Everything you need to know is included in our Ivory Coast Property Pack
The Ivory Coast's emerging market opportunities and cultural diversity are gaining the interest of foreign real estate investors.
Buying property in this area can be a complex journey though, particularly if you're not a local. There are many potential challenges and surprises to be aware of.
Our group of property buyers and local partners have shared various problems with us. We've listed them all in our Ivory Coast Property Pack.
This article will give you a quick overview of some of the potential pitfalls you could face.
Is it safe or risky to invest in real estate in Ivory Coast?
From a safety perspective, buying property in Ivory Coast can be considered moderately risky, particularly if one is not well-versed in the local real estate climate.
The nation has made strides in stabilizing its political landscape post-2010, yet investors should remain cognizant of the potential for fluctuations that could impact property markets.
For instance, the post-election crisis in 2010-2011 saw significant impacts on the real estate sector, highlighting how swiftly political tensions can alter market conditions.
Scams are a salient concern when it comes to real estate transactions in Ivory Coast.
There are documented cases where buyers have been duped into purchasing lands with disputed ownership or without clear titles. A specific example of such a situation would be the proliferation of 'vente à la barbade' schemes, where a single property is sold to multiple uninformed buyers.
This is more prevalent in areas where land registration is less formalized, emphasizing the need for meticulous legal due diligence.
When discussing pitfalls unique to the Ivory Coast, one must consider the dichotomy between modern legal frameworks and traditional land tenure systems.
The country operates a dual system where land is held both under statutory and customary tenure. Foreign investors often overlook the customary rights held by local communities, leading to disputes post-purchase.
An example of this was seen in the Grand-Bassam area, where some development projects faced pushback from local communities who claimed ancestral rights over the land.
Foreigners face additional hurdles due to linguistic barriers (French being the official language), lack of familiarity with local regulations, and sometimes, discriminatory practices that are not overtly documented but nonetheless exist. It's not unheard of for foreign buyers to encounter inflated prices or to be excluded from certain transactions based on their non-native status.
In terms of costly mistakes, one of the most significant could be failing to adequately verify land titles.
The Ivorian land registry, while improving, still lacks comprehensive digitization and can be marred by inaccuracies. Investing in a property without a verified, indisputable title can lead to costly legal battles or even loss of the property.
Regarding the legal protection offered by Ivorian laws, while there is a structure in place intended to protect buyers, the enforcement of these laws can be inconsistent.
The effectiveness of legal recourse can vary greatly depending on the region and the complexity of the case at hand. Foreign buyers have sometimes found themselves at a disadvantage in legal disputes due to systemic inefficiencies and a lack of robust legal support for non-residents.
In terms of transparency, Ivory Coast's property market has been opaque compared to Western standards.
The Property Rights Index often places Ivory Coast lower in rankings, reflecting issues in reporting, bureaucratic transparency, and public records accessibility. This can make it challenging to obtain reliable information on property values and ownership histories.
Resolving property disputes in Ivory Coast can be a protracted process, with cases dragging on for years in the courts. The legal system is often backlogged, and the judicial process can be influenced by local politics and social standing. This was evident in the land dispute cases in Abidjan's Cocody district, where legal resolutions took years to settle due to the complexities of the overlapping statutory and customary claims.
Due diligence for foreign buyers must be robust.
This includes not only legal verification of the property but also an understanding of local customs and practices. Partnering with a reputable local attorney and notary who specializes in property law is crucial.
Additionally, potential buyers should seek out entities that have a proven track record of facilitating foreign property purchases, to navigate the nuances of the Ivorian real estate market.
The government of Ivory Coast has taken measures to improve the regulation of the real estate sector, such as efforts to digitize land records and streamline property registration processes.
However, the pace of implementation can be slow, and the impact on buyers varies depending on the region and the type of property in question.
Foreigners who have purchased property in Ivory Coast have reported challenges such as encountering unexpected 'informal' fees, difficulty in obtaining reliable property valuations, and navigating the complexities of the land tenure system.
These issues are compounded by the fact that there is no widely accessible platform to address grievances or to seek guidance, which underscores the importance of having local assistance in these matters.
Buying real estate in Ivory Coast can be risky
An increasing number of foreign investors are showing interest in Ivory Coast. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
Potential real estate buying mistakes in Ivory Coast
"Arrêté de Concession Définitive" or ACD
When buying residential property in Ivory Coast, a specific pitfall you should be aware of, especially as a foreigner, is the complexity surrounding the "Arrêté de Concession Définitive" (ACD), which is a critical document in the property acquisition process.
The ACD is unique to Ivory Coast and is essentially the final step in securing land ownership rights.
This document is only issued after all other procedures and payments have been completed, including the "Certificat Foncier," which is the initial land ownership certificate.
The mistake often made, particularly by foreigners, is assuming that once the Certificat Foncier is obtained, the property rights are fully secured. However, without the ACD, your ownership remains vulnerable and not fully recognized by Ivorian law.
The process to obtain an ACD can be lengthy and requires navigating through various bureaucratic layers, which can be quite challenging if you are not familiar with the local administrative processes and the French language.
This pitfall is not widely known outside of Ivory Coast and is often underestimated by foreigners.
It's essential for you to engage with a reputable local lawyer or a property consultant who has experience in dealing with the Ivorian land tenure system. They can guide you through this process, ensuring that all the necessary steps are correctly followed to secure your ACD.
Moreover, you should be aware that the frequency of encountering issues with the ACD can vary depending on the location of the property.
In major cities like Abidjan, the process might be more streamlined due to more frequent transactions and a better understanding of the requirements among local authorities.
However, in smaller towns or rural areas, the process can be more complicated and time-consuming.
The risks related to "Indemnité d'Immobilisation"
A less commonly known but significant pitfall when buying residential property in Ivory Coast, especially for a foreigner, is the complexity around the "Indemnité d'Immobilisation" practice.
This is a unique aspect of Ivorian real estate transactions, particularly relevant in private sales.
The Indemnité d'Immobilisation is essentially a non-refundable deposit paid by the buyer to the seller to 'reserve' the property during the negotiation and paperwork process. This practice is not always formalized through proper legal channels and can lead to misunderstandings or disputes, especially if the property sale does not go through for some reason.
Firstly, if you pay this indemnity without proper legal safeguards, you might lose this money if the deal falls through due to reasons beyond your control.
Secondly, failing to offer this deposit might make sellers less willing to negotiate or take your offer seriously, as it is a widely accepted practice in the local market.
The frequency of issues arising from the Indemnité d'Immobilisation can vary, but it's a more common practice in private, person-to-person property transactions than in those managed by real estate agencies.
To navigate this aspect of property buying in Ivory Coast, you should work closely with a local real estate lawyer or a trusted agent.
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"Vente en Futur Achèvement" or VFA
When purchasing residential property in Ivory Coast, a specific pitfall you need to be aware of, particularly as a foreigner, is the issue of "Vente en Futur Achèvement" (VFA), or sale in future completion.
This is a concept where you purchase property that is yet to be constructed or is under construction.
While this practice is not unique to Ivory Coast, the way it is handled there has certain peculiarities that can lead to complications.
In Ivory Coast, developers and builders often offer properties for sale before they are built, which can seem like an attractive opportunity. However, there is a risk associated with the lack of regulatory oversight and enforcement in the construction sector.
Some developers might not adhere to the promised timelines or building specifications, leading to delays or discrepancies in the final product.
Another aspect of this pitfall is the financial risk.
The payment schedules for VFA properties can be demanding, and there is always a risk that the developer might run into financial difficulties, slowing down or halting construction.
This can be particularly challenging for a foreign buyer who might not be on the ground to monitor progress or might not be familiar with local legal recourse in case of disputes.
The frequency of issues with VFA properties has been notable in rapidly developing areas, where the demand for housing prompts many new construction projects. It's especially prevalent in and around major cities like Abidjan.
"Zones d'Urbanisme Contrôlé" or controlled urbanism zones
An additional, less obvious pitfall in buying residential property in Ivory Coast, especially for foreigners, is the issue of "Zones d'Urbanisme Contrôlé" (ZUC), or Controlled Urbanism Zones.
This is a concept unique to Ivory Coast's urban planning and land management system.
ZUCs are areas designated by the Ivorian government for specific urban development plans. These zones often have stringent regulations and guidelines for construction and land use. The pitfall here is purchasing property in a ZUC without being fully aware of these regulations.
You might find that the land you purchased cannot be developed as you intended, or that there are additional bureaucratic processes and costs involved in obtaining the necessary permits.
This is particularly relevant in cities like Abidjan, where urban expansion is rapid, and the government is actively working to control and direct growth.
In such areas, failure to comply with ZUC regulations can lead to legal issues, fines, or even demolition orders.
The frequency of this issue is higher in rapidly urbanizing areas, where the government is trying to manage growth and infrastructure development actively.
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It's less common in rural or less developed regions.
The potential risk of "Terres Coutumières"
Another specific pitfall you should be aware of when buying residential property in Ivory Coast, particularly as a foreigner, involves the complexities surrounding traditional land ownership, known as "Terres Coutumières".
This refers to land that is traditionally owned and managed by local communities or families, rather than being formally registered with the state.
In Ivory Coast, a significant portion of land, especially outside urban centers, falls under this category.
These lands are governed by customary laws and practices, which can be vastly different from formal legal procedures. The main risk here is purchasing land that is considered to be under customary ownership without properly understanding or respecting these local customs and rights.
One common issue is that the land might be sold by an individual who does not have the full authority or consensus of the community or family to sell it. This can lead to disputes or claims over the land after you have made the purchase.
In some cases, there might be conflicting claims from different family members or community factions.
The frequency of such issues is more common in rural areas or on the outskirts of cities, where traditional land rights are still strongly upheld.
It's less prevalent in urban areas where land is more likely to be formally registered.
"Litiges Fonciers" or land disputes
A particularly nuanced pitfall in buying residential property in Ivory Coast, especially for foreigners, is dealing with "Litiges Fonciers," or land disputes.
This issue is somewhat common in Ivory Coast and can be quite complex due to the overlapping of traditional land ownership rights, informal settlements, and formal legal property rights.
In many cases, the land may have multiple claimants due to a lack of clear land titles, historical allocation of land rights through customary practices, or because of informal settlements that have developed over time.
The risk here is purchasing property that is subject to such disputes, which can lead to legal battles, financial losses, and significant delays in being able to utilize or develop the property.
This issue is particularly prevalent in areas where urban development is rapidly expanding, such as the outskirts of major cities like Abidjan. In these regions, the increasing value of land often leads to conflicts over ownership and rights, especially in areas where formal land titling has not been fully implemented or updated.
To avoid getting entangled in Litiges Fonciers, it's crucial for you to conduct extensive due diligence before making any property purchase.
This includes verifying land titles, checking for any ongoing disputes, and understanding the history of the land's ownership and use. Working with a local real estate lawyer who has expertise in Ivorian property law is essential.
They can help navigate the complexities of the local land tenure system, conduct thorough background checks, and ensure that all legal aspects of the property purchase are sound.
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"Plan d’Occupation des Sols" or land use plan
In Ivory Coast, another specific and often overlooked pitfall in buying residential property, especially for foreigners, is related to the "Plan d’Occupation des Sols" (POS) or Land Use Plan.
This plan dictates the permissible uses of different areas of land, and is crucial for understanding what types of buildings or activities are allowed on a given piece of property.
The pitfall here lies in purchasing property without a clear understanding of the POS regulations that apply to it.
For instance, you might buy a piece of land intending to build a residential property, only to find out later that the area is zoned for agricultural use or is a protected environmental zone where construction is restricted. This issue is particularly relevant in areas undergoing rapid development or ecological conservation.
Such problems are more frequently encountered on the outskirts of major cities like Abidjan, where urban expansion meets rural land, and in areas near national parks or protected environmental zones.
In these places, the POS can be subject to change as urban planning evolves, adding another layer of complexity.
To navigate this pitfall, it's important for you to conduct thorough research into the zoning laws and land use plans of the area where you intend to buy property.
This may involve consultations with local urban planning authorities or hiring a real estate expert well-versed in Ivorian land use regulations.
"Faux Documents Immobiliers" or fake real estate documents
Another specific pitfall to consider when buying residential property in Ivory Coast, particularly as a foreigner, is related to "Faux Documents Immobiliers," or fake real estate documents.
This issue involves the circulation of counterfeit property titles, permits, and other legal documents necessary for property transactions.
The risk here is purchasing property based on falsified documents, which can lead to serious legal complications, loss of investment, or disputes with legitimate property owners. This problem is more prevalent in areas where land ownership records are not well-maintained or easily verifiable, and where informal property transactions are common.
This pitfall is particularly risky for foreigners who may not be familiar with the official appearance of Ivorian property documents or the proper channels for verifying them.
It's also more common in transactions involving private sellers or in areas outside of major cities like Abidjan, where the formal real estate market is less established.
To avoid this, it's essential for you to verify all property documents thoroughly.
This includes checking the authenticity of property titles, permits, and any other legal documents with the relevant Ivorian authorities. Working with a reputable local real estate agent or a lawyer who specializes in Ivorian property law can be invaluable in this process. T
hey can help you navigate the local system, verify documents, and ensure that all aspects of the property transaction are legitimate.
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"Expropriation pour Cause d'Utilité Publique" or expropriation for public utility
An additional and specific challenge in buying residential property in Ivory Coast, particularly for foreigners, is the issue of "Expropriation pour Cause d'Utilité Publique," or expropriation for public utility.
This is a legal process where the government can requisition private property for public use, such as for infrastructure projects, urban development, or environmental conservation.
The pitfall here lies in purchasing property without being aware of potential or planned public projects that might affect it. If a property falls within an area earmarked for future public development, there is a risk that it can be expropriated by the government.
While compensation is typically offered, it may not always align with the market value or the owner's expectations.
This issue is particularly relevant in areas earmarked for major infrastructure projects, urban expansion, or environmental conservation initiatives.
It is more common in rapidly developing regions, particularly around major cities like Abidjan, where the government is actively investing in infrastructure and urban development.
To mitigate this risk, it is crucial for you to conduct thorough due diligence before purchasing any property. This includes consulting with local authorities and urban planning departments to understand any future development plans that might affect the property.
Additionally, working with a local lawyer who specializes in Ivorian property law can provide invaluable assistance in navigating these complexities.
The concept of "Informal Tenure Arrangements"
A unique and often overlooked pitfall in buying residential property in Ivory Coast, especially for foreigners, is related to "Informal Tenure Arrangements," common in both urban and rural settings.
These arrangements refer to situations where property ownership or usage rights are based on traditional or informal agreements rather than formal legal documentation.
In Ivory Coast, particularly in rural areas and some urban outskirts, many properties are held or transferred based on local customs or informal agreements within communities or families. The challenge arises when these informal arrangements are not recognized by the formal legal system.
As a foreigner, if you purchase property under such arrangements, you may find that your legal ownership is not recognized, leading to disputes or challenges in asserting your rights.
This pitfall is particularly prevalent in areas where formal land titling and registration processes have not been fully implemented or are not accessible to local populations.
It's more common in regions outside the major urban centers, like Abidjan, where traditional land ownership practices are still prevalent. To avoid complications arising from informal tenure arrangements, it is crucial for you to conduct extensive due diligence before purchasing property.
This involves verifying the legal status of the property through official channels and ensuring that all property rights have been formalized and are legally recognized.
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