A lease is an interest in land which is created to last for a fixed period. This means that every lease has a specific date on which it commences and a date on which it must expire.
In Ghana, a lease may be as short as one year and as long as agreed on between the parties involved. The most common practice however is that buyers are offered a 99 year lease. There is a notion that there cannot be a lease of more than 99 years in Ghana but I personally have not come across any law that asserts this position. An example of a lease longer than 99 years is TDC’s 125 years interest in Tema lands which commences from the year 1956.A lease is a contract between the parties involve and therefore the number of years can be negotiated till an agreement is reached. The Ghanaian property market is a 'Seller's Market' thereby giving the seller an advantage in such negotiations.
It is critical, however, to note that the Constitution, in Article 266, states that a non-Ghanaian cannot have more than a 50-year lease interest. Non-nationals acquiring property should be guided by this.
The person who creates a lease is known as the LESSOR and the person to whom the lease is granted is known as the LESSEE. A lease creates a landlord and tenant relationship between the lessor and lessee. There are certain features that characterize a lease. It must, first, be for a definite period i.e. the start and end dates must never be in doubt. This implies that the lessor is entitled to repossess the leased property when the lease comes to an end. A lease must give exclusive possession of the subject land to the lessee.
Some people who have expressed disbelief, and in some instances discomfort and anger, at the fact that the property that they purchased or inherited was not theirs forever. This is because they simply did not understand what a lease means; or they just did not read what the land documents says; or professionals were not consulted during the entire transaction. The laws on land in Ghana forbids the outright sale i.e. freehold conveyancing in Stool lands. Family lands however may grant a freehold. Subsequent posts will discuss the types of land in Ghana and their implications.
A common question that is asked is " I bought bare (undeveloped) land and have now built a house; does it mean that the house together with the land will go to the original land owner upon expiration of the lease? The answer is “YES”! The legal principle: Quicquid plantatur solo, solo cedit means that something that is or becomes affixed to the land becomes part of the land; therefore, title to the fixture is a part of and passes with title to the land and consequently whosoever owns that piece of land will also own the things attached.
Upon the expiration of a lease, the lessee can always negotiate the renewal. Even before expiration of the lease (especially where the years remaining is so small it may not make an intended project viable) the existing lease could be surrendered and renewed for a longer term.
In summary, a lease must include:
- Names of the parties of the agreement.
- The starting date and duration of the agreement.
- Identifies the specific property being leased (usually depicted by the site plan).
- Provides conditions for renewal or non-renewal and other covenants.
- Has a specific consideration (a lump sum, or periodic payments such as ground rent) for granting the use of this object.
By: Kwame Ankapong Yeboah
Real Estate Consultant
BJ da Rocha and CHK Lodoh- Ghana Land Law and Conveyancing, 2nd Edition, 1999