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INVESTING IN PROPERTY IN BOTSWANA

Botswana gained independence from Britain in 1966, having previously been a British 
Protectorate, without any form of revolt or civil strife. Independence was negotiated 
and in the 39 years since independence, Botswana has been recognised and praised 
as a stable and model democracy. 
 
In addition, Botswana has an open economy. Botswana obtained its first international 
credit rating in early 2001. It was awarded ratings of “A2” and “Single A” by Moodys 
and Standard and Poor’s respectively. Both awards were maintained throughout 2002, 
2003 and 2004. These ratings are the highest awarded to any country in Africa. 
 
The 2004 World Competitiveness Report rated Botswana as the most competitive 
country in Africa and the most recent Report released at the recent World Economic 
Forum (May 2004) ranked Botswana the most competitive in Africa and the 26th most 
competitive country in the world. 
 
Botswana covers an area of 582 000 sq km. Of a population of 1.68 million, 52% live 
in urban areas concentrated along the eastern side of Botswana along the line of rail 
south to north. 
 
With a relatively small population, there remain vast tracts of land which are completely 
unexploited both peri-urban and rural. 
 
Prior to Independence the land tenure system in Botswana was very similar to that in 
neighbouring states. However, after Independence, the system was substantially 
modified by statute and now a distinct system of land tenure and ownership exists as 
regards land in urban areas, land in tribal areas and agricultural land. 
 
During the early 1970's the Government of Botswana enacted the State Land Act in 
terms of which it was decreed that all land not privately owned in terms of the titles 
registered in the Deeds Registry would be dealt with as state land. After the Act was 
introduced, the state divided up the various urban areas into extensions for industrial, 
commercial and residential purposes. 
 
All extensions in townships and urban areas are delineated in general plans reflecting 
the co-ordinates and areas of each individual plot of land and the general plans are 
filed at the Deeds Registry in Gaborone. 
 
Tribal land is under the control of the various land boards and they have, subject to 
approval by the Ministry of Local Government and Lands, rights of allocation to citizens 
and non-citizens. 
 
Agricultural land is subject to control under the Land Control Act and there are 
restrictions on non-citizens owning agricultural land. 
 
 
A brief account of the salient features of each form of tenure follows: 
 
 

URBAN AREAS 

 
FREEHOLD LAND 
 
Freehold land is held in perpetuity under a deed of transfer and the owner is free to 
sell, lease and mortgage the property to citizens and non-citizens without any 
restriction. No time limit is set on this kind of title. However save for purchasing such 
land from existing owners, it is no longer possible to obtain freehold title of land 
presently belonging to the state as land held by the state is allocated in terms of Deeds 
of Fixed Period State Grant. 
 
DEED OF STATE GRANT 
 
After the enactment of the State Land Act, Deeds of State Grant were issued in terms 
of which the holder of the Deed to all intents and purposes became the full owner in 
perpetuity of the property. The holders of Deeds of State Grant are also free to sell, 
lease or mortgage their properties to citizens or non-citizens and there is no time limit 
to this kind of title. Towards the end of the 1970's the issuing of Deeds of State Grant 
was discontinued and it does not appear that any further Deeds of State Grant will be 
issued. 
 
DEED OF FIXED PERIOD STATE GRANT 
 
Where plots of land in urban areas are surveyed, Deeds of Fixed Period State Grant 
are issued in terms of which absolute rights of disposal over the relevant property are 
granted by the State, subject to compliance with the development covenant in the 
Deed during the period of the Grant, which may be for 50 or 99 years. 
 
Until the development covenant is complied with, the holder of the Deed may lease or 
mortgage the property but he is not permitted to transfer it except to the State. The 
development covenant usually requires a building up to a specified value to be 
completed within a period of two years following the registration of the Deed. 
 
On the specified development being completed, a certificate of compliance is issued by 
the Department of Surveys and Lands. On the certificate of compliance being issued 
the holder of the Deed is at liberty to sell. 
 
If the holder fails to comply with the development covenant, he is obliged to offer the 
property back to the government at 80% of the original purchase price. 
 
Each Deed of Fixed Period State Grant specifies that on the period of the Grant 
expiring, the property will revert to State without any compensation being paid therefor 
whether in respect of improvements thereon or otherwise. 
 
REGISTERED LEASES 
 
In terms of the Deeds Registry Act of Botswana, any registered lease over land, 
capable of running for 10 years or more is regarded as immovable property. Mortgages can therefore be registered against such leases. It is unusual for property 
in urban areas to be leased for lengthy periods but incidents of such leases do exist. 
However, there being no restrictions on the sale of land in urban areas, it is 
recommended that an outright purchase be preferred to a lease. If only a portion of the 
land is to be leased under a long-term lease, then a diagram preferably approved by 
the Director of Surveys and Mapping must be prepared. Such a lease is not granted 
by the State but may be granted to a citizen or a non-citizen by the owner of the land 
held under a Deed of Grant, a Deed of Fixed Period State Grant or a Deed of Transfer. 
The holder of the registered lease may sublet the land or register a mortgage bond 
against such lease provided the lease is registered. 
 
SELF HELP HOUSING AGENCY 
 
In order to assist the lower income groups to obtain houses the Self Help Housing 
Agency (SHHA) in each town in Botswana allocates portions of land averaging 
approximately 400 square metres to citizens. Such land is not subject to title deeds 
registered at the Deeds office and is held in terms of certificates of rights. The owner 
is, with the consent of the relevant township authority, at liberty to sell, lease or 
otherwise alienate such property. However a mortgage bond cannot be taken over 
such property as it is not subject to any formal diagrams. Machinery does however 
exist for the converting of certificates of rights to Deeds of Fixed Period State Grant on 
the property being properly surveyed and being connected to the basic water, 
electricity and sewerage services. At present the cost of such services is approximately 
P2000.00. Once the site has been surveyed and serviced, the occupier is entitled, on 
application to the Attorney General's department to have the certificate of rights 
converted to a Deed of Fixed Period State Grant. 
 
 
 
RURAL AREAS 
 
All land in rural areas, with the exception of land owned in freehold title under a 
registered title deed, is owned by the government of Botswana through the various 
land boards. Each land board has a specific area of jurisdiction and subject to the 
approval of the Ministry of Local Government and Lands has rights to allocate land to 
citizens and non-citizens. 
 
CUSTOMARY GRANTS
 
This form of grant is available only to citizens and is made by the land board to citizens 
only for a period of up to 50 years. The rights under Customary Grants are not 
transferable and property held under a Customary Grant is not capable of being 
encumbered. However, on application being made to the Land Board and subject to a 
survey of the property having being conducted and a diagram in respect thereof having 
been approved by the Director of Surveys and Mapping, a Customary Grant may be 
converted to a Common Law Grant of lease. 
 
AGREEMENTS OF GRANT OF LEASE 
 
Common Law Grants of lease are referred to as agreements of grant of lease and are 
made by the land board with the specific consent of the Minister of Local Government 
and Lands. Such a grant is not valid without the Minister's consent. Such leases are 
granted for periods of anything between 15 to 99 years and once they are registered in 
the Deeds Registry, mortgage bonds may be registered in order to secure loans. 
However it is absolutely essential that the lending institutions ensure and satisfy themselves that the lease has been duly registered. The mere fact of holding such a 
lease does not entitle the holder to procure the registration of a mortgage as the lease 
must first be registered. In order for the lease to be registered, the leased area must 
be surveyed by a registered surveyor and the diagram approved by the Director of 
Surveys and Mapping. Even thereafter there are several problems to overcome in that 
most leases are not drafted in terms of the requirements of the Registrar of Deeds and 
need extensive amendments. The exercise of procuring the registration of a lease is 
therefore a lengthy one and care must be taken by the financial institution to ensure 
that all documentation is in order before any advances are made to the Lessee. 
 
 
AGRICULTURAL LAND 
 
Agricultural land in Botswana is usually held under Deeds of Transfer and is freehold 
land. However in areas adjoining urban areas, long leases over portions of agricultural 
land are often granted by the Lessor and such leases may be mortgaged. 
 
Agricultural land may not be sold or leased to a non-citizen or a company in which less 
than 51% shares are held by non-citizens except with the consent of the Minister of 
Local Government and Lands. 
 
SECURITIES 
 
 
The only tangible security over immovable property would be a mortgage bond. 
 
The rights capable of being mortgaged are as follows: 
 
 Rights under a Title Deed to freehold land. 
 
 Rights under a Deed of State Grant. 
 
 Rights under a Deed of Fixed Period State Grant 
 
 Rights under a Registered Lease for more than 10 years. 
 
Rights under Registered Agreements of Grant of Lease in rural areas. 
 
 
 
SECTIONAL TITLES 
 
The Sectional Titles Act, No. 7 of 1999 (“the Act”) has introduced a new form of 
ownership of real rights in immovable property in Botswana. Real rights in a portion of 
a building, combined with a type of co-ownership (undivided shares) of the land on 
which the building is built and the common areas of the building. 
 
Sectional ownership may be increasingly used, due to the growing shortages of land in 
the cities and the fact that it can be suitable for residential, industrial or commercial 
fields. Sectional ownership also more efficiently utilises the available land resources. 
 
Although the Sectional Titles Act was enacted in 1999, the Regulations are still to be 
promulgated. The Act provides for a number of matters to be prescribed by Regulation, 
but the unique forms of land tenure in Botswana have created difficulties in prescribing 
Regulations. It is, however, believed that promulgation of the Regulations is imminent. 

03 Apr 2014
Author http://www.armstrongs.bw/uploads/Property%20Review.pdf
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