What you need to know before you buy a real property …The property due diligence checklist


For many people, acquisition of a real property will be the biggest investment they will make in their lifetime. Of course, the basic needs of life are said to be food, water, shelter, sleep, oxygen, and clothing. To humans, real property is usually seen as the utmost shelter.

Real property refers to land and everything affixed to it. In legal terms, real property includes all rights, interests, controls, and responsibilities of a parcel of land and its attachment.

Real property or Land does not only refer to the physical parcel but also the intangible rights to the use, enjoyment, controls, and disposition of the land and all that is affixed to it. These rights and interest may come with some responsibilities, restrictions, conditions and many more. It is therefore very essential that anyone who intends to purchase real property must understand from inception, what s/he wants to purchase/ be agreeing to purchase/ have purchased or should purchase.

For many people, buying real property is a headache especially in Ghana where there exist several land regimes. My subsequent articles shall discuss in detail the various land regimes that exist in Ghana

In this article, you will get to know the following; The various rights and interest in land and their associated restrictions and the things to look out for when buying a real property; What I call “The property due diligence checklist”.

Rights and Interest in Real Property

  1. Allodial Title: 

This is the ultimate interest held in land. In Ghana, allodial title is held by stools or skins, families and clans for and on behalf of the subjects, family members or clan members respectively depending on the cultures and jurisdiction in which the land is situate. 

Allodial title confers on the one who the title is vested the absolute right to use, make grants, levy rents and control subject to the laws of Ghana and the customary laws in the jurisdiction. 

An allodial title, however, cannot be transferred by the person in whom the title is vested to anybody by way of will. The property is and shall always remain a property for the stool (skin), family and clan managed by the chief, family head, clan head or any other recognized leaders for and on behalf of their people. 

NB: Don’t be deceived! Nobody has allodial title to a personal property. 

  1. Freehold Interest: 

This is also an infinite interest in land. In Ghana, a freehold interest may be; 

  1. Customary Freehold which is an interest held in land by individuals or groups who are members or subjects of larger groups such as stool(skin), family or clans, who have the allodial title to the land. i.e. Ownership is by one’s membership to the allodial title holder group.

The customary freeholder has the right of beneficial occupation and can transfer his interest to his successors or may dispose of his interest subject to the laws of Ghana.

  1. Common Law Freehold is also an indefinite interest held in land just like the customary freehold. The only distinction is that, it can be acquired by both strangers and members of the stool, family or clan through an express grant. It is important to note that stranger in this context refers to a Ghanaian who is not a member of the stool, family or clan that holds the allodial title to the land.

In the 1992 Constitution of the Republic of Ghana, however, the creation of new freehold interest in stool lands is barred under Article 267(5).

Also, under Article 266(1) – (3), a freehold interest cannot be created for a non-Ghanaian in Ghana. Any such agreement that seeks to create a freehold interest to for non-Ghanaian is void. Where the agreement was made on or before 22nd August 1969, the interest shall be deemed to be a leasehold 50-year lease at a peppercorn rent.

  1. Leasehold Interest/ Lease

 The leasehold interest is a terminable interest held in a parcel of land by an individual or a group of people or a body corporate. It has a start date and an end date duly specified at the beginning of the term. It can be created by an allodial title holder, a customary freeholder, a common law freeholder. 

A leaseholder may also create a leasehold interest out of his interest provided that the said leasehold has an end date earlier than the Leaseholder’s interest. 

This is mainly referred to as a Sublease. 

A leasehold interest may also be transferred by way of an assignment to another usually subject to the terms and conditions stipulated in the lease agreements such as the express consent of the Lessor(s) (the grantor of the leasehold interest). 

A leasehold interest may be any period of 1 year and above. In Ghana, the creation of leasehold interest in stool land is restricted to maximum of 99 years.

  1. Customary Tenancies 

These are lesser interests in land. It is common in farming communities where these interests arise out of contractual arrangements such as share-cropping or any such arrangements where the portion of a farm is given to the landowner

at the end of the harvest. Notable amongst them are the;

  1. “Abunu”- An arrangement where the land or proceeds is divided into two at the time of harvest between the landowner and the tenant.
  1. ”Abusa”- Another arrangement where the land is divided into three at the end of the harvest period. The proceeds or land is shared in 2:1 ratio between the landowner and the tenant. The landowner usually has the “right of the first choice”.
  1. License 

This is a personal permission granted with or without consideration by a landowner with whatever interest to another for the use or occupation of a parcel of land. The license usually specifies the use of the land and may come with some terms and conditions. 

Note that license does not confer on the Licensee the ownership right of the property. It can therefore not be transferred to the Licensee’s successors.

The writer is a Chartered valuation & Estate Surveyor Alternative Dispute Resolution Practitioner

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