Property Acquisition

Victoria Marumo

Hello there and welcome back! If this is your first time interacting with this blog, I strongly advise that you check the first three articles so you can better understand the lap we are on now. Today’s blog will tackle issues surrounding property in business; whether it be for purchase or rent, finance organizations that offer financial support in the form of grants and loans, fraud, and a bunch of other questions you might have on the matter.

Where can I Get Funding?

There are a number of platforms in Botswana available to everyone, especially the youth, and they are ready to offer assistance in the form of money and other resources. These include, but are not limited to;

  • Citizen Entrepreneurial Development Agency (CEDA)
  • Youth Development Fund (YDF)
  • Kgalagadi Brewery Limited (KBL) Kickstart
  • Local Enterprise Authority (LEA)
  • Debswana-PEO
  • Embassies such as the United States Embassy
  • Banks such as the National Development Bank (NDB)

These are not the only organizations that provide funding but are the most popular. They have their different requirements, which differ with each type of business, but all assist accordingly, with terms and conditions set to be extremely favourable to youth-owned businesses and companies. Their services are available on their websites but also have user-friendly staff at their physical premises, across the country.

Property Acquisition

Most small-scale businesses start at the grassroots level, sometimes in the comfort of someone’s bedroom or garage. But other businesses, like retail stores or rental businesses, start big from the jump and it is important to know where to acquire the necessary infrastructure to sustain such a business. Not just that, businesses and companies also require office space and these and more will be discussed here today.

Please note that not all businesses require physical premises, and where viable, some are better off operating on a mobile basis. Adding a purchase loan or rent to your overheads can be financially frustrating. As much as everyone would like a lavish building for their business, they should know that money takes precedence over anything else. Avoid unnecessary costs. But in the event that you own property use it, and where you need to own it, secure it.

To Rent Or To Buy?

To a greater extent, this is entirely dependent on an entrepreneur’s long-term vision for their business as well as the nature of the business. Entrepreneurs must ensure that they do the research and market study required but the future remains uncertain. All the parties involved; buyers, sellers and agents, are equally exposed to the risk of demand & price movements. At the same time, when the prices go up, all the parties reap benefits that could be substantial.

Purchasing commercial property, especially to run your own business is a much more cost-effective decision than taking a property on lease and paying heavy rentals. However, there is no one-size-fits-all kind of strategy in property acquisition. Also, buying commercial real estate is much riskier than buying a residential property. It requires a complete analysis and comparison of all the available options and a study of expected returns on investment.  These investments must be made after completing an in-depth and detailed study of returns against expectations.

  1. Location: A lucrative location today might turn out to be an unwanted destination tomorrow. While the future is unpredictable, it is important to consider what previous businesses that existed prior to yours did in a similar situation before you make your decision. At the same time, it is very important to consider the distance from your business to the end users & suppliers. The business must be accessible to the end user to be successful. Furthermore, connectivity via road, rail or water transport is required to run the business successfully. It is also prudent to take into consideration issues surrounding maintenance costs.
  2. Budget: Any activity, which needs investment, needs a budget plan before execution and the same applies to property acquisition. It is crucial for the investor to lay down the budget allocation towards the property cost. This will also help simplify the selection of commercial property among the available options. For instance, good foresight can inform a manager to, in the absence of the entire amount of investment one, pay just a small down payment and take a mortgage for the remaining amount.
  3. The physical condition of the property: How and for what purpose was the property used before your purchase is important to know. This will give an idea of the wear and tear this property must have gone through and what kind of repairs it might need in the future. Knowing this would help understand the resale value or rent that could be earned in the future.
  4. Availability of support services: These include parking, lift, security, etc.; should be studied carefully while finalizing the commercial real estate. They are not always key in purchasing, but can play a huge role in the success of the business and also contribute to the value of the property when an entrepreneur decides to resell it at a later stage.

Do’s And Don’ts

People get scammed while purchasing property all the time because fraudsters exist in Botswana and are getting smarter with each passing day. Below are tips to help you navigate land purchase in Botswana that can be used for either land or property(buildings, office space etc.). Credits to @Ortiz Johnson @Facebook;

Don’t believe all the marketing adverts from sellers or agents until you have done proper research and verifications to confirm. The more they tell you they have a good track record for sales done properly, the more you should be prepared that you might be the first person where things will go wrong and your money will disappear.

For every piece of land you are interested in, always ask for these documents:

– The Survey Plan

– The deed of Assignment and how the property was transferred from time immemorial to the present-day Seller:

– Copy of the Original receipt the Seller used to purchase the land and from whom he bought it from.

– Copy of either the gazette, C/O or governors’ consent of the land.

Make sure to visit the property personally or send a representative you trust. Never buy a property directly from a property magazine or website without seeing it personally or sending your representative to see it and comment on it.

NB: If a seller suggests he is not ready to release a document because it’s a private document, please walk away. Every landed document is a Public document of record that can be investigated and searched. The more they tell you they can’t release it, the more suspicious you should be and after demanding it strenuously and still being rejected please walk away fast (run)!

Sweet talking by a seller or agent will only put you in more trouble (even if the seller or agent is your brother or sister). If they say that it will take them time before they get the document, you should fast-track the transaction until they get the document because other people are interested in the land, rather than let the deal slip from between your fingers.

Can someone backtrack on a pending land transfer? Should you engage a lawyer?

backtracking on a pending land transfer.

First of all, how are you running your business without legal representation? A lawyer to your business is what oxygen is to your everyday existence. In as much as an entrepreneur is well informed about their business, it is crucial to have a lawyer engaged at all times. There are laws governing land, land rights, purchase, and transfers, and who better to do the negotiating for you than a legal advisor? The beauty of it all is lawyers are available at our disposal whenever we need them from Legal Aid Botswana, especially for some of us who cannot afford to hire private lawyers.

Property/land owners may change their minds at any given time of the deal, due to a number of factors known to them. However, it will not always be without repercussions. This is why it is important to have a lawyer in place at the start of the transaction, to draft a contract that is favourable to you should anything change at a later stage. Also, stay in contact with Land Board Officials at every stage of the transfer.

The process is not as easy as making a payment and swapping ownership for the property/land. This is because a sudden change of mind can have detrimental effects on an entrepreneur’s business plans/strategy. And if a situation arises, never withhold your right to be fully compensated in such instances. Issues of land can get sticky, where other relatives come into the picture, disputing the sale, demanding it back etc. This is why dos and don’ts should be applied to avoid the mess but if an entrepreneur finds themself on a battlefield, only a real estate lawyer can best represent them.

What Is the Difference Between A Land Certificate, Lease and Title Deed?

The three are all legal documentation one must possess to prove ownership. However, a title deed puts an entrepreneur at the advantage of being able to go the extra mile with the land to seek funding and development. This is especially because certain organizations, like CEDA, will only fund land with a proven title deed in place. A land certificate is a document issued by the Land Registry to the proprietor of the land. A land lease is an agreement between the owner of vacant land or property (the landlord or lessor) and an individual or entity who wants to develop or improve the property (the tenant or lessee). It’s also known as a land agreement. In this case, it is your agreement with responsible land boards. A title deed is a legal deed or document constituting evidence of a right, especially to ownership of property. Take note that a land lease is 50 years for business plot land and 99 years for residential plots.


How long Does land Transfer take and how much does it cost?

Land transfer can range between 6 weeks to approximately 3 years. This is because different factors come to play where land rights are concerned. Objections may arise from external parties, court cases, financial constraints, backlog within Land board offices, missing documentation, and scammers to mention a few. It costs P100.00 to transfer land rights from one person to the next and a total of P260.00 to change the land use to your specific plans.

Exciting read? Look out for next week’s post when we discuss Debt. Share your thoughts in the comment section, ask questions and make suggestions of topics you would like discussed on our weekly blog. Cheers!

Miss Victoria Marumo is a journalist with a distinctive and creative voice. Her avid reading complements well with her writing in providing captivating information on business topics.

Writer: Victoria Marumo