Building a house in Ghana is one of the biggest investments most people will ever make. It is also one of the riskiest — contractor abandonment, cost overruns, and substandard work are widespread. The single most effective protection is a comprehensive written construction contract. Here's what it must contain.
Vetting Your Contractor First
Before any contract, verify:
- Registration: Is the contractor registered with the Ghana Institution of Surveyors (GhIS) or the Ghana Institution of Engineers (GhIE)?
- Track record: Visit at least 2 completed projects. Talk to those clients.
- Tax registration: Do they have a TIN? Can they issue a VAT receipt?
- Insurance: Do they have contractor's liability insurance?
An unregistered contractor with no verifiable track record is a major risk regardless of how cheap their quote is.
Getting Multiple Quotes
Always get at least 3 quotes from different contractors based on the same Bill of Quantities (BoQ). A BoQ is a detailed document prepared by a quantity surveyor that specifies every item of materials and labour needed. Without a BoQ, you cannot compare quotes meaningfully — contractors will quote different things.
Essential Contract Clauses
1. Scope of Work
Exactly what is being built? Reference the approved building plans, engineering drawings, and BoQ. "Build a 3-bedroom house" is not sufficient — every room, every fitting, every material must be specified.
2. Contract Sum and Payment Schedule
Total price, broken into milestone payments tied to physical progress:
- Mobilisation: 10–15% on signing
- Foundation complete: 20%
- Roofing complete: 25%
- Internal works complete: 20%
- Final completion: 10%
- Retention: 10% (held for 6–12 months after completion)
Never pay more than 15% upfront. Progress payments tied to physical milestones prevent contractors from taking your money and abandoning the project.
3. Completion Date and Liquidated Damages
Specify an exact completion date. For every week the contractor is late (without an approved extension), they pay you a fixed sum — "liquidated damages." This must be a genuine pre-estimate of your actual loss (e.g., rent you're paying while waiting), not a penalty.
4. Variations Procedure
Any change to the original scope must be agreed in writing before the work is done, with a price. Verbal variation instructions are a major source of disputes — contractors claim additional work; clients deny authorising it.
5. Defects Liability Period
Typically 12 months after completion. During this period, the contractor must fix any defects that appear at no charge. The retention (10% held back) is released at the end of this period if no defects remain.
6. Dispute Resolution
Specify: mediation first, then arbitration or court. Many construction contracts in Ghana use the Ghana Arbitration Centre for faster resolution than court litigation.
What to Do if a Contractor Abandons Work
- Send formal written notice requiring them to return within 7 days
- If no response, formally terminate the contract in writing
- Get a quantity surveyor to value the work done
- Engage a replacement contractor
- Sue the original contractor for the difference in cost and any other losses
Use our free Land Deal Risk Check to ensure your land is secure before building. Read about building permits and property valuation.
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