Land litigation remains one of the major problems in Ghana. Lately, issues regarding land have been on the increase, and have made most of the headlines. There have been a lot of demolishing exercises carried out; land guards selling and reselling lands to people; flooding, and tidal waves invading lands in areas such as Glefe, a community near Dansoman, and all suburbs in Accra in the Greater Accra Region.
More often than not, buyers do less investigation to ascertain ownership of the land before purchasing. After thorough investigation, it comes into view that most lands sold out end up being a state acquired lands or for some original owners, but have been sold and re-sold to the poor victims by cunning chiefs and notorious land guards.
In a country like Ghana, land is a valuable asset – the reason being that they do not diminish or loose its value whichever the situation of the economy.
In planning to buy a land in Ghana, important steps must be taken to ascertain the ownership before even envisaging doing so.
Here are 6 practical steps to follow to avoid loosing your hard earned money:
The Ghana Land situation – Please visit the site. It is essential that when you want to purchase a land, you first visit the plot and look out for the land and where it is situated. Find out whether it is near a refuse dump site or it is one itself. You must also check the surroundings to see if it’s a desirable area you would want live, and also get to know if it is a water logged area. Usually, most lands in such areas are left likely to belong to government, purposefully left out for future projects.
Ghana Land Social Amenities – A land would be better to acquire or buy if it has the major necessary social amenities, such as – the land being connected to a good road network, electricity from the national grid, pipe-borne or portable water, and sometimes a market. All these are necessities of human life that we cannot live without. Therefore, it is prudent that you have all these facilities around or in the area of the land you want to purchase. Often, the lands in these areas, where there are no facilities, are not demarcated and therefore may not be for sale.
Ghana Land Chiefs and traditional leaders – In Ghana, most land disputes have been said to be caused by some chiefs and traditional leaders, as well as individuals who have self-imposed the name ‘land guards’ on themselves. Some of these chiefs and traditional rulers are in the habit of selling and re-selling lands to people, with mostly the aim of making ‘bad’ money. Many people have been victimised by their behaviours. They have cunning ways of doing this: for instance, if someone buys the land at $13,000, or GHC 31,200 at the time of writing and pays part of the money, or even pays all, but has not put the land to any use, these traditional authorities can resell the same land to a different buyer who can afford to pay much more money to the tune of $20,000 (GHC48,000), something like a ‘money show power’ system. One therefore, must check and be very sure that the land he wants to buy has not already been sold out. Don’t get scammed.
Ghana Lands Commission – The buyer would also have to check with the lands commission to ascertain whether the land in question has already been registered in another buyer’s name or has already been sold out. Sometimes, the delay in the registration process on the behalf of the land commission causes the multiple sales of a land, and it also gives some greedy chiefs and land guards the opportunity to sell that same parcel of land to other unsuspecting people. In the event the land title has already been registered, refrain from buying it.
Follow-Ups – After you, the prospective buyer have done your due diligence and checks to ensure that the land does not already belong to someone else, you must consult the town and country planning agency in the area, to be informed about the land. For example, people who want to buy lands in Tema – and its nearby towns must consult the Tema Development Corporation (TDC). It helps the buyer to know if the land has been earmarked for a market place or it has been designated for a road construction.
The buyer would also know if the land is a government acquired property. This would save the buyer from future demolition after he had had to spend thousands of dollars to put up a house only for it to be demolished by an original owner or the government. Such demolitions do not come with any compensation, and this could be the greatest lost.
Ghana Court Endorsement of Land – Some lands could have injunction placed on them by a court, in the situation whereby its ownership is being claimed by two or more people. Such lands are not supposed to be bought by a new buyer if its proprietorship is being challenged in court. Therefore, it is advisable that you avoid such lands even if one of the alleged owners, a land guard or even a chief wants to sell it at a cheaper price to you. Beware that until the final decision by the court, that land remains untouched.
Purchasing a land and putting it to a full use, for it to be taken back from you could be very traumatic. Consequently, every individual must ensure that, the above steps are taken in their search to buy a land in Ghana and knowing its ownership. This is very important and will save you from unnecessary headache and financial lost.
Owning a property is absolutely one of the greatest investments that one could ever think of making in life. It is indeed a great feat, which not everyone can attain, therefore, individuals who have made efforts to buy or build their own houses are always proud of such achievements; and Ghanaians are no exception.
The people of Ghana pride in property ownership, and would go to any length to acquire at least one. Building a house requires a great deal of money. One needs a whooping sum of not less than $100,000 (GHC 350,000 at the time of writing) to embark on such a process. Such an amount is not easy to come by, and it is proven even harder for the average Ghanaians who do not earn much income. Working on an uncompleted house requires extra funds to put finishing touches to it. These situations make mortgages a much sought after in Ghana.
There are many financial institutions which render mortgage services to people interested in buying, building or completing a house.
Prior to applying for a mortgage, it is important to be well informed about the interest rates these financial institutions charge respectively. Furthermore, it is equally essential to apply for the appropriate loan, as there are different types of mortgages for different uses, and all these come with various interest rates ranging from up to 35%-40% in some cases. (:
Different types of mortgages
Should you be interested in building your own dream house, the ‘self-Build Mortgage’ (sBM) is the loan to apply for. For most of the self-build mortgages, the money for each stage is usually only paid out once it has been completed and a valuator has visited the site.But, some self-build mortgages release the amount of money required for each stage of the building at the beginning rather than the end of the stage. This is especially useful if you do not have the cash up front to pay your builders or to buy materials.
Self-Build Mortgages tend to have higher rates than on standard mortgages, and the payment spread within 10-20years.
The ‘Home Purchase Mortgage’ (HPM) has been designed purposely for people who intend buying a house. The borrower is made to pay a minimum of 15% deposit, and the loan payment spread between 15-20 years.
In case you are looking at completing your uncompleted building, you need the ‘Home Completion Mortgage (HCM). This type of loan has been designed for people who already started the building process but stopped along the way due to financial problems. The uncompleted house could have initially been funded by the owner’s own money, his employer, bank or another mortgage company.Loans for this purpose normally do not exceed up to 50% of the total construction cost of the property, and the interest rates vary from bank to bank. The property must have reached the lintel level at least. Borrowers of this type of mortgage have a maximum of 15 years to finish payment. Not everyone can apply for a loan. To qualify for a mortgage, you must first ensure that you are not below18 years (some financial institutions have 21 years as minimum) and secondly, not more than 55 years old. There are other issues that need to be considered as well, should you decide to build, buy or complete an uncompleted house with a mortgage.
And to build, buy or complete an uncompleted house with a mortgage, one must:
Mortgage brokers – There is the need for the person to contact a mortgage broker to help them get a better financial institution or bank with the best interest rate. The borrower can also decide to do his own background checks to pick a suitable mortgage company without necessarily consulting the broker. Therefore, conferring with two or three mortgage companies would be ideal for the borrower to ascertain which company is better and has the best rates.
Intended purpose – The mortgage loan which has been acquired for the purpose of building, buying, or completing an uncompleted building must be used for the exact purpose. Some people often use the loans for something else other than the intended purpose, and in the end, they lose. Not using an acquired mortgage for the main purpose can bring problems to the borrower. It could lead to a breach of contract between him and his bankers if they found out that he was using the mortgage for something else than what both parties knew of. In this case, the borrower could even be accused of deception.
Loyalty – There is the need for the borrower to be loyal in his dealings with the mortgage company. Being loyal in this sense includes the importance of the borrower to pay his debt as agreed by both parties (himself and the bankers). The borrower must have a sturdy income, to be assured of his ability to pay his deductions without any unnecessary interruptions. He should be able to provide adequate security for the loan. Paying your debts duly will also help you avoid foreclosure, where the banker will have your property owner reverted to themselves because you are unable to pay back your debts within the given time frame.
Other source of income – To be on the safer side, the borrower must look for other sources of income. This will help him be in good terms with his bankers even if he loses his job someday. One would still be able to pay back the loan when he has alternate sources of income without being harassed by his bankers when the unfortunate happen.
Despite the relief that acquiring a mortgage for owning a house could bring, the high interest rates charged by the mortgage companies in Ghana is still a bother to Ghanaians, and especially to the average Ghanaians.
More often than not, borrowers end up paying as much as 400% of the original amount they borrowed and this takes a toll on them as they are faced with over-burdened financial situations. For this reason, not everyone in Ghana can afford to own a house. In the meanwhile, those who cannot afford to build or buy their own houses are compelled to live in rented apartments and other makeshift buildings which have their own consequences.
The government of Ghana, and the bank of Ghana must as a matter of urgency, intervene on behalf of the people, by putting measures in place to regulate the interest rates to ensure that no one is exploited, in his quest to own a house.
Blocks and Bricks are both building materials, which can be used for the same purposes. However, the two have varied differences and similarities in terms of price, durability, choices, convenience, and their advantages over each other. In Ghana, the most common building material used is cement, which is employed right from the start to the finish of a construction work; i.e., in producing blocks.
The price of a single block in Ghana now costs between Gh¢2.00 and Gh¢2.50p (73 – 91UScents), while the price of a brick is between 50 pesewas and 80 pesewas (18 – 29 UScents). Even so, in majority, if not all bidding documents, blocks remain the specified building material.
Blocks are Primary Building Material…Why That?
Amount of Blocks or Bricks Needed – The block sizes used are mainly the 6-inches for construction at the foundation level and the 5-inches for the building itself, while the brick; on the other hand; being smaller in size, a number of 6 pieces would be needed to make 1 single block. This sums up to the fact that more bricks would be required than blocks in building.Taking for instance, a case of building a standard 14 by 14 feet single room in Ghana; approximately, a number of 150 bags of cement, which is equivalent to 4,500 good quality blocks are needed as against a total of 27,000 bricks for the same kind of building. Moreover, one must also not forget that an amount of sand would be needed to be mixed with the cement in producing the blocks.
Cost of Fuel/Cement – Most people believe that it may be expensive putting up a brick building because of the initial cost to be incurred as compared with the block building.In the case of brick, more fuel is needed for the entire production, which involves mixing, drying, firing and fabrication, including hand moulding. Consequently, more fuel would be needed for this kind of work, and this calls for more money, having its own repercussions on the pocket of the builder with respect to the rampant increase of fuel prices in Ghana lately. On April 01, 2014, fuel price saw an increase by 7%, leading to the automatic hikes in all petroleum products and other commodities. This is the third time of increase since the beginning of the year, when we are only in the first quarter.The block on the other hand, does not require much more input to be produced as in the case of the bricks. It involves moulding and drying. The challenge with producing blocks has got to do with the unstable prices of cement, which shot up from ¢18.00-20.00 ($6.5-$7) by the close of last year to Gh¢21.00- Gh¢25.00 ($7.67- $9), as of now.
Labour Intensity – It is obvious that the labour force in brick building is greater than the labour force needed in block building. More workers would be needed in the brick case to undertake the various production processes of mixing, drying, firing and moulding; whereas only a few of the workers would be needed in the block building. For instance, if 8 workers are needed in the brick production, with 2 of them taking up one of the production processes, equally, only 2 workers will be needed in the block production – one worker for the mixing and moulding, and the other for the drying. More workers simply mean more cash to pay them.
Building Process – Obviously, the building process involved in both block and brick would be different, with the other requiring more people on board and using more time than the other. Bricks for instance, require more skills right from the production to the building, not to mention that they are smaller in size and also heavier, making it more difficult to be installed by few workers. This can cause a prolonged time of completion, meanwhile prices of goods and services would be going up. For the block, only a few people can handle the entire building process.
Expensive Machines – The machines used in bricks production is undoubtedly more expensive than the machine used in producing blocks. Therefore, it is easy to raise money in acquiring a block-producing machine than that of the brick-producing.
The high cost involved here has accounted for the non-usage of the bricks and scarcity of brick buildings in Ghana; however, the maintenance costs are as low. The bricks building do not need plastering and painting as would be needed in the block building. Also, when building in a water-logged area or on a wet land, bricks are the best choice the reason being that they are stronger and can absorb the water without collapsing, unlike the block building.
Despite these conveniences and advantages, cement block remains builders’ first choice. This has brought about monopoly in building materials, making cement expensive with a bag of cement being now sold at Gh¢21.00 and in some areas of Accra at Gh¢25.00 ($7.67- $9).
Inasmuch as a heavy budget is needed in putting up a brick or block building, their benefits are immense. Both building materials are strong, fire-resistant and insect-proof; raising them above other building materials such as the wood.
All the same, in order to solve Ghana’s recurrent housing deficit, it is imperative that the government puts in more effort to build the capacity of the brick industry and review the construction policies, emphasizing on the use of more local materials such as the clay. Stakeholders must also endeavour to use local building materials in their construction works for everlasting building resistance.
Land is a valuable asset, which appreciates or increases in term of price, as time goes on. It is therefore very important that, when you are able to acquire a land, it is registered appropriately and accordingly with the land agencies involved to avoid future land disputes and forfeiture.
In Ghana, recently, acquisition of land has become tiresome and very expensive, especially in elite areas of Accra. This gives more reason why it is vital that the land is registered as this would also give the owner full rights over the land and in its development as well as save the owner from litigation.
7 Steps to Register Your Land in Ghana
Background Checks – Carrying out thorough checks about the land is important, as this will enable the future land owner gets to know if the land is available to be acquired. In this process, the prospective land owner can also consider the services of a land lawyer to research the land and prove its availability; such as if it has already been sold out. Checks must also be done with other government land overseers, for example; the Tema Development Corporation (TDC), to ascertain if the land had been earmarked for any developmental projects. One would also be told if the land is not suitable, say if it is a water-logged area, and therefore, not advisable to be purchased.
Acquisition and Negotiation – After the availability and suitability of the land has been established, the interested buyer or lessee negotiates with the actual owner of the land for sales. It is important to be reminded that the interested buyer must deal with the rightful owner of the land because the use of middlemen is not advisable. An agreement is reached and documents made to its effect.
Document Endorsement – Three copies of the agreement documents would be needed for endorsement by a land lawyer, who will have to sign the back of each of the copies with his practising stamp duly fixed. Each copy of the documents must have a site plan attached, together with two extra copies of site plans, all making 5 documents. The back of the site plan would also be needed to be endorsed by the owner and the buyer of the land; after which they (the site plans) are to be certified by the stamps of a licensed surveyor and the regional surveyor with accurate date.
Witnesses – These are people who would testify to the proceedings so that in future whenever there is anycase of challenge about ownership of the land, they would be called upon for assistance. It is therefore required that at least, 2 qualified persons from both parties – the seller and buyer sides must sign as witnesses. The two witnesses signing on behalf of the buyer or lessee must do so with their full names, addresses and original signatures.
Land Commission – After the endorsement of the documents, it is then sent to the land commission, together with processing feesfor of processing and registration of the land to begin. After the processing is completed, the documents are released to the Land Valuation Board for stamping and certifying.
Internal Revenue Authority (IRS) – The IRS sees to the taxes associated with the registration process. From the land valuation board, the processed documents are then released to the IRS for tax clearing of the land to be made. When this is complete, the applicant, or buyer is given a tax clearance certificate. The documents are from here, taken back to the land commission for final registration at the deeds registry.
Original Copy – From the deeds registry, the buyer is given an original copy of the land title document.
It is advisable that persons who seek to register their lands go through the above processes to have their lands registered accurately and the documents original and recognized. Failure to do this, and employing unauthorized means to go about the registration process or use of “short cut” as it is popularly termed in Ghana, could lead to serious land issues in the future. The land title document must also be kept in a secured place to prevent loss or damage.