of the planning, development, and the management of housing development initiatives in the country]”. This Authority is to give full effect to the National Housing & Mortgage Fund instituted by the Ministry, all in the bid of providing access to housing to low-to-middle income earners.

As the Ministry does this, its existing agency, the Rent Control Department, is set to undergo a digital transformation. To “ensure efficient service delivery to Ghanaians,” the Department is finally jumping on the propitious Information Technology wagon. Maybe—just maybe—no longer is the Ghanaian to navigate unnecessary bureaucracies, deal with begruntled civil servants (civil servants who themselves want that apartment of which you have come to them complaining about), to get fair treatments from their landlords.

You see, the problem with liking too much reading is it makes one pretty gullible—at initial stages, at least. Because one reads words like mathematical equations, I guess. One plus one is two—never three, but two. So, these policies tend to have a matter-of-fact effect in the mind of the reader.

A housing fund set up to provide public housings to ease the nation’s housing burden, and an Authority set up to regulate said activity of providing housing to the populace in need of it (low-to-middle income earners), that is bound to succeed, is it not? It is like 1 + 1 guaranteed to result in 2, is it not? It solves this whole problem that I, the writer; you, the reader, have spent our time on—one, writing, and the other, reading, does it not? It is with a reluctant pessimism, yet childlike optimism that I say, “Oh! how we wish.”

See you next week, where we religiously wish on…

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