What are the main laws that govern Real Estate in Zimbabwe?
The right to ownership of land is enshrined in the Constitution of Zimbabwe especially in the Bill of Rights, sections 72 and 73 respectively. Every person in Zimbabwe, has the right to acquire, occupy, use, transfer, lease, hypothecate (i.e. hypothecation occurs when an asset is pledged as collateral to secure a loan. The owner of the asset does not give up title, possession, or ownership rights, such as income generated by the asset. However, the lender can seize the asset if the terms of the agreement are not met) or dispose of all forms of property.
What is a Title Deed?
A Title Deed is legal document that confirms ownership of immovable property that is land.
“Always get a lawyer to verify the authenticity and originality of the Title Deed before proceeding with a purchase whether Land/Stand/Property,” ~ ZimProperties
What is the process of acquiring a Title Deed in Zimbabwe?
A seller of a property, be it a house or a flat, will engage a registered and licenced estate agent to sell on his / her behalf. An estate agent knows the market conditions, property value, market demand and prospective buyers.
The seller gives the agent the mandate to sell, whether a sole mandate or engages many estate agents to market and sell the property.
Once given the mandate the estate agent markets the property in order to find a buyer. They will usually engage a property portal like Classfieds.co zw, Property.co.zw or Zim.Properties to help them market the property on the internet.
Any prospective buyer is normally required to make a formal offer. If the offer is accepted by the seller then the seller and prospective buyer enter into an agreement of sale for the property
For the agreement of sale it is advisable to use a registered legal practitioner who is known as a conveyancer.
Upon successful conclusion of the agreement of sale and payment of the purchase price by the purchaser the estate agent becomes entitled to an agency commission which is regulated. This is usually 5% – 10% of the property value.
To protect all parties, the money to be used to complete the purchase, should be deposited into a trust bank account of the law firm which is conveyancing.
The funds should be held in trust and only released upon successful registration of the property. This protects the purchaser and the seller. It is possible for seller and buyer to agree other payment arrangements.
The appointed conveyancer then handles the conveyancing, which is the process of transferring a Title Deed from the seller to the buyer.
The buyer is required to pay conveyancing fees to the conveyancer. These fees are regulated by the Law Society of Zimbabwe.
There is a tax charge for any property transaction. The conveyancer facilitates the tax process whereby Zimbabwe Revenue Authority (“ZIMRA”) will assess whether the seller is liable to pay Capital Gains Tax (“CGT”) on the sale in order for the CGT clearance to be issued by ZIMRA.
Subject to certain considerations at law, a seller is liable to pay CGT where the selling price is higher than allowable costs. In other words, if the seller is making a gain (or profit) on the house sale, officially known as realising a capital gain on the sale of the property.
When ZIMRA has issued an assessment the seller is required to pay the CGT. Usually this is paid from the transaction proceeds after which ZIMRA issues a CGT clearance.
The conveyancer has to apply for a transfer of the Title Deed from buyer to seller with the Deeds Office.
The following documents are lodged by the conveyancer at the Deeds Office: (1) New or draft deed of transfer which would have been drafted by the conveyancer, bearing the name of the buyer as the new owner, (2) Current original deed of transfer in the name of the seller, (3) CGT certificate issued by ZIMRA, (4) Rates clearance, issued by the local authority e.g. Harare City Council, if the property is under their Juridiction. (4) There is need to clear any outstanding amounts due to ZESA, (5)
The Power of Attorney to pass the transfer, (6) Consent by the local authority in case there are restrictions to transfer, (7) Stamp duty which is paid to Government of Zimbabwe, (8) Declarations by seller and purchaser,
(9) Any relevant diagrams from the Surveyor General at the Deeds Office, if needed, (10) If the purchase is for Land Development then a Compliance Certificate issued by the local authority is usually required.
The Conveyancer Fees, Stamp Duty and Registration Fees are all paid for by the seller. This is usually financed by the money deposited by the buyer into the Trust Bank Account of the lawyers involved in the process.
“Make sure you are dealing with an Estate Agent registered and allowed to practice by theEstate Agent Council of Zimbabwe (“EACZ”). On our website, we only allow registered estate agents with the EACZ to advertise their properties.”
Are there legal restrictions on ownership of real estate by particular classes of persons (e.g. foreigners, non resident persons)?
There are NO restrictions. Section 71(2) of the Bill of Rights of Zimbabwe states that every person shall have the right to own all of forms of property.
What are the type of rights over land in Zimbabwe?
In Zimbabwe, there are 2 types of property rights, Real rights and Personal Rights. Real rights, include full titles to property such as houses and plots of land, as well as limited titles such as ground leases, building rights (‘rights of superficies’) and servitudes. Personal rights are contractual i.e. only binding to those parties named in the contract, whereas Real rights are binding on everyone.
Is there a scenario where the right to land differs to the right to building on that particular land?
Under normal circumstances, the owner of the land is also the owner of all structures and fixtures on the land including crops, buildings, machinery, wells, dams, ponds, mines, canals, and roads. This all stems from the roman legal maxim, “Quicquid plantatur solo, solo cedit – whatever is attached to the soil belongs to the soil.” It is possible to have a contractual agreement that any improvements on the property remain the property of one party while another owns the land.
Is all Land in Zimbabwe required to be registered? What land (or rights) can be unregistered?
Land in Zimbabwe is classified into 4 groups: (1) Communal Land, (2) Agricultural Land (3) Residential Land (4) State Land.
Communal land belongs to the State, and requires no registration. Occupants of Communal Land may use it according to the local laws. Rights to Communal land are limited to occupation and use for agricultural and residential purposes. These rights are determined by customs law. A permit from the local government may be needed to use Communal Land.
State Land is registered at the Deeds Registry. Since State Land belongs to the State (i.e. the Government), any Minister, for government purposes, may acquire the land and instruct the Deeds Registry to cancel the title deeds in respect of that land.
Agricultural Land is registrable at the Deeds Registry.
Residential Land is registrable at the Deeds Registry.
Is there a State guarantee of a Title? And if there is what does it guarantee?
There is NO state guarantee of Title by the State.
What rights in land are not required to be registered?
Personal rights (i.e. rights from contracts) are not registrable. Also, some rights in short-term leases (a short-term lease is any lease that is subject to a tenure of less than 10 years is considered a short-term lease)
Regarding land sale, when is the Title (Ownership) transferred to the Buyer?
The date on which the relevant Deed is registered at the Deeds Registry is the date fn which ownership was transferred from the seller to the buyer.
Is it possible that other property rights are priority over other property rights? Do earlier rights have priority over rights acquired later?
Real rights e.g. right to ownership of land take priority from the date they are registered. But there are instances whereby Personal rights (i.e. contractual) override Real rights, with Mortgage Bonds and Registered lessees being common examples.
How many Land Registries operate in Zimbabwe?
There are 2 Deeds Registry offices in Zimbabwe, located in Harare and Bulawayo.
Harare Deeds Registry
Department of Deeds Companies & Intellectual Property
38 Nelson Mandela Avenue, Harare
Bulawayo Deeds Registry
Tredgold building 2nd fl room 222 Fort Street/leopold Takawira Street Bulawayo
How does a an owner of Real Estate in Zimbabwe prove their ownership?
A Land owner proves ownership by means of producing a Deed of Transfer with matching personal information with their I.D. Documentation.
A Mortgagee (i.e. the lender in a mortgage which is typically a Bank) will prove ownership by means of a Bond.
When a lease is registered, the Lease holder proves ownership by means of a Notarial Deed.
Can any real estate transactions in Zimbabwe take place electronically (i.e. on the Internet)?
The Deeds Registries in Bulawayo and Harare still operate a manual system.
What documents are required by the Deeds Registry for the registration of ownership rights?
The documents required for registration of Title (Ownership of Real Estate) include; (1) Identity Documents of both the Seller and Purchaser (2) Power of Attorney (where necessary), (3) Company Resolutions (where necessary) (4) An Agreement of Sale (5) Documentation showing that all relevant taxes, rates and fees (Stamp Duty, Capital Gains Tax (CGT), Rates, Zesa etc) have been paid.
Can you sue and seek compensation from the Deeds Registry if they make a mistake with processing Deeds of Transfer or other documents?
NO. The Law (Section 84 of the Deeds Registries Act) provides that any act or omission by any registrar or any officer employed in the Deed Registry shall render the State or such registrar liable for any damages sustained by any person in consequence of an act or omission.