The property buyer’s survival guide: Why legal due diligence is non-negotiable

NAMATIRAI RUZVIDZO

On November 7, 2024, a sombre atmosphere engulfed the  suburb of Ridgeview, Belvedere in the capital Harare, as the Harare City Council initiated the demolition of structures built on irregularly allocated land.

One can imagine that in the midst of all the destruction was a man who had diligently worked his entire life to achieve the dream of owning a home. Having invested his life savings into a beautiful home for his wife and children, his dream quickly turned into  a nightmare when he received  unexpected  visitors in the  form of  bulldozers  and their operators, signalling the loss of everything he had worked for.

Unbeknownst to him, the tragedy that unfolded was the direct result of the man’s failure to conduct proper legal due diligence. In his rush to secure a property, he had neglected to perform the necessary legal checks and research.

Now, his family faces homelessness, financial ruin, and emotional trauma. His once-secure future hangs precariously in the balance.

The man’s story will unfold as a cautionary lesson on the importance of seeking legal counsel and protecting one’s hard-earned investments.

In this article, we delve on the reason why due diligence is an essential, non-negotiable aspect before one invests in an immovable property.

What is due diligence of immovable property?

Due diligence of immovable properties involves investigating and verifying various aspects of a property before purchasing or investing.

This comprehensive process assists purchasers to make informed decisions, identify potential risks, and avoid costly surprises.

The following are the considerations before a buyer decides to purchase immovable property:

Properties whose mode of ownership is a title deed

One should conduct search at the Deeds Registry of the title deed. It is highly recommended that the deeds search be made physically rather than online.

If the deeds search is conducted physically one will get to ask any questions or raise queries directly to the Registrar or any designated officer at the Deeds Registry. The deeds search will also help highlight if there are any caveats, miscellaneous agreements, encumbrances (for example a mortgage bond), endorsements on the property in question.

What if the immovable property is subject of a deceased estate?

More often than not, families of deceased persons are in the habit of selling immovables usually to cater for beneficiaries’ expenses or to pay off various taxes accruing from winding up a deceased estate. Before one purchase an immovable property, which is subject of a deceased estate it is advisable to check the deceased’s file at the Master of the High Court. The potential buyer should check if there are letters of administration which appoint an executor as well as a document called a ‘consent to sale’ which authorizes beneficiaries of an estate to sell an immovable property.

What if the immovable is registered in the name of a minor or there is a sitting ten tenant?

If an immovable property is registered in the name of a minor, then consent of the High Court is needed, as the High Court is the guardian of all minor children until they reach the legal age of majority. If there is a tenant at the property it is also important to check whether they have been given the right of first refusal. If there is a lease agreement is important to check its provisions in order to determine the tenants’ rights. The right of first refusal is a contractual provision granting a party the exclusive opportunity to purchase or lease a property before it is offered to others.

What if the immovable property is held under a trust or a company?

It is also important to check the authenticity of the Deed of Trust with the Deeds Registry. Further, before the transaction is consummated there should be a resolution duly signed in compliance with the Trust provisions. A number of individuals are now opting to buy immovable properties under companies. This is completely legal. However, a buyer should conduct a search of the company with the Companies Registry to ensure that the entity is duly registered and the Directors can be verified. Further, before the transaction is consummated there should be a resolution duly signed by the Directors of the Company.

Property whose mode of ownership is developer or City Council cession

Zimbabwe has seen an influx in land development for residential purposes in recent times.

Therefore, a number of developers are now offering what is called ‘a developer’s cession’ as a mode of ownership. This is completely legal. However, before a buyer considers purchasing a property under developers’ cessions, they should conduct a physical visit to the developer’s premises to inspect the cession registry, as well as a comprehensive procedure of what buyers and sellers are to supply so as to effect transfer of cession. A further visit to the Surveyor General should also be made to inspect their files to check authenticity of the subdivision permit amongst other accompanying documents. For a council cession a buyer should also visit the relevant council to check the authenticity of the cession and to obtain requirements for the transfer of a cession from the seller to the buyer.

Conclusion

When buying an immovable property, careful consideration is crucial due to high financial investment and the complexity of the process itself. Immovable property purchase is a long-term commitment, and it also has significant emotional involvement. Therefore, before committing to the lifelong dream of owning a property, one should make significant investment in equipping themselves with knowledge of the property terrain as well as involvement of experts for guidance.