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Legal Focus

OCTOBER 2013

inquiries, investigations as to the root of title of the vendor and other matters before a formal conveyance is drawn up for execution. Yet it is not unknown in Ghana for a conveyance to be drawn and executed by the parties without the parties having first entered into an agreement for the sale and purchase of law with all the precautions that this entails. Companies are advised to avoid informal purchases of land.

Second, a proper search must be conducted at the Lands Commission/ Land Title Registry to ascertain whether or not the land to be sold is the subject matter of any litigation or it suffers from any encumbrances. This search will further indicate whether it is state land. The objective in conducting the search is to confirm whether the vendor is the actual owner of the said land as far as the records of the Lands Commission Secretariat or the Land Title Registry is concerned. The search report is also important in that it provides information about whether the land is the subject of a proposed compulsory acquisition by the State or is the site for a proposed road, etc. If it is stool land or family land, it would help in knowing who to contact etc. A land purchaser must exercise extreme caution where the lands is located in an area prone to land litigation or where there are unresolved issues in relation to succession to a stool or the headship of the land-owning family. In addition to the official search, it is appropriate to visit the land and find out who the boundary owners are and whether they all trace their title to the same source. It is also necessary to have the boundary owners confirm whether the vendor is known to them as the owner of the land in question.

Third, to overcome the limitations of acquiring freehold interests in Ghana, a foreign company may have to incorporate a local company under the Ghana’s Companies Act, 1963(Act 179). Once the company is registered in Ghana, it will not be caught by the limitations of Article 266 regarding the inability of non-Ghanaians acquiring freehold interests in Ghana.

Besides a company complying with its internal decision-making processes for the

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purchase of land, it is a legal requirement, except in few cases, that all transactions affecting land in Ghana should be in writing. This means that before a company makes any payment for land there should be a document in writing spelling out clearly, at least, the parties to the transaction, the nature of the transaction, a description of the land, and the purchase price and other terms of payment. There are instances where the vendor provides a written document evidencing the transaction. Where this is the case, the document should be reviewed by the purchaser’s lawyer before it is executed. These writing requirements are easily catered for when a formal contract is entered into by the parties for the sale and purchase of land.

Finally, to ensure that the land is suitable for the intended purpose, the purchaser or his lawyers must find out from the regulatory authorities

(town and

country planning, survey departments, environmental protection agencies) whether the land can be used for the intended purpose. For example, where the land is required for agricultural or industrial activities, it will require other permits such as environmental impact assessment permits.

What are the key considerations when entering into a planning agreement?

Ghana is divided into local government units called district assemblies and under the Local Government Act, 1993(Act 462) the district assemblies have the power to properly plan the development of their districts. As such, any land transaction must be well situated within the plan of the districtBy Section 10 of the local government laws a District Assembly shall exercise political and administrative authority in the district, provide guidance, give direction to, and supervise all other administrative authorities in the district. In addition, a District Assembly shall— (a) be responsible for the overall development of the district and shall ensure the preparation and submission through the Regional Co-ordinating Council — (i) of development plans of the district to the Commission for approval; and