Did you know that due diligence is an essential step in Land Acquisition?
The principle of “buyer beware” (caveat emptor) is essential in land transactions, fraudulent activities are prevalent in this sector. As such, it is advisable to exercise caution.
If the deal looks too good to be true, it probably is.
Land-related transactions in Ghana are regulated by the Lands Act 2020, (“Act 1036). Verifying the identity and title of the Vendor is crucial before purchasing or leasing the land. A Buyer’s decision to lease or purchase a property should be based on the outcome of thorough searches and inquiries.
Here are some inquiries and searches required to be conducted by a prospective Buyer:
- Verify the identity of the Vendor
To verify the Vendor’s identity, ask for a state-issued ID, whereas for Companies, run a search with the Registrar of Companies (ORC) and check with neighbors at the property.
- The Vendor’s duty to prove title
For registered lands, the Vendor must show good title by providing a land certificate with a site plan from the Lands Commission. For unregistered lands, an abstract of title is to be produced.
- Evaluate documents of ownership
The Buyer must ensure that the documents are consistent with the description of the land.
- Conduct a search at the Lands Commission, Town and Country, Collateral Registry, etc
Act 1036 requires a Buyer to conduct a search to ascertain the Vendor’s title or if there is any charge on the property.
- Field Visit:
It is important to take practical steps by visiting the site. During site visits it is also important to speak with neigbours and occupants of surrounding lands to ascertain the ownership of the subject matter land.
- Going into Possession
A Buyer can demonstrate possession by constructing a structure, building a wall, or putting heaps of sand and stones.
So next time when you decide to purchase or lease a land, Buyer just beware.