Introduction to the Conveyancing Transaction

Introduction:

In previous notes, conveyancing was defined as the act of preparing legal instruments that transfer an interest in real property. Prior to the preparation of any legal instrument by which title is transferred, there is a pre-contract stage, the contract stage, and the post-contract stage. The title is transferred at the completion stage, and stamping and registration are done at the post-completion stage. These stages are briefly discussed in this note and extensively discussed in subsequent notes.

1. Pre-Contract Stage – Searches, Enquiries, and Due Diligence:

Prior to an agreement to transfer an interest in land, due diligence is often conducted by the purchaser to prevent fraud.

It is common for a landowner to sell the same piece of land to multiple persons, as seen in the case of Amuzu v. Oklikah [1997-98] GLR 89-143. 

It is also common for a person with no interest in land to claim an interest in the land. Without an interest in the land, no valid transfer of an interest can occur, because nemo dat quod non habet.

It is therefore important to do the following before entering into a contract for the transfer of an interest in land:

1. Verify the identity of the vendor.
2. Verify the title of the vendor.
3. Confirm the nature of the land (stool land, family land, state land, etc.).
4. Evaluate documents of ownership.
5. Conduct searches at the Lands Commission, Town and Country Planning, and Collateral Registry.
6. Conduct a field visit.
7. Conduct background checks on prospective tenants.
8. Conduct community inquiries.

These are discussed in subsequent notes.

2. Contract Stage – Drafting and Exchanging Contract for the Transfer of an Interest in Land:

This is the stage where the vendor and the purchaser enter into a legally enforceable agreement for the vendor to transfer an interest in the land to the purchaser.

It involves two interrelated acts:

1. Drafting a contract for the transfer of an interest in the land to the purchaser. Here, the parties simply draft a contract by which the vendor agrees to transfer an interest in land to the purchaser at some future date, known as the completion date.
2. Exchanging the drafted contract. Here, the drafted contract is signed by both the purchaser and the vendor, and each party takes a copy. Each party can enforce the contract against the other party.

The drafted contract for the transfer of an interest in the land will usually make provision for the payment of a deposit by the purchaser. This deposit is part payment of the purchase price. According to Da Rocha and Lodoh in “Ghana Land Law and Conveyancing”, at page 363, the deposit is

treated as security in respect of any loss the vendor may suffer by the purchaser’s failure to complete the sale. The object of requiring a deposit is not only to secure a part payment of the purchase money, but also to bind the purchaser to complete, ie “it is a guarantee that the purchaser means business.”

Also, the drafted contract will make provision for the date of completion, which is the date the interest in the land, such as a leasehold interest, will be transferred by the vendor to the purchaser.

3. Post-Contract or Pre-Completion Stage – Requisitions on Title and Preparation of Conveyance:

Two main things happen after the conclusion of the contract for the transfer of an interest in land and before the interest is transferred to the purchaser:

1. Requisitions on title: Here, the purchaser’s solicitor asks the vendor’s solicitor questions to ensure that the vendor has good title. These questions are known as requisitions on title, defined as written enquiries made by the solicitor of an intending purchaser of land and addressed to the vendor in respect of insufficiency in the title of the vendor (see Da Rocha and Lodoh in Practical Draftsman). 
2. Preparation of conveyance: The conveyance is the instrument by which the interest is actually transferred from the vendor to the purchaser. After the contract for the transfer of the interest is executed, the purchaser, at his own expense, will draft a conveyance for approval of the vendor.

4. Completion Stage – Execution of Conveyance and Payment of Price:

At this stage, the balance of the purchase price is paid, and a conveyance instrument (such as a lease, assignment, or sublease) is executed and witnessed by at least one person.

Each party takes a copy of the executed instrument. At this point, the contract for the transfer of the interest has been fully performed.

5. Post-Completion Stage – Stamping and Registration:

The following occur at this stage:

1. Securing the property by going into possession.
2. Proof of instrument.
3. Stamping and registration.

Conclusion:

This note highlighted the stages involved in a conveyancing transaction. In subsequent notes, each stage will be extensively discussed.