Land Pledge Agreement (Ghana)

A Land Pledge Agreement in Ghana sets out the rights, duties and consideration binding the parties to it.

The land pledge is a distinctive feature of Ghanaian and West African customary land law. Under customary land tenure in Ghana, a pledge (known in Akan as 'awunyade' or 'fie') traditionally involved the delivery of possession of the land itself to the pledgee, who would use the land and collect its fruits until the pledgor repaid the loan. Section 69 of the Land Act 2020 (Act 1036) has partly codified this customary practice while requiring that a land pledge over registered land be evidenced in writing, stamped, and registered with the Lands Commission of Ghana to be effective against third parties.

The Land Act 2020 (Act 1036) is the primary statute governing land security interests in Ghana. Act 1036 came into force on 24 December 2020 and consolidated the Administration of Lands Act 1962 (Act 123), the Land Title Registration Law 1986 (PNDCL 152), the Land Commission Act 2008 (Act 767), and the Conveyancing Act 1973 (NRCD 175) into a single thorough framework. Part Five of Act 1036 specifically governs security interests over land, including mortgages under Section 61, charges under Section 66, and pledges under Section 69.

A Land Pledge Agreement in Ghana differs from a mortgage in a critical respect: under a pledge, the pledgor generally delivers physical possession of the land or, for registered land, delivers the land certificate issued by the Lands Commission to the pledgee, without formally transferring legal title. The pledgee acquires a possessory security right over the land until repayment. Under a mortgage under Section 61 of Act 1036, the mortgagor executes a formal deed transferring a legal or equitable interest to the mortgagee as security, with the right of redemption upon full repayment. The Land Pledge Agreement is therefore a simpler and more accessible form of land security, commonly used in agricultural communities, among small traders, and by rural landowners who may not have access to formal bank mortgage facilities.

The Lands Commission of Ghana, established under Section 10 of Act 1036, maintains the Land Registry for all regions of Ghana. A Land Pledge Agreement affecting registered land must be registered with the Lands Commission under Section 96 of Act 1036 to constitute constructive notice to third parties. Failure to register the pledge means that a subsequent bona fide purchaser for value without notice may take free of the pledge. Stamp duty on the Land Pledge Agreement is payable to the Ghana Revenue Authority (GRA) under the Stamp Duty Act 2005 (Act 689) before registration is accepted by the Lands Commission.

The Borrowers and Lenders Act 2020 (Act 1052) regulates lending secured against land in Ghana and imposes disclosure requirements on lenders, including licensed banks supervised by the Bank of Ghana (BoG) under the Banks and Specialised Deposit-Taking Institutions Act 2016 (Act 930). Where the pledgee is a licensed financial institution, the terms of the Land Pledge Agreement must comply with Act 1052, including the requirement to provide the pledgor with a written loan agreement disclosing the total cost of credit, interest rate, and repayment schedule in advance.

The Alternative Dispute Resolution Act 2010 (Act 798) provides for arbitration and mediation of disputes arising from land pledge agreements in Ghana through the Ghana Arbitration Centre or a court-annexed Alternative Dispute Resolution (ADR) centre. Parties frequently include an ADR clause in the Land Pledge Agreement to provide a faster and less expensive mechanism for resolving default disputes than litigation before the High Court (Land Division) in Accra.

A Land Pledge Agreement in Ghana is needed whenever a landowner wishes to use their land as collateral to secure a loan or financial obligation without executing a full mortgage or transferring legal title to the lender.

A Land Pledge Agreement is required when a farmer, trader, or small business owner in Ghana needs working capital and offers agricultural or residential land as security to a private lender, a savings and loans company, or a rural bank supervised by the Bank of Ghana (BoG). Unlike a bank mortgage, a land pledge can often be arranged without a formal valuation report and is therefore faster and more accessible for informal sector participants.

A Land Pledge Agreement is needed when a landowner under customary tenure — holding land from a stool, skin, or family under a letter of allotment attested by the Office of the Administrator of Stool Lands (OASL) — pledges that land to a community lender or rotating credit group (susu) as security for a loan. The customary pledge must be documented in writing and registered with the Lands Commission to protect both parties under Section 69 of the Land Act 2020 (Act 1036).

A Land Pledge Agreement is required when a borrower offers land as security for a bridging loan to fund a property purchase, construction project, or business venture, with the expectation that the loan will be repaid within a fixed short-term period — typically six months to three years — from the proceeds of the project or from another financing arrangement.

A Land Pledge Agreement is needed when a parent or family member pledges family land as security for a loan to fund the education, medical treatment, or travel expenses of a family member, and the family wishes to document the pledge formally to protect the family land from sale or further encumbrance without the knowledge and consent of all family members.

A Land Pledge Agreement is also required whenever a lender who has advanced money against informally held land wishes to formalise the security arrangement, register the pledge with the Lands Commission of Ghana, and obtain legal protection against the risk of the pledgor creating a competing security interest or selling the land to a third party without discharging the pledge.

Where the loan secured by the Land Pledge Agreement is advanced by a licensed financial institution under the Borrowers and Lenders Act 2020 (Act 1052), the lender must register the pledge and the underlying loan agreement with the Collateral Registry administered by the Bank of Ghana to obtain priority over subsequent secured creditors.

A binding Land Pledge Agreement in Ghana under Section 69 of the Land Act 2020 (Act 1036) must contain the following essential elements to be enforceable against the parties and against third parties after registration with the Lands Commission.

Parties: Full legal names, addresses, Ghana Card National Identification Numbers (NIN) issued by the National Identification Authority (NIA), and GRA Tax Identification Numbers (TIN) of both the pledgor (landowner/borrower) and the pledgee (lender). Where a party is a company incorporated under the Companies Act 2019 (Act 992), the company registration number from the Office of the Registrar of Companies (ORC) must be stated.

Description of the Pledged Land: The physical location of the land, GPS coordinates, Lands Commission registration district, plot number, block, and land area in hectares or square metres. Where the land is registered, the land certificate number issued by the Lands Commission under Section 98 of Act 1036 must be referenced. For customary land, the stool, skin, or family allocation letter attested by the Office of the Administrator of Stool Lands (OASL) serves as the primary title document.

Loan Details: The principal amount of the loan in Ghana Cedis (GHS), the agreed interest rate (expressed as a percentage per annum or per month), the total amount repayable, the repayment schedule, and the maturity date. Disclosure of the total cost of credit is required under the Borrowers and Lenders Act 2020 (Act 1052) where the pledgee is a licensed financial institution regulated by the Bank of Ghana.

Possession of Title Documents: A clear statement of whether the pledgee takes possession of the original land certificate or title deed during the pledge term, as this is the primary mechanism of the pledge under Section 69 of Act 1036. Delivery of the title documents creates the pledgee's security right and prevents the pledgor from dealing with the land without the pledgee's consent.

Pledgor's Rights During the Pledge: Whether the pledgor retains the right to occupy, use, and collect income from the pledged land during the pledge term, or whether the pledgee takes physical possession and collects the rents or agricultural output as interest in kind. The Land Act 2020 (Act 1036) permits both forms of pledge.

Default and Enforcement: The events of default — including non-payment of loan instalments by the due date, breach of the pledgor's covenants, or insolvency of the pledgor — and the pledgee's remedies on default, which under Act 1036 include applying to the High Court (Land Division) for an order of sale of the pledged land or for transfer of the land to the pledgee in satisfaction of the debt.

Redemption: The pledgor's right to redeem the pledged land upon full repayment of the loan, interest, and all costs. The pledgee must return the title documents within a specified number of days after redemption and assist the pledgor in noting the discharge of the pledge with the Lands Commission.

Registration: Both parties must attend the Lands Commission of Ghana to register the pledge under Section 96 of Act 1036. Stamp duty payable to the Ghana Revenue Authority under the Stamp Duty Act 2005 (Act 689) must be settled before registration. Failure to register means the pledge is not effective against third parties.

Governing Law and Dispute Resolution: Ghana law governs the agreement. Disputes may be referred to the Ghana Arbitration Centre under the Alternative Dispute Resolution Act 2010 (Act 798) or litigated before the High Court (Land Division) in Accra or the relevant regional capital.

Forms-legal.com provides this Land Pledge Agreement template as a starting point for landowners and lenders in Ghana. Parties are advised to seek the advice of a solicitor enrolled with the Ghana Bar Association and a licensed valuer registered with the Ghana Institution of Surveyors (GhIS) before executing a pledge over significant land assets.