Ghana Property Buyers: Be Prepared for Due Diligence Pitfalls

As the Ghanaian real estate market continues to grow in popularity among foreign investors, it’s essential for buyers to be aware of the potential pitfalls that can arise during the due diligence process. A comprehensive understanding of the complexities surrounding land ownership, contracts, and property insurance is crucial to avoid costly mistakes.

Financial Due Diligence

In our previous article, we highlighted the importance of conducting thorough financial due diligence when purchasing a property in Ghana. This includes assessing taxes, utility bills, and outstanding debts linked to the property. However, financial obligations are just one aspect of the due diligence process.

Environmental Assessments: A Must-Consider

While environmental assessments may not be legally mandatory for residential properties in Ghana, they are highly advisable. A thorough assessment can identify potential hazards such as soil contamination or flooding risks, ensuring a safe and healthy living environment.

Building Inspections: A Crucial Step

A qualified inspector should assess the condition of the property, examining structural integrity, electrical systems, plumbing, and any potential repairs or maintenance issues. This inspection can save buyers from future expenses and safety hazards.

Utilities and Neighborhood Research

Verifying access to reliable utilities such as electricity, water, and sanitation services is critical. Buyers should also research the neighborhood and community, considering factors like crime rates, local schools, transportation facilities, and amenities.

Easements and Rights of Way: A Hidden Risk

Buyers must understand easements or rights of way, which can significantly impact how they use their property. These legal rights allow others to use a part of the buyer’s property for a specific purpose, such as a shared driveway.

Future Development Plans: A Key Factor

Contacting local planning departments or municipal offices can provide valuable insights into any upcoming projects that could affect the property’s value or enjoyment.

Historical Listings and Disputes: A Critical Check

Buyers should research the property’s history to identify any legal disputes or claims against it. Such issues could lead to legal complications in the future.

The Due Diligence Process: Who Are the Key Professionals?

In Ghana, the due diligence process involves several key professionals, including lawyers and surveyors. Lawyers help with legal due diligence, ensuring that the property title is clear and the sale is in compliance with local laws. Surveyors conduct a physical survey of the property, verifying its boundaries, size, and accuracy.

Language and Communication Barriers: A Challenge for Foreign Buyers

Foreign buyers may face additional risks due to unfamiliarity with local practices and laws. It’s essential for them to engage knowledgeable local professionals who understand the intricacies of Ghanaian real estate law and practices.

Property Insurance: An Added Layer of Security

While property insurance is not legally required in Ghana, it’s highly recommended. Insurance can cover risks such as property damage, theft, and other liabilities, providing an added layer of security for buyers.

Conclusion

By being aware of these potential pitfalls and taking the necessary steps to conduct thorough due diligence, foreign investors can ensure a smooth and successful real estate transaction in Ghana.