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New Bill Proposes Penalties For Unlicensed, Fraudulent Real Estate Agents

The bill seeks to penalize unauthorized real estate agents

The West Budama North Member of Parliament, Richard Okoth Othieno has tabled the Real Estate Agents Bill 2020 in parliament, which seeks to criminalize authorized real estate agents. The bill generally seeks to regulate the sector, which is currently dominated by the unlicensed real estate agent.

The agents earn a commission from the sale of property such as houses and land.

Tabled before plenary on Thursday chaired by Deputy Speaker Jacob Oulanyah, the bill defines a Real Estate Agent as a licensed professional, who brings a buyer and a seller together and acts as a representative of one of the parties. It further describes a Real Estate Agent as a person who receives payment on behalf of a seller or buyer for a commission or percentage of the property’s sale.

It also defines Real Estate Business as any acts conducted in relation to the buying, selling, management or investment in real estate. The Bill proposes licensing of a person who carries out real estate business and proposes a fine not exceeding 10 million Shillings (500 currency points) or imprisonment for a period not exceeding 6 months or both for an unlicensed agent. The licenses are to be issued by a real estate committee established under the Ministry of Lands.


The Bill also proposes that a person who carries out business as a real estate agent without a license shall not be entitled to recover any commission, fee or reward for any work for, which a real estate agent’s license is required.  The agents will be required to apply for registration and issuance of license within 6 months after commencement of the Act.  

It prohibits the practice of a real estate agent unless there is a force in relation to his practice, an indemnity bond or policy of insurance entered into and approved by a Committee to guarantee that compensation shall be paid up to the required limit to a person suffering monetary or other property loss through dishonest person.  

Othieno proposes that agents should be barred from spending money (Trust Money) generated from properties they sell on behalf of their clients and that if convicted of such an act, these should be fined Shillings 20 million or imprisoned not exceeding three years or both. According to the Bill, an agent who receives trust money shall be required to issue a receipt to the client and keep the record, which will be filed to a Committee that shall be established by the Act.

The proposed Committee would be mandated to handle grievances such as fraud, recklessness, unscrupulous practices between agents and clients and if not resolved, complaints shall be sent to a Tribunal, which in the Bill can revoke licenses among other measures. The bill proposes that both the Committee and Tribunal be funded by the government through parliament appropriation.

Othieno says that if passed, the law will help streamline the real estate sector where many Ugandans are fleeced of money. The Deputy Speaker Jacob Oulanyah tasked the Physical Infrastructure Committee to handle the Bill with urgency. 

-URN

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