Ghana’s real estate regulatory landscape is shaped by its unique blend of customary and statutory laws. While these regulations create challenges, they also present opportunities for growth and development. The regulatory framework that governs the sector is somehow complex, it encompasses primarily, the 1992 Constitution, the Land Act of 2020 (Act 1036), the Land Use and Spatial Planning Act, of 2016 (Act 925), the Real Estate Agency Act of 2020 (1047), and other auxiliary legislations such as the rent control law, Rent Act, 1963 (Act 220) which is currently under review for subsequent amendment, these provide the regulatory framework for the sector.
The new Land Act 2020 (Act 1036) provides the legal basis for the acquisition, ownership, and use of land in Ghana. The Land Use and Spatial Planning Act, 2016 (925) on the other hand, provides for the regulation and management of land use and development. The Real Estate Agency Act of 2020 (1047) is to regulate real estate agency practice, commercial transactions in real estate including the sale, purchase, rental etc.
The rent Act, 1963 (Act 220) simply aims to regulate the relationship between landlords and tenants in order to prevent landlords from abusing their power over tenants. Different sections of these legislation covers land tenure systems, property ownership, and various regulations impacting market dynamics. Understanding these regulations is essential to navigate the country’s real estate landscape.
Land Tenure Systems:
Ghana’s land tenure system comprises customary and statutory arrangements. Customary land ownership is prevalent in rural areas and is managed by traditional authorities, who the constitution describe as the custodians of the land. Stool/Skin lands fall under this customary category and particularly skin lands acquisition and title registration are fraught with several issues including unreliable record-keeping systems and land encroachments. Statutory land ownership, on the other hand, is based on formal registration and is regulated by the government. Balancing these systems presents challenges, as the informality of customary land ownership often leads to disputes and conflicts.
Property Ownership Laws:
The 1992 Constitution of Ghana establishes the legal framework for property ownership, under Clause 6 of Article 20 of the 1992 Constitution, if the property so acquired is not used for the intended purpose for which it was acquired, the owner of it immediately before the compulsory acquisition (usually by the state) has the right of first option to re-acquire the property. There is therefore no doubt that re-acquisition is another mode of acquiring for example allodial title land.
The Land Act of 2020 (Act 1036) regulates land transactions and administration. The Act has introduced the concept of “Stool Land” to formalize customary land ownership and establish legal recognition for traditional authorities. Property rights are safeguarded, and property can be owned by individuals, companies, or even communities.
Implications on Market Dynamics:
Land Disputes: The coexistence of customary and statutory land systems can result in disputes, impacting real estate transactions. Unclear land ownership can lead to litigation and delays in property development projects. Improved legislation is helping to curtail some of these inevitable human occurrences.
Property Titling: as we know, the process of obtaining land title deeds can be complex and time-consuming. This can hinder investments and lead to uncertainty in property transactions. Also lease or sub-lease terms can largely affect property values, as the number of years remaining on a lease gets fewer the property price declines.
Foreign Ownership: Foreign individuals and entities are allowed to own property in Ghana, but with certain restrictions, the only major one being that Non-Ghanaians are only entitled to a leasehold or sublease interest for up to a maximum period of 50 years. These restrictions we’re told are in place to protect national interests and to avoid excessive foreign influence on the local property markets. Many times foreigners get disappointed wishing they are allowed longer lease terms, even though the limited term is equally renewable.
Urbanization Challenges: Rapid urbanization has strained land resources and led to informal settlements. Government efforts to address this include urban renewal projects like the marine drive project and initiatives like LAP to properly formalize and digitize land administration/ownership.
Rent Control Bill: The Rent Control bill under consideration in Parliament, is a review and amendment of the old Rent Act,1963 (Act 220), the new bill awaiting passage equally seeks to regulate all rental issues including rent increases, tenant rights, and eviction procedures. While the Act aims to strike a balance between landlords and tenants, its enforcement has been inconsistent.
Strategic Investments: Investors and developers need to carefully consider land tenure issues and ownership rights before making significant real estate investments. Partnering with legal experts well-versed in Ghana’s real estate laws is essential.
Government Initiatives:
The Ghanaian government over the years has introduced various policies and initiatives to improve the real estate sector’s regulatory environment. These include the Land Act of 2020, the National Housing Policy, and efforts to digitize land records to enhance transparency and streamline property transactions.
Let me re-iterate that understanding the above implications of property ownership laws, land tenure arrangements, and related regulations is critical for anyone looking to invest, develop, or operate within Ghana’s dynamic real estate sector. In all possibility, it’s better to collaborate with industry professionals or legal practitioners who specialize in the Ghanaian real estate law to provide the insights necessary for successful navigation of this intricate regulatory framework. If you need an expert contact Sixjays Homes +(233) 549 491762 or sixjaysghana@gmail.com.
