Ghana is
a nation that offers an investor an unrivalled wealth of choice and potential,
and a property investor considering this emerging market will likely be
overwhelmed by the weight of opportunity for profit and gain.
But because the Ghanaian investment
real estate sector is in its absolute infancy there are many critical factors
that a property buyer must bear in mind before committing to purchase land
or real estate; this is a guide to the property buying process in Ghana
to assist foreign buyers.
First things first it’s important
to note that there are currently no restrictions on non-Ghanaians owning
land and property in Ghana and this situation is unlikely to change because
the government of Ghana is committed to promoting maximum inward foreign
direct investment and is working with a body called the
Ghana
Real Estate Developers Association to restructure the entire property
sector in the country.
It’s also worth noting that a foreign
property investor who makes purchases in Ghana can benefit from a series
of government incentives including taxation breaks, and that currently
upon the resale of property and the release of profits no taxation is levied
against capital gains and all profits can be transferred out of Ghana.
The main issue with the entire property
sector in Ghana is land registration however, and it is critical to take
a moment to understand the fundamental problems Ghana is facing at the
moment with respect to this.
According to a report written by
Oxfam
less than 2% of all land in West Africa is correctly registered.
This
means that it is almost impossible
to legally determine whether a vendor has the right to sell his land or
property - which naturally presents a property buyer with something of
a headache. Because resolving this fundamental issue is critical
to the development of a competitive real estate market in Ghana the government
has started to implement a compulsory Land Title Registration scheme throughout
the country.
The scheme has already begun around
the capital city of Accra and it will be rolled out in stages across the
country and it will force the correct registration of all parcels of land.
It will also seek to satisfy any current disputes over various parcels
of land so that when the scheme is completed there will be a central record
of land registration that can easily be searched. This will enable
a property buyer to register as the new legal owner of land or real estate
and avoid any potential claims against that property.
As you can imagine the implementation
of such a scheme is a massive undertaking and it will take many years to
complete - therefore there are certain ways a property investor must protect
his legal interests when buying real estate in Ghana today.
This guide to the property buying
process in Ghana combines the purchasing guidelines as issued by the Ghana
Real Estate Developers Association (GREDA) as well as our own advice.
GREDA list the four most critical stages of the property buying process
under the acronym ‘SAFE’ - namely Search, Advice,
Follow
up and Elicit and the whole process works as follows: -
Firstly an investor needs to employ
the services of an established and reputable real estate agent and a solicitor
who specializes in property. Without these two critical support elements
in place a property investor in Ghana will struggle to make progress and
may in fact fail to purchase anything legally.
The real estate agent will find land
and property that match the property buyer’s investment objectives and
the lawyer will help with the whole search process. In terms of the
searches that have to be carried out on any parcel of land or piece of
property that a buyer is considering making an offer on, they must include:
-
1) Searching for proof of the vendor’s
legal ownership of the property at the nearest Lands Commission Office.
2) Doing a technical search at the
Town and Country Planning and Geological Survey Department to find out
about any proposals to develop on or near the land and also to find out
about the geological format of the land with respect to issues like earthquakes,
flooding etc.
3) Conducting what are known as ‘social
searches’ on the credibility of the vendor’s claims that he owns the land
being sold. These take the form of speaking to neighbours and locals
about the vendor and his claim to own the property.
Once these searches have been conducted,
if their findings are satisfactory an offer to purchase can be made.
If any element of doubt arises from the searches the property investor
would be wise to walk away.
Either way a buyer should take the
advice of the lawyer, experts at the Town and Country Planning and Geological
Survey Department as well as the real estate agent before deciding whether
to proceed or not. These experts in their field all have local knowledge
of the Ghana property market and will likely give decent advice about whether
a particular parcel of land or property is worth pursuing.
Follow up means that the buyer should
consider conducting his own due diligence on the property he is interested
in and double checking the findings of his solicitor. While one often
operates with a great degree of trust in real estate transactions in many
countries in the world, it is not usual to blindly trust lawyers and estate
agents in Ghana.
Elicit as much information about
the vendor, the land and property from as many local sources as you can
because currently this is the only way you can be sure that you are about
to legally acquire the real estate you’re interested in.
One way to ease the stress is to
use a reputable and well established real estate agency and lawyer who
trade on their reputation and in whose best interests it is to make their
customers are happy.
Once an investor is committed to
a parcel of land or a piece of property
in Ghana the estate agent will usually enter into negotiations with
the vendor to reach an agreeable asking price. Once a price has been
agreed upon the property investor’s lawyer will prepare the appropriate
instrument of transfer - whether that is a Deed of Conveyance, Deed of
Lease, Deed of Sub-lease or Deed of Assignment. The appropriate deed
will be signed by all parties involved in the transaction and then registered
with the Lands Commission Secretariat.
Once the execution of transfer is
complete the property has to be paid for and for anyone requiring finance
there are at least two local banking institutions in Ghana who offer finance
for property purchase. Both HFC and Standard Chartered Bank have
a range of mortgages for resident and non-resident Ghanaians as well as
expatriate purchasers, although an investor might like to secure funds
outside of the country as interest rates tend to be quite high in Ghana.
And finally, once the property has
been paid for the title will be registered in the name of the buyer by
the Lands Commission Secretariat and all statutory fees will need to be
paid.
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Rhiannon Williamson
writes about living abroad and investing in international real estate.
She also maintains www.shelteroffshore.com
- Shelter Offshore Investment & Real Estate which is an online resource
for expatriates, international investors and anyone planning a new life
abroad. |
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