Notes on Creation of Mortgages: Registration of
Mortgages (Land Title and Deeds)
Introduction
The registration of mortgages is an essential step in securing and enforcing
mortgage agreements. In Ghana and Africa, registration ensures the mortgage is
recognized under the law, protects the rights of both parties, and establishes
priority in the event of competing claims. The process varies depending on the
type of land registration system in place: the land title registration system
or the deed registration system.
Legal Framework for Registration of Mortgages in
Ghana
Land
Registration Systems in Ghana
Ghana operates two primary systems for land registration:
Deeds
Registration System: Governed by the Land Registry Act, 1962 (Act 122).
It records the transaction but does not guarantee ownership or interest.
Land
Title Registration System: Governed by the Land Title Registration Act, 1986
(PNDCL 152). It guarantees the legal ownership of the land and any
registered interests, including mortgages.
Registration
Requirements
Under
the Deeds Registration System:
The
mortgage instrument must be submitted to the Lands Commission for
registration.
A detailed
description of the property, the mortgage terms, and evidence of the
parties' consent are required.
The
registrar records the transaction but does not verify or guarantee
ownership.
Under
the Land Title Registration System:
Mortgages
must be registered at the Land Title Registry to create a legal
interest.
The
register examines the title to ensure its validity before registration.
The
registered mortgage is noted in the folio of the mortgaged property,
providing notice to third parties.
Perfection
of Mortgages
Payment of stamp
duty on the
mortgage instrument.
Submission
of the instrument for registration within the stipulated timeframe to
avoid invalidity or penalties.
Issuance of
a certificate of registration for mortgages under the title registration
system.
Priority
of Mortgages
The date of
registration determines the priority of claims under the title
registration system. Earlier registered mortgages take precedence over
subsequent ones.
In the
deeds registration system, priority is generally determined by the date
of execution, but disputes may arise due to the lack of verification
mechanisms.
Benefits
of Registration
Ensures
legal recognition of the mortgage.
Protects
the mortgagee’s interest in the event of default or foreclosure.
Provides
transparency and reduces disputes over ownership or claims.
Registration of Mortgages in Africa
Common
Land Registration Systems
Deeds
Registration Systems: Found in countries like Nigeria and Kenya. These
systems focus on recording the transaction but lack verification of
ownership.
Title
Registration Systems: Used in countries like South Africa and Rwanda,
providing a more robust framework for securing land interests.
Legal
Requirements Across Africa
Written
Agreements: Mortgages
must be documented in writing and signed by the parties.
Registration
at Appropriate Authorities: Mortgages are registered at designated land
registries, such as the Deeds Registry or Land Title Registry.
Compliance
with Local Laws: Requirements vary by country, with some
jurisdictions requiring additional approvals (e.g., spousal or communal
consent).
Payment
of Fees:
Registration fees, taxes, and stamp duties are mandatory in most African
countries.
Challenges
in Mortgage Registration
Fragmented
Land Records: Incomplete or outdated land records hinder
efficient registration.
High
Costs: Registration
fees and taxes can be prohibitive for some borrowers.
Complex
Procedures:
Bureaucratic delays and lack of clarity in registration processes
discourage compliance.
Dual
Land Tenure Systems: Many African countries operate customary and
statutory systems, leading to conflicts over land ownership and
registration.
Innovations
and Reforms
Digital
Land Records: Countries like Rwanda and Ghana are digitizing land
records to enhance efficiency.
Decentralization:
Establishing regional offices to ease access to registration services.
Public
awareness campaigns: educating the public on the importance of mortgage
registration.
Importance of Mortgage Registration
Legal
Validity and Enforceability
Registration
provides legal backing to the mortgage, making it enforceable in court.
Public
Notice
Registered
mortgages serve as notice to third parties, preventing fraudulent
transactions.
Establishment
of Priority
Registration
determines the order of priority in cases of competing claims over the
property.
Risk
Mitigation
Ensures
that both mortgagors and mortgagees are protected from disputes and loss
of interest.
Conclusion
The registration
of mortgages is a critical component of land and property law in Ghana and
Africa. While the systems in place vary between deeds and title registration,
they share the common goal of protecting interests, ensuring transparency, and
fostering trust in land transactions. Reforms such as digitization,
harmonization of land tenure systems, and streamlined processes are necessary
to overcome existing challenges and improve access to secured credit facilities
across the continent.
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