Whether you are leasing commercial land for a project, farmland for agriculture, or a plot for residential development, the lease agreement is the most important document in the transaction. A weak or poorly drafted lease can cost you your investment. Here are the 10 things you must check before signing.
1. Lessor's Title and Authority
Confirm the person leasing you the land actually owns it — and has the right to lease it. Ask for the title deed or Land Title Certificate. If the lessor is a company, check that the board has authorized the lease. If it's stool land, confirm the chief and elders have authorized the grant.
2. Exact Description of the Land
The lease must precisely identify the land: plot number, parcel number, survey plan number, GPS coordinates where possible, and physical boundaries. Vague descriptions like "approximately 2 acres near the main road" are insufficient and invite disputes.
3. Lease Term and Commencement Date
How long is the lease? When does it start? When does it expire? Make sure the term is clearly stated. Ghana law limits leases by non-Ghanaians to 50 years maximum. Ghanaians can hold leases up to 99 years. Confirm the term does not exceed these limits.
4. Rent Amount and Payment Schedule
How much rent is payable? Monthly, annually, or as a lump sum? Where and how is it paid? What is the grace period for late payment? What is the penalty for missed payments?
5. Rent Review Clause
Can the rent be increased during the lease? How often and by how much? A poorly drafted rent review clause can allow the lessor to increase rent dramatically — effectively making the lease unaffordable. Watch for: "rent to be reviewed to market rate every 5 years" — this could mean a 300% increase.
6. Permitted Use
What are you allowed to use the land for? Residential only? Commercial? Agricultural? Can you sublet or assign the lease? Can you build structures? Are you allowed to alter or develop the land? Any restriction on use must be explicitly agreed upfront.
7. Development Rights and Ownership of Buildings
If you build on leased land, what happens to the building when the lease expires? Does it revert to the landowner, or do you have the right to remove your structures, or are you entitled to compensation? This is critical for any development project on leased land.
8. Renewal Option
Do you have a right to renew the lease when it expires? On what terms? At what rent? Without a renewal option, you could lose your investment when the lease ends. The option should be exercisable with reasonable notice (e.g., "Tenant may renew for a further term of X years by giving 6 months' written notice before expiry").
9. Termination and Break Clauses
Under what circumstances can either party terminate the lease early? What notice is required? What happens to improvements on the land if the lease is terminated? Are there penalties for early termination?
10. Registration
Is the lease being registered at the Lands Commission? Leases for more than 3 years must be stamped and registered. An unregistered long lease may not bind a third party who subsequently buys the land. Always register long leases.
Red Flags to Walk Away From
- Lessor cannot produce original title documents
- Vague description of the land
- No rent review mechanism (but also no cap on increases)
- No renewal option for multi-year leases
- Buildings and improvements automatically forfeit to lessor at end of lease
- No registration of the lease
Before signing any lease, use our free Land Deal Risk Check. Read about leasehold vs freehold and searching for encumbrances.