The Construction and Real Estate Digest with Daniel KONTIE: Legal and institutional weaknesses in the real estate sector (1)

… causes, risks and the urgent need for structural reforms

Ghana’s real estate sector has emerged as a strategic contributor to national economic growth, driven by rapid urbanization, demographic expansion and increasing domestic and foreign investment interest. Yet, the sector remains structurally constrained by deep-seated legal lacunae and institutional weaknesses that undermine tenure security, distort land markets and elevate transaction risks.

Despite ongoing reforms, these lacunae and institutional weaknesses continue to affect investor confidence, housing delivery and urban development outcomes. This series will examine the core legal and institutional challenges confronting Ghana’s real estate sector, their root causes and the systemic risks they generate, while setting the tone for a reform-focused discourse in subsequent parts of this series.

This first part is structured around two critical pillars, they are, Institutional Weaknesses and Legal Gaps. However, it is worth noting that, this introductory part will only provide a high-level overview of the key issues in brief to establish context. Subsequent parts in the series will examine each identified legal gap and institutional deficiency in greater depth, with focused analysis of their causes, implications and reform imperatives.

But before we go into the substantive issues, let me remind you that, the Africa Continental Engineering & Construction Network Ltd stands out as one of Ghana’s leading authorities in real estate solutions. From land acquisition, title registration, architectural design, general construction, property development, real estate investment advisory services et cetera, we provide a 360ºC service experience.

Ready to move from interest to investment, simply search “Africa Continental Engineering & Construction Network Ltd” on Google. Visit our website, explore available properties and reach out to our team for a swift professional service delivery.

With thousands of serviced litigation-free parcels of land across Accra and key growth corridors, we are uniquely positioned to help you unlock value in residential, commercial and industrial real estate. Now let us begin with the legal gaps.

Legal Gaps in Ghana’s Real Estate Sector Exposing Buyers to Risks

It is regrettable that glaring legal gaps in Ghana’s real estate sector have long been overlooked, enabling repeated exploitation of unsuspecting buyers and exposing them to fraud, uncertainty, and protracted disputes. In this regard, we shall look at only 6 key legal lacunae for want of space, starting with Limited Title Registration Coverage.

Limited Title Registration Coverage

A major legal gap in Ghana’s real estate sector is the limited coverage of the land title registration system. Despite reforms, a significant proportion of land transactions still operate under deed registration, which merely records documents without guaranteeing ownership. This system allows multiple registrations over the same parcel of land and exposes buyers to competing claims and protracted litigation. The lack of indefeasibility under deed registration has been repeatedly exploited by fraudsters who sell the same piece of land to multiple buyers.

Overlap between Customary and Statutory Land Tenure Systems

According to peered-reviewed land governance research, about 80% of land in Ghana is held under customary ownership, yet statutory law governs registration and conveyancing (Unbink and Quan 2023). The absence of a fully harmonized framework linking customary land authorities with statutory registries creates legal ambiguity over authority to sell land. This overlap has enabled unauthorized family members, rival stools and impostors to transact land sale deals without proper consent, leading to disputes that innocent buyers have to resolve at a greater cost in the future.

Absence of Mandatory Escrow to Protect Off-plan Buyers

Ghana’s real estate legal framework does not impose a general obligation for buyer funds especially in off-plan developments to be held in escrow or protected until verifiable milestones are achieved. Developers are legally permitted to receive large deposits without ring-fencing funds. This exposes buyers to financial loss when projects stall, approvals are revoked, or developers default.

Absence of Mandatory Developer Regulatory Law

The absence of a dedicated regulatory framework for real estate developers is a significant legal lacuna in Ghana’s real estate sector. Without clear legal obligations, licensing requirements, or performance standards for developers, buyers are left exposed to risks such as delayed or stalled projects, substandard construction and mismanagement of upfront payments. This gap allows some developers to operate with minimal accountability, making it easier for them to exploit buyers who have limited legal recourse.

Lack of Statutory Requirement for Verifying Seller Capacity

There is no explicit statutory requirement compelling sellers to prove their capacity to sell through standardized verification processes prior to sale completion. As a result, individuals without legal capacity, such as junior family members or unauthorized representatives to successfully sell land to unsuspecting buyers, without buyers knowing they lack the capacity to sell the property in the first place. In fact, this is partly the reason why customary lands are considered the most unsafe property investment in Ghana.

Discretionary Agency Commissions and Pricing Practices

While Act 1047 regulates agency conduct, it does not establish enforceable commission ceilings or transparent pricing rules. This discretion has enabled some agents to inflate prices, conceal commissions within purchase costs, or prioritize seller interests over buyer protection, thereby indirectly harming buyers through distorted pricing structures (ACECN, 2024). Commission rates are discretionary and arbitrary; therefore, buyers are shortchanged whilst properties take quite a long time to sell at the disadvantage of property owners.

Institutional Weaknesses in Ghana’s Real Estate Sector

Now, let us explore how institutional weaknesses affect Ghana’s real estate sector, highlighting how fragmented mandates, limited capacity and weak enforcement mechanisms have created opportunity for exploitation and risk for unsuspecting buyers. The first among these is corruption and transaction opacity in key institutions. Here we take a look at 11 of them starting with corruption.

Corruption and Lack of Transparency in Key Institutions

The Lands Commission, the principal institution responsible for land administration and registration is widely perceived to suffer from corruption, unofficial charges and extortion in land transactions. The absence of transparent processes and reliable access to public records allows intermediaries and insiders to manipulate transactions, leading to inflated costs and fraudulent transfers that continue to undermine sector confidence.

Partial Digitalization and Poor System Integration

The gradual rollout of digital platforms such as the Ghana Enterprise Land Information System (GELIS) has improved transparency but remains incomplete nationwide. The coexistence of manual and digital records creates opportunities for data inconsistencies, manipulation and duplication, which fraudsters exploit before records are fully synchronized.

Poor and Fragmented Institutional Arrangements and Coordination

Land administration functions are spread across multiple agencies without unified or synchronized systems. This fragmentation results in bureaucratic overlaps, duplicated searches, inconsistent decisions and unnecessary cost and time burdens for buyers. These are weaknesses that intermediaries exploit by offering expedited services or charging unofficial fees.

Weak Enforcement of Policy and Institutional Mandates

Even where laws and procedures exist to protect buyers, weak enforcement and lack of institutional discipline breeds exploitation. This has allowed unregulated middlemen and unauthorized agents to intercept key stages of the purchase process, misinform prospective buyers and charge unofficial fees, sometimes without even delivering secure ownership to buyers.

Inadequate Resources and Capacity Constraints

Lands sector institutions often struggle with staff shortages, limited technical infrastructure; underfunding and logistical constraints that prevent efficient service delivery. These capacity issues delay land transactions, reduce the quality of record-keeping and impair responsiveness to disputes which creates more opportunities for fraudsters and informal intermediaries to take advantage of unsuspecting buyers.

Weak Land Dispute Resolution and Court Capacity

Land disputes consume a significant share of judicial resources in Ghana and court resolution is fantastically slow, often taking years or even decades. The unintentionally sluggish judicial response dilutes deterrence for fraudulent actors and forces buyers into protracted litigation with limited institutional support, leaving many to abandon claims or accept settlements that favor the interests of only the powerful in society.

Insufficient Public Access to Reliable Land Information

Systems for public access to accurate, up-to-date land registry records or information remain weak, incomplete, or inaccessible across many regions. When buyers cannot independently verify records and with ease, they are more likely to rely on informal channels, which corrupt actors exploit by providing misleading or false information in exchange for compensations they don’t deserve.

Inefficient, Archaic and Manual Processes

Despite policy reforms, many land administration functions remain manual and paper-based particularly, customary lands, creating chronic delays, misplaced files and obstacles to accessing credible information about land ownership. This inefficiency not only slows down legitimate transactions but also creates avenues for fraudulent activities, where unscrupulous actors exploit procedural bottlenecks for self-aggrandizement at the expense of buyers.

Political Interference and Weak Governance Structures

Institutional weaknesses including political appointments, weak accountability mechanisms and limited oversight have undermined the credibility and effectiveness of land administration bodies. This environment weakens internal controls and oversight, allowing partisan or opaque decisions that favor influential actors at the expense of the common good.

Fragmented and Slow Land Registration Processes

Although the Land Act, 2020 (Act 1036) sought to streamline land administration, implementation remains fragmented across institutions such as the Lands Commission, Survey and Mapping Division and customary secretariats. Lengthy delays between purchase and registration create a vacuum during which fraudulent resale and document manipulation can take place, leaving buyers exposed before their interests are formally secured.

Limited Mechanisms to Prevent Illegal Land-guard Activity

While land guard groups are not formal institutions, institutional weaknesses and legal gaps have created a regime of land ownership insecurity, leading to the creation of these independent vigilante groups by individuals to protect their land interests. This has become a national security concern in recent times yet to be consciously dealt with, that is, if the state will do at all.

 Conclusion

In summary, Ghana’s real estate sector remains vulnerable due to deep-seated legal gaps and institutional weaknesses that together create fertile ground for fraud, multiple sales, unclear land rights and buyer exploitation; these systemic deficiencies not only undermine market confidence and inflate the cost of dispute resolution but also jeopardize economic development and citizens’ access to secure tenure.

It is therefore critical to make a comprehensive structural reform, including clearer legal safeguards, stronger regulatory frameworks, enforced professional standards and harmonized customary-state land governance. This is an urgent imperative for sustainable and equitable growth in the sector.

But before we part, do note that information provided in this article or any article by this writer is the opinions or views of the writer for general education purposes and does not constitute professional or legal advice. Readers are therefore advised to consult certified professionals/consultants before making any legally binding decision or any commitment that has financial implications. Stay tuned for the final part, Part 4, which will be on Post-Purchase Perfection.

References

• Africa Continental Engineering & Construction Network (ACECN, 2024). Regulating the real estate agency sector: Implications for agents and brokers; https://www.acecnltd.com/regulating-the-real-estate-agency-sector-in-ghana-implications-implications-for-agents-and-brokers/
• Africa Continental Engineering & Construction Network (ACECN, 2024). Evaluating the limitations of Ghana’s Real Estate Agency Act (Act 1047); https://www.acecnltd.com/evaluating-the-limitations-of-ghanas-real-estate-agency-law-act-1047-a-call-for-policy-refinement-and-inclusive-reforms/
• MDPI (2023). Toward Smart Land Management: Land Acquisition & the Associated Challenges in Ghana. MDPI; https://www.mdpi.com/2073-445X/10/3/239

• Ubink, J. M., & Quan, J. (2023). Legal pluralism and land tenure security in Ghana: The dominance of customary land ownership. Land, 12(1), 132. https://doi.org/10.3390/land12010132

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