Ghana Issues Only 50 Years Leasehold for Property Foreigners Buy

Bennett Oghifo

Nigerians, and other foreigners, who are planning to acquire property in Ghana should know they are entitled to a leasehold of 50 years only, but it can be renewed if the holder desires.

Individuals and businesses can buy property in Ghana. If their interest is land purchase, then they may choose from the five types of land available. They can also buy a building or buildings and in all cases prepare their 50 years lease document in collaboration with their vendor and this will be taken to the Ghana Lands Commission for authentication and processing. The only document required during property purchase is the identity of the Nigerian or non-Ghanaian, for instance, a passport. Businesses with over 40 per cent non-Ghanaian ownership-structure are considered foreign. Officials of this Commission said it takes 140 days to complete documentation. They are working on reducing the time to process leasehold to 30 working days, but now it is between 90 days and 140 days.

They advised that prospective owners take possession immediately. They will also need to hire a lawyer to guide them through all the processes from land identification to documentation. Ghana’s Estate Surveyors have not been empowered by law to do this job.

This information was provided at the Ghana-Nigeria Business Council’s first webinar on ‘Understanding Leasing and Purchasing Land in Ghana, held recently. The webinar was called because of a growing need to make people understand the processes of purchasing and leasing land in Ghana, which is considered a key challenge for most people, according to the Executive Secretary of the Council, Nadia Takyiwaa-Mensah in her introduction.

Nadia Takyiwaa-Mensah stated that the Council was established to support people and businesses from Nigeria that intend to invest in Ghana and to support Ghanaian businesses that are interested in investing in Nigeria.

The webinar featured two people from Ghana’s Lands Commission, Timothy Anyiodoho, and Ruth Mawunyo Asuo, both Surveyors, and a special guest, Ekua Eguakun, a Lawyer.

There are five main ownership regimes of land in Ghana- State Lands; Vested Lands; Stool/Skin Lands; Family Lands and Private Lands. Understanding this is a major challenge to many investors from Nigeria and to even Ghanaians, said Anyiodoho.

The State Lands are acquired by State and “all interests are extinguished, this type of land can only be granted from the State. The danger with lands like these is that sometimes when government acquires large tract, it is not in absolute control of them so people go and encroach or the people we call the expropriated owners (original owners) go back to the same land and may mislead an investor and tell him that the land is State land but government has given it back to us and therefore we have the authority to grant it,” he said, adding it is misleading and that it is only the state that can grant it.

Vested Land has split ownership. “It is pretty much like the State Land, but only that the proceed goes to the Stool from which the land was acquired, after the necessary deductions are made. It has similar characteristics of the State Land,” in terms of management.

There are Stool/Skin Lands. Skin Lands are found in Northern Ghana and Stool Lands are in lower north to south of the country. They are managed by Stools. “The Stools manage them, as a fiduciary duty, on behalf of the larger communities, and in collaboration with the Principal Eldest. If somebody is supposed to approach a Stool for land, he should be wary and understand that the Stool or Chief will not be acting in his personal capacity.” Ensure his Principal Eldest is present during land negotiations.

The fourth category is the Family Lands that are controlled by family heads and they manage the land in conjunction with Principal Members of the family”, who must be present when looking at the property.

Then there is Private Lands/Property that were acquired by individuals over the years and have become self-acquired property. The only caution here is to ensure it is free of encumbrances.

To identify which land the prospective buyer is interested in, he or she would be presented a site plan, defining the boundaries and “you do a search at the Lands Commission, which is decentralised in formerly 10 Regions but now 16 Regions in Ghana. They should be able to inform you whether the land falls within State Land or any of the others. But there is a small caveat somewhere because the Commission’s record is not sacrosanct because it is limited to the extent of information in its records. There may be areas where no Stool or Skin has gone through the process of registration.

Ghana has six categories of land titles- Allodial, Common Law Freehold, Customary Freehold, Usufructuary Interest, Leasehold Interest, and Customary Tenancy.

The Constitution prohibits foreigners from owning land in Ghana and limits them to leaseholds of no more than fifty years.

According to Ekua Eguakun, a Lawyer and the special guest at the webinar, whoever wants to purchase land or building in Ghana should do due diligence to strike out the possibility of encountering a situation where the vendor has multiple sales agreements with several people.

Ghana’s new Land Act, 2020 (Act 1036) (“the Land Act”) consolidates the existing laws on land and land administration into a single Act; some of these features which are necessary to understand the growing land laws in Ghana include:

The Act holds that chiefs, tendanas, clan heads, family heads or any authority in charge of management of stool or skin, clan or family lands are accountable as fiduciaries. As fiduciaries, these “managers” must be transparent, open, fair, and impartial in making decisions that affect the land(s) they manage. They are also subject to disciplinary sanctions if they fail to comply with their fiduciary duties.

The Act creates a Customary Land Secretariat. It imposes an obligation on stools, skins, clans or families to establish a Customary Land Secretariat for the management of their respective lands. The Land Act sets out guiding provisions that detail the structure, functions, staffing, powers and source of funds of these Customary Land Secretariats. A notable function is the duty to keep and maintain accurate and current records of land transactions within their respective areas of operation. The Land Act, however, does not provide any punitive measures for failure to adhere to this provision.

There are now three systems of recording and registering land and interests in land. These are: (1) Recording of customary interests and rights by Customary Land Secretariats; (2) Registration of instruments relating to land; and (3) Registration of title, interests and rights in land.

The Act has introduced electronic conveyancing. Land or interests in land can now be transferred by an electronic information system. This system will only be available to qualified legal practitioners whose access will be determined by the Lands Commission after an assessment as to whether they possess the equipment and facilities to provide the conveyancing services.

Parties are required to exhaust all procedures under the Alternative Dispute Resolution Act, 2010 (“Act 798”) before any action involving land in a registration district can be commenced in Court. This mechanism has replaced the Land Title Adjudication Committee under the repealed Land Title Registration Act, 1986 (P.N.D.C.L 152).

Within 10 days after the last day of each month, the Land Registrars are required to compile a list of all registered interests and rights from the previous month and submit it to the Director of the Land Registration Division. Within 14 days of receipt, the Director of the Land Registration Division is to compile a general list which will be posted on the Lands Commission’s website.

The Land Act eliminates grantees and subscribing witnesses from the list of persons required to depose to an oath of proof in an instrument.

The implementation of these progressive features is expected to enhance the administrative framework of land registration, security, and governance in Ghana.