Transparency
“Sunlight is the best disinfectant.” – Louis Brandeis
Transparency includes openness, integrity, and accountability when it comes to property rights and markets. Without clear information regarding the participants and terms of a transaction, corruption goes undetected and perpetuates.
Corruption is the abuse of entrusted power for private gain. It hurts everyone whose life, livelihood, or dignity depends on the integrity of people in positions of authority. Those with less power are particularly disadvantaged in corrupt systems, which typically reinforce discrimination against women and minorities.
Accurate and transparent reporting of property transactions is central to overall market transparency, stability, and fairness. A well-developed and transparent market system includes strong supporting institutions and highly trained and ethical property professionals that contribute to equitable access to information and opportunity, effective financial intermediation, and deep and broad access to capital and financial services.
MEASURE
Research the perceptions of transparency in your country.
Consult the country Scorecards that have been developed or use the Effective Governance and Financial Transparency sections of the Scorecard methodology to develop or update that part of the Scorecard for your country.
Transparency International – Corruption Perceptions Index
Jones Lang LaSalle – Global Real Estate Transparency Index
Country and Local Sources
Each country has resources for transparency and corruption issues such as:
- Ghana Integrity Initiative – Land & Corruption in Africa
- Philippine Real Property Valuation & Assessment Reform Bill
Compile the resources for transparency and corruption detection in your city, country, and region.
Survey Questions
Discover and map out the various sources for property data in your city, both formal and informal:
- What are the major sources for property data by buyers and renters in your market?
- What organizations exist to support the development of ethical and highly trained property professionals?
Identify key issues in data availability property professional development and choose one or two issues to address with SMART goals:
- Specific – choose goals that are simple, significant, and likely to make a difference.
- Measurable – set a metric, e.g., develop a real estate professionals’ organization.
- Achievable – keep the goals within the realm of your organization and influence.
- Resourced – what time and money will be dedicated to achieving the goal?
- Time Defined – set a time for the goal to be achieved.
COLLABORATE
Data is the new gold. Artificial Intelligence (AI) and Property Technology (Prop Tech) are all the rage and promise to solve every intractable problem. As demonstrated with the Scorecard, in many markets real estate information is fragmented and opaque because incentives remain in place to deliberately report false information to avoid excessive taxes and fees. While progress has been made, most transactions remain paper based.
Property data remains in silos with actual sales data held closely by firms, taxing based on outdated government models and formulas due to the lack of data and failure to update polices and systems, and credit information not collected or severely restricted because many citizens are unbanked or underbanked.
International Resource
Open Standards for Commercial Real Estate:
Identify key stakeholders including potential partners and supporting organizations that will also benefit from more transparent and ethical property markets.
- Work with government, real estate, and finance organizations to develop shared and measurable goals to remove the incentives for businesses to remain informal or to underreport revenue.
- Confirm the key issues and improvement goals.
- Develop an ongoing Stakeholder Engagement Plan, e.g., Stakeholder will meet twice a year to review progress and set new goals and targets.
Ghana Case Study
In countries that lack transparency in real estate markets, where real estate practitioners are not licensed by the government and transaction data is not shared publicly, anyone – qualified or not – can act as a real estate agent. As markets develop, the attraction of fast money can lead to many innocent people losing what little money they have in real estate schemes by unethical players. This was the case in Ghana until the passage and implementation of the Real Estate Agency Act.
The Act established the regulation of the real estate sector, including brokers and agents, and will greatly affect ordinary citizens and all players in the real estate market as transparency is brought to the market over time.
- A Licensing Regime including reasons for suspension or revocation of a license
- Register of Licensed Professional
- Register of real estate transactions
- Standard forms and payment requirements, including no cash payments and required escrow accounts for clients
- Required Transaction Certificates for registering transfers by the Lands Commission
- Agent reporting and accounting requirements
- Clear outlines of punishments for operating outside the law
Ghana Real Estate Professionals Association (GREPA) was key in the development of the Act and bringing transparency to the market.
ADVOCATE
With key stakeholders, partners and supporting organizations:
- Encourage the development of open and shared property data portals.
- Publish papers, articles and blogs on the importance of participating in formal markets and the costs of informality and corruption.
- Establish an annual awards program to highlight success stories of SMEs, public officials and other partners who support the continued development and improvement of SMEs.