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If there’s one thing SA investors need to know about buying property in Mozambique, it’s the fact that there is no such thing as a “99-year lease” in that country.
So says Jonathan Lunenburg, who recently acquired the Chas Everitt International Notebook licence for Inhambane, and notes that this misconception has caused SA buyers keen to buy property in Mozambique much trouble in the past.
There are actually three types of property ownership in Mozambique, he says, the first being the “real registered right” (title deed) that applies to all new developments in tourism-designated areas and is ownership in perpetuity.
These developments – whether for timeshare, fractional ownership or holiday homes – are all subject to the Periodic Housing Decree, which requires the developer to meet a string of requirements to do with land use and zoning, environmental assessment, development plans and construction standards, the availability of services and financial guarantees before he can obtain certification for the development.
What is more, the decree makes it illegal for anyone to promote, market or sell any such development or part of a development unless it has been properly certified.
“So the bottom line for South African and other investors is that if you are offered property in a new development in Mozambique and the developer cannot produce his certificate for the project in terms of the Periodic Housing Decree, he is breaking the law, and more importantly, you should not even consider buying there,” says Lunenburg.
As for existing or pre-owned property, there are two types of “land tenure”, says Lunenburg, who amassed many years of experience in international financing and property development before establishing himself in Inhambane.
“In rural areas you can have tenure of the land by ‘right of use’ (which is 45 years plus 45 years renewable), in terms of which any structure that is built on the land remains yours.
“And in municipal areas, you get tenure of the land by way of a ‘certificate of usage’ (in perpetuity), in terms of which you not only own any structures built on the land but register your ownership.”
He says that in both these instances, the legal holder of tenure – which could be a lodge or a hotel – will have a document known as an Alvare. But this document does not give the holder any kind of permission to sell any structures built or to be built on the land, such as timeshare units or holiday chalets.
“Quite simply, there are no exceptions to the rule that holiday developments have to be certified in terms of the Periodic Housing Decree, and if potential buyers remember this they will not be at risk.”
As for good reasons to invest in Mozambique, Lunenburg says these include the fact that the country has the second-highest economic growth rate in Southern Africa.
“Billions of dollars are being spent ungrading infrastructure while the demand for housing is rising.”
In Inhambane, an area boasting miles of unspoilt beach, warm seas, lots of pubs and restaurants, good medical and banking facilities as well as an international airport with a direct flight to Joburg, the focus is on tourism and is likely to remain so.