A proposed framework would register agents and developers, cap buyer deposits and ring-fence client money in trust accounts. Here is what it would change.
The Real Estate Bill, 2024 (draft of 11th November 2024) proposes a dedicated framework for real estate agents, salespersons and developers. The Department of Housing Development and Estate Management in the Ministry of Lands, Housing and Urban Development would administer the Act.
The Bill is not law. Expect changes before enactment.
Scope
Section 3 applies the Bill to all persons in real estate business. Section 8 defines this as offering agency services or undertaking development. Excluded are persons acting under a power of attorney, advocates giving legal advice, administrators, executors, receivers and trustees, liquidators, owners making a one-off sale, and salaried employees of financial institutions.
Agents and salespersons
You must appear on the Register of Real Estate Agents before you practise. Section 10 requires a degree in real estate agency or an equivalent qualification, membership of a professional body and a Financial Intelligence Authority certificate. Applicants pass professional examinations unless the Commissioner grants an exemption.
Practising agents hold an annual certificate of practice, which expires on 31st December. Renewal is due by 31st October and requires continuing professional development. Firms must be registered partnerships. Foreign agents obtain temporary registration for up to one year. Refusals carry a right of appeal to the High Court within twenty-one days.
The Minister will issue a Code of Ethics, and a Disciplinary Committee chaired by the Commissioner will hear complaints of misconduct.
Developers
Section 24 bars a developer from advertising, marketing or selling any plot, apartment or building before the project is registered. Applications need permits, proof of funds, title, a feasibility study, the proposed sales agreement and a statutory declaration on title and encumbrances.
Buyer protections
- Deposits: a developer must not take more than ten per cent of the price before signing and registering a written sale agreement.
- Advertising: no false or misleading statements. Advertisements must show the project registration number. Buyers receive compensation for loss and a full refund with interest on withdrawal.
- Title: transfer and possession within three months of the occupancy certificate.
- Changes: alterations to common areas and transfer of the project need consent from two-thirds of purchasers.
- Defects: free repair within thirty days for defects reported within five years of handover.
- Failure to deliver: refund with interest and compensation.
Trust accounts
Agents hold client money in a labelled trust account at an authorised Ugandan financial institution and deposit funds within two business days. Creditors and banks cannot reach this money. Agents issue receipts, file quarterly and bi-annual statements and obtain an annual audit. The Commissioner freezes accounts at risk of misappropriation. Unclaimed money goes to the Public Trustee after a sixty-day public notice.
Penalties at a glance
| Offence | Maximum fine | Prison |
|---|
| Agent practising without a certificate | 500 currency points (UGX 10,000,000) | Up to 2 years, or both |
| Salesperson in breach | 50 currency points (UGX 1,000,000) | Up to 6 months |
| Developer marketing or selling before registration | 10,000 currency points (UGX 200,000,000) | Up to 2 years, or both |
| Agent failing to audit trust accounts | 550 currency points (UGX 11,000,000) | Not stated |
Transition
Existing operators apply for registration or a licence within six months of commencement. Continued operation afterwards is an offence.
Next steps
- Agents: check qualifications against section 10 and separate trust accounts from operating accounts.
- Developers: prepare section 25 documents and review deposit practices.
- Buyers: verify the project registration number once the Register opens.
