CONDOMINIUMS-VITAL FOR GHANA'S HOUSING SECTOR

By Hannah Owusu Boamah,Online Editor-Property Express
6 June 2012

Housing remains a key component in the triplets of the necessities of life namely, food, shelter and clothing.

As such, governments and individuals as well as developers and investors continue to commit resources into this vital sector.

In Ghana, the twist and turns of the housing or real estate sector calls for more innovative product and services that will meet this vital need of life.

A  viable alternative that  has not been much explored in the country , is the introduction of condominium, popularly known as  "condo"  in the developed economies or better still "high-rise building".

Condominium is a form of home ownership in which individual units of a larger complex are sold, not rented.

In this system of ownership, we see a building or complex in which units of the property are owned by individuals  but properties such as the grounds and building structure, are jointly shared among the unit owners.

In China, 64 million condos are available.

Those who purchase units in a condominium technically own everything from their walls inward. All of the individual homeowners have shared rights to most common areas, such as the elevators, hallways, pools and club houses.
Maintenance of these areas becomes the responsibility of a condominium association. Every owner owns a share of interest in the condominium association, plus an obligation to pay monthly dues or special assessment fees for larger maintenance problems.
Could this ownership plan be adopted in Ghana, considering  that the country's housing deficit stands at over one million houses, according to the Government of Ghana's website.

However such huge deficit rates calls for key decisions that would address these lapses, since most initiatives to reverse the trend have proved futile.

There is therefore the need for more proactive measures that will provide decent and affordable houses to all Ghanaians and such system could include ways to fully explore the condo system.

Taking a glance of the current predominant system of landlord and tenancy rifle day in and day out, could there by means to explore the use of condos to address such hitch.

To begin with, lets attempt to look at the merits and demerits of high-rise building.

Some critics have said a condominium arrangement is not the best option for every potential homeowner, since there could be noticeable lack of privacy in the common areas shared by owners.

 Those who would prefer to own all of their amenities and maintain their own lawn and garden may want to pursue single home ownership options instead of a condominium.

It can also be more difficult to sell a condominium unit as opposed to a home with acreage.

Therefore, this ownership style is said to be most suitable for  veteran apartment renters who don't mind having close neighbors and persons  who may not want to be bothered with external maintenance or the responsibility of lawn care.

Condos are also ideal for frequent travellers and therefore If you travel a lot or need to be able to leave with little notice, this can be your ticket to enjoying that freedom.

With this, you can travel never having to be concerned about your yard maintenance, waste or other security issues since all these things are handled for you.

Also condo living can also contribute to a more active lifestyle and residents are also each others keeper.

Condos also provide the opportunity for those wanting more amenities at less cost.

Moreover, this system is cost effective , it may be much lower than an equivalent single-unit home. Buying a condominium does allow equity to build, unlike paying monthly rent in an apartment complex.

Also instead of opting for rental where you continue to have headaches from a landlord and having to abide by so many "we don't do this in my house then a condominium living may be more advantageous financially than apartment rentals.

This ownership style is also an excellent alternative for many as their lives transition from one phase to another.
Condos also comes with certain demerits such as noise from neighbour’s, including those above and below your unit, parking at condominiums is often in a common area not attached to the home, no yard and some condo buildings may have stairs.
One thing to be aware of when living in a condominium setting is the political reality of an owners' association. Decisions may be made in monthly meetings which will cost individual owners more money, but not necessarily deliver equal benefits for all.
It can be nearly impossible to avoid being affected by at least one condo board decision, so active participation in meetings and discussions may be more compulsory than you might expect.
Condominium living may be more advantageous financially than apartment rentals, but it does require more active participation in community events.
 WHY CAN IT BE AN OPTION FOR GHANA?
Considering the income  and poverty levels in the country, condominiums can be a viable alternative, since they are quite moderate to owing an estate.
Secondly, due to the poor maintenance culture inhibit  in this part of the world, condos will be an appropriate system, since the responsibility of maintenance  will be handled not be the owners, but the associations.
It also provides an opportunity to re-adopt the community life-style, virtually fading out due to urbanisation.
The indigenous Ghanaian culture encourages brotherliness, being each other's keeper, hence this system will further strengthen such ties that exist in the local culture.
Also, with the current economic situation, where most inhabitants stay out mostly for work, condos will help ensure utmost security and peace of mind whiles away from home.
Notwithstanding these points,  another crucial factor is the rift between landlords and tenants, hence, this ownership style could ensure more peace in homes and encourage more people to channel resources there.
WHY THE NEED FOR CONDOMINIUM ACTS IN AFRICA
 In recent time, the Ghana Housing Finance Association  (GHFC), a trade association of practitioners of housing finance, is working with stakeholders to draft a Condominium Property Bill to develop condominiums to address challenges in the housing sector.
The bill will be used as an advocacy tool influence both legislative and executive arms of government to pass a Condominium Law.
Mr. Charles Bonsu, General Manager, Mortgage and Consumer Loans of HFC Bank Limited, who announced this at a four-day sensitisation workshop in Accra said it was for the development of a Condominium Law in Ghana; the purpose for the GHFA was to develop a form of national housing finance network to support pilot schemes, innovations and initiatives.

In addition, to strengthen collaboration and partnership between government, private sector, bilateral and multi-lateral agencies as well as civil society, to address housing finance challenges.

As part of effort to achieve such feat,  GHFA is to train and equip members with general information and advocacy skills and to take them through the essential steps in designing and planning an advocacy campaign and undertake the advocacy action leading to the development and promulgation of a Condominium Law in Ghana.

The development of flats and high rise properties has become the norm in Ghana, especially in the metropolis because they enable developers to maximise the use of land and space.

Players in the housing industry therefore say there is the need to pass a law to regulate the industry and also encourage the formation of property management companies for such facilities to instill discipline in the industry and facilitate the development of more high rise properties.

With challenges in the housing industry which has a deficit of about 100,000 houses a year, high cost of land and inadequate long-term finance; the development of condominiums is seen as a way of addressing the challenges.

Ghana had no common areas and other issues and therefore needed to pass a law to regulate the industry and encourage the formation of property management companies for such facilities and the law would not only instill discipline in the industry, but also facilitate the development of high rise properties.

Mr David K.D. Letsa, Partner of Bentsi- Enchill , Letsa and Ankomah, consultants for projects, identified some of the challenges facing the housing sector as high cost and access of land, lack of transparency in land tenure and multiple sale of landed property, heavy reliance on imported building materials, high cost of building materials, margins of developers, prolonged land title registration process and undeveloped local building materials industry.

He said there was the need for a condominium regulation that would avoid haphazard, uncontrolled developments, unsound engineering, risk to life and property.

It would also encourage developers, assurance of title, adequate maintenance and induce financiers to invest.

Mr. Letsa said the preparation of the bill was a formidable exercise and must be responsive, forward-looking and necessarily complement the reforms currently being undertaken in land administration and use.**

Chief Attorney Also,  George Coppolo, Chief Attorney has indicated that the need for a a Condominium Act.
 The act will spell out legislations that will among others provide for the election from among the unit owners of a board of directors; their tenure, duties, powers, compensation and removal of boards.
 It will also spell out the method of calling meetings of the unit owners, and the percentage, if other than a majority, of unit owners that constitutes a quorum; the qualifications, powers and duties of the officers of the association; the manner of selecting and removing officers and their term and compensation, in addition to issues related to governing the alienation, conveyance, sale, leasing, purchase, ownership, and occupancy of units as are desirable;.
Considering the challenges of of the african property market as well as that of developing economies, there was the need for an Act of Parliament that will ensure adequate regulation should this be a viable alternative to address the woes of the continent's housing deficits.
THE ROLE OF CONDOMINIUMS IN CO-OPERATIVE AND STATE HOUSING POLICIES
In Ghana, efforts by subsequent governments to secure affordable housing estates as well as to institute effective state housing policies have proved futile.
Notable among them are the Affordable Housing Project under the Kufuor -led administration and the controversial STX Korea deal.
However, notwithstanding these, challenges with the Chinese experience and replica experiences in developed economies, there is the need for government to consider this ownership plan.
Ghana, for instance still has a lot to capture in the current landlord and tenants system and explore ways to diversify this system to a more effective condo system.
With its benefits of cost effectiveness, state housing policies can also be diversified and consider ways to adopt such a system to meet the needs of the people.
In terms of co-peratives, this niche in the country remain mostly untapped.
Ghana still remains in a housing crisis, hence the country continues to explore innovative startegies for results.
Cooperative housing projects are a proven form of multitude homeownership. It has many benefits and has been used to meet the high demand of housing for a variety of people in Ghana, according to the ghanainvest.com..
A cooperative housing project is formed when investors jointly decide to own, control or build various housing projects.
A housing cooperative is therefore a legal entity owns real estates consisting of one or more residential buildings;.

The corporation is membership based, with membership granted by way of a share purchase in the cooperative.

  A primary advantage of the housing cooperative is the pooling of the members’ resources so that their buying power is leveraged, thus lowering the cost per member in all the services and products associated with home ownership.

Cooperative can also used to describe a non-share capital co-op model in which fee-paying members obtain the right to occupy a bedroom and share the communal resources of a house that is owned by a cooperative organization.

Such is the case with student cooperatives in some college neighborhoods in the United States. and as practised in Canada, Sweden, India, Germany and Finland.

Coperative housing projects  have seen some successes, but some experts have blamed the high cost of building materials and other factors such as land litigation on inability to perform, but there is still more to gain than lose.
Such investors could therefore explore opportunities that condos present in Ghana's economy in addition to other sectors such as  garden-style housing communities, student apartments, middle class townhouses, single-family homes and senior housing.
With the high demand for quality and affordable housing in Ghana it is destined to be a highly yielding investment.
To blend all facts, there is a need for government, stakeholders and investors to seriously consider the use of condos among other such vital  options, in order to help make the dream of an affordable and comfortable apartment a reality for all persons and not the preserve of only a few.
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