Purchasing freehold property in Jersey25 Feb 2010
When you buy a freehold property in Jersey, you do not sign the contract; instead, it is passed to the Royal Court and you or your attorney will attend court on a Friday afternoon to swear an oath to abide by the terms of the contract. A copy of the contract will be retained in the Public Registry and will constitute evidence of your title to the property, and this enables easy access to it in future should any queries arise in respect of servitudes, boundaries or any other issue. Unlike England, Jersey does not provide a short certificate of registered title, nor is there any system of having to hold title deeds.
Once you have found a property that you would like to buy, it is essential that a Housing Application form is completed and submitted to the Population Minister to confirm your residential qualifications under the Housing Law. More often than not, this application will be completed by the estate agent instructed on the sale of the property. In some circumstances, the consent of the Agricultural Department will also be required, on which we shall advise you and deal with.
The work involved in conveying a property is divided between the seller's lawyer and the buyer's lawyer. It is the responsibility of the seller's lawyer to prepare a draft deed of sale and to provide the buyer's lawyer with the draft deed and a copy of the Jersey Digital Map identifying the property. As part of his researches, the buyer's lawyer must then carry out due diligence to ensure that the seller has a good marketable title, free from the claims of any third parties to the property.
Survey and valuation
It is essential that a survey and, if you are borrowing money to finance the purchase, a valuation of the proposed property, are carried out at the earliest opportunity. Your lender will require that a valuation is carried out to ensure that the property is worth the money you are intending to pay for it. Your lender will provide you with details of surveyors that meet with their approval and you must instruct one of these to undertake the survey and valuation for you.
Once we are in possession of an extract from the Jersey Digital Map from the seller's lawyer, we will carry out the necessary searches with the relevant bodies: Planning and Environment, Transport and Technical Services, Jersey Electricity, Jersey Water, Jersey Gas and the relevant parish. In some instances, searches are also carried out with the Rent Control Tribunal and Health Department.
The reason for undertaking these searches is to reveal all relevant information about the proposed property including anything that may be disadvantageous to it.
We will carry out a title check in the Public Registry. However, a title check will not reveal the existence of certain rights of previous owners' widows or widowers which automatically arise under Jersey law and, therefore, you have to rely on information given to us by previous owners which may not be entirely accurate.
Property is conveyed by description and not by reference to plans and we do not undertake the interpretation of plans at all. We will carry out a site visit at the property to ensure that the description of the property and the rights and obligations of the owner contained in the contract of purchase correspond with the circumstances on the site. We will check whether the original construction and any later extensions have caused encroachments over the boundaries with neighbouring properties, whether there have been infringements of restrictive covenants and whether other property owners have rights over the property which may affect you. We will also ensure that rights of way and for drainage and other services are contained within the contract of purchase to ensure that you will have reasonable enjoyment of the property.
If any discrepancies are found, we will report back to you to discuss these issues and revert to the seller's lawyers to have them rectified. Usually, the seller will bear the costs of rectifying any defects although this may have to be negotiated between the parties.
Funding the purchase
We will enquire as to how you intend to fund the purchase of the property. Most buyers have to obtain a mortgage. You will need to take the necessary steps with your chosen lender to ensure that a survey and valuation are carried out and, once these are accepted, that you return a signed facility letter to your chosen lender, after which they will instruct their lawyers to provide us with the loan documentation so that your finance can be put in place. You may wish to instruct us not to proceed with the transaction until the results of the survey have been received so as not to run up any unnecessary legal costs.
Contact with you
It usually speeds matters up if you supply us with your email address and daytime telephone number at the outset. After we have resolved any issues, we will meet with you to explain the terms of the deed of purchase and ask you to sign any applicable loan documentation.
Passing of the contract
If you so wish, you may attend court in person. Alternatively, you can, by power of attorney, appoint someone else (usually drawn from the senior staff of this firm) to attend on your behalf. Once the contract has passed before the court, you will be able to collect the keys to the property from the estate agent.
If you do wish to attend court personally, you must wear formal attire which for gentlemen includes a shirt, jacket and tie. Failure to dress appropriately may result in the court refusing to pass the contract. The procedure in court is that you should wait until your name is called and then stand up. You will be asked if you understand the contents of the deed (i.e. the contract). You will say "yes" and you will be asked to raise your right hand, and to swear an oath that you will be bound by the terms of the contract and will not act against those terms, to which you will reply "I do". We will attend court with you and provide the necessary guidance.
Stamp duty is a duty levied by the Treasurer of the States and is applicable to every contract which is passed before the court. Stamp duty is payable by the buyer. Stamp duty is calculated by reference to the purchase price and is also payable in respect of any mortgages or loans to be secured against the property.
Wholly residential property is free from Goods and Services Tax. If the property which you are buying does not fall within that category, we will discuss GST with you further; it is payable by the buyer when applicable.
Whilst you become the owner of the property upon swearing the oath in the Royal Court on the Friday afternoon, in reality it is very rare that you will be given immediate vacant possession of the property. It is usual for the parties to arrange a "hand over" of the property during the weekend after contract passes. Possession should be arranged well in advance via the negotiating estate agent and should not be assumed or left to chance. In rare cases, a seller may be unable (or unwilling) to vacate the property during the weekend and special care must be taken when agreeing extended possession periods with regard to issues such as insurance and liability for damage or even destruction of the property during this period; it is not unheard of for a buyer to require the seller to pay some sort of compensation for this period.
If you have agreed to buy contents from the seller, it is essential that these are listed in an inventory and this should be drawn up by the estate agent as soon as possible after the offer has been accepted so that no nasty surprises or last minute price reductions arise on the eve of completion. Both parties should review the inventory to ensure that they are receiving (or selling) all the contents that they understood were part of the deal.
Utilities and insurance
You will need to ensure that all utility accounts are transferred into your name in readiness for the day of completion. It is usual for a buyer to communicate with the seller directly to ensure the smooth transfer of the various services supplied to the property and that no service is unnecessarily disconnected.
It is essential that you are covered by buildings insurance from the time of passing contract and you should provisionally arrange this well in advance and call your insurer to confirm and issue a cover note before the contract is passed. If you are purchasing with the assistance of a mortgage, your lender will require sight of the cover note before releasing funds.
Payment of consideration monies and legal fees
We will need to be in receipt of the monies being provided by you for the purchase, the stamp duty and legal fees and disbursements in cleared funds by the Thursday afternoon prior to completion. This means that you will need to arrange an electronic transfer of these funds from your bank by the Wednesday, usually before noon. The mortgage advance will be forwarded to us directly by the lender, less the lender's legal fees and disbursements. From the total of these monies, we will deduct our fees and disbursements and stamp duty, and forward the consideration monies to the seller's lawyers. In advance of completion, we will provide you with a detailed statement showing you a breakdown of these monies.