The positive investment sentiment towards Guyana’s Real Estate Market should be balanced with progressive regulatory steps on property acquisition, transfer and a system of accountability and transparency for operating in the Real Estate Market.
In Guyana, there is a myriad of legislation that speaks to how property is acquired or how ownership is transferred, how to get financing for your real property, types of real property, and the rules for commercialising your real property or for developing your property to suit the needs of potential tenants.
Nevertheless, our current approach to Real Estate and Real Estate Development and Management in Guyana results in significant exposure to Money Laundering and related crimes such as Real Estate Fraud.
There is no particular restriction on who can own, develop or manage property in Guyana. These are activities open to anyone with the required capital to fulfil the same. Foreigners and locals have about the same property ownership rights. Individuals and companies also have the same ownership rights. There is no restriction on the basis of nationality or national extraction as to who can form a company. While Foreign Direct Investment aids development in a country like Guyana, our unstructured Real Estate Legal Framework also leaves room for organised criminals to operate.
Quality in the Real Estate Industry is important as is seen in industries in other countries subject to strict rules. There are rules governing development such as the materials which should be used to build properties, who can be a developer and licensing of Real Estate Agents. In Guyana, anyone can apply to Facebook marketplace or place a classified advertisement in the newspaper and claim to be a Real Estate Agent and in many cases deliver poorly. Overpricing properties whether for sale or rent without consulting with a licensed valuator, showing properties that are in deplorable conditions and trying to sell properties without consulting on the proper documentation like title documents, all go against the ethics of the practice.
Using our Caribbean neighbours as examples, areas for improvement in our legal framework for Real Estate in Guyana are palpable. A useful model is Trinidad and Tobago’s Real Estate Agents Act which, as it recites, is,
"An Act to provide for the registration and regulation of real estate agents in order to promote transparency, accountability and integrity in the real estate profession, to protect and assist persons engaged in transactions with real estate agents and to assist in the detection and prevention of money laundering and terrorist financing, and other related matters."
Under this legislation, both developers and real estate agents need to be registered and licensed. Before a developer begins construction the Registrar General must be satisfied that he is fit to be a developer. Part of the registration process includes completing an AML/CFT/PT risk assessment questionnaire. There are penalties for failing to comply with this registration process.
Also, becoming a real estate agent under this legislation requires completion of a licensing process, without which no one is allowed to practice as a real estate agent.
The Act places a strong focus on removing criminal risk within the industry, especially that related to money laundering and related crimes. Persons with certain criminal backgrounds are automatically disqualified from practising as real estate agents. The registration process also requires the applicant to fill an AML/CFT/PT Risk Assessment form.
On the topic of quality assurance, not only are real estate agents in Trinidad governed by a written Code of Ethics but the screening process for developers also ensures the quality of buildings.
Agents are also required to follow a robust record-keeping and documentation programme, leaving little room for fraudulent activity.
It would also be recommended that real estate agents form themselves into an association through which social networks and the reputation of agents can be monitored. Such a self-organising and reinforcing mechanism will buttress legislation that will facilitate the overall development of the industry. This will become necessary as Guyana’s broader economic growth trajectory takes off.