Selling a property in Jersey21 Oct 2010
There are four kinds of property that can be sold in Jersey (two of which are freehold and two of which are share transfer) as follows:
- Freehold: Freehold property is conveyed by means of a contract which is passed before the Royal Court on a Friday afternoon.
- Flying freehold unit: A flying freehold property is a unit of separately transferable property, typically within a multi-unit property such as a block of apartments, which is conveyed by means of a contract passed before the Royal Court on a Friday afternoon.
- All the shares in a property holding company: All the shares in a property holding company are transferred privately at a time arranged between the parties' lawyers.
- Some shares in a company owning share transfer units: A share transfer unit is a unit in a property where a certain number of shares in the company which owns the property confer the right to enjoy that unit, typically in a block of apartments; these are transferred privately at a time arranged between the parties' lawyers.
You should bear in mind the following when you are disposing of any of the above kinds of property.
Consent of the States of Jersey Population Minister is required for the transfer of all properties in Jersey that require a contract to be passed through the Royal Court. If you are selling property through a firm of estate agents, they will normally have applied for such consent before you instruct us. If this is not so, or you are in any doubt about it, please let us know immediately. Please note that, whilst no consent is required in respect of a sale of a property by either share transfer method, consent is still required with regard to the occupation of the property.
Power of attorney
A contract to transfer a freehold property or a flying freehold unit must be passed before the Royal Court on a Friday afternoon. If you do not wish to attend court in person, you may grant a power of attorney in favour of one or more of our partners or senior members of staff who will then attend on your behalf. Please let us know in good time if you wish us to prepare a power of attorney as you will need to sign it before an authorised witness.
You will probably not require a power of attorney to sell a property by either share transfer method as the agreement is merely signed and nothing is passed before the Royal Court.
All contracts passed before the Royal Court have, since 1 November 2006, been drawn up in English but, should there be a dispute about the terms of the contract, the original French will prevail over the English translation. Every endeavour is made to ensure the English contracts are an accurate translation of the previous French deeds. Whilst there is no contract passed before the court for a purchase by either share transfer method, there will have been a contract whereby the holding company acquired the property which was passed before the court.
Payment of sale proceeds
As contracts relating to a freehold property or a flying freehold property are passed before the Royal Court on a Friday afternoon, too late for bank transfers that day, the buyer's lawyer will activate transfer on the Monday of the following week and, due to delays in the banking system, that means that no sale proceeds will reach your bank account until the Tuesday of the following week. Any interest earned on the sale proceeds during this period customarily accrues to the buyer.
Any sale proceeds which arrive in our account too late on the Tuesday for us to remit them to your account the same day will be dealt with the next day.
We will account to you for the sale proceeds, less the legal fees incurred on the sale, and less any relevant disbursements, including fees and stamp duty incurred in the cancellation of any mortgage or other security interest registered against the property.
Share transfer property is sold by private agreement and may happen on any day of the week. The proceeds of sale are usually received by us before completion and held to the seller's order until completion so that they can be remitted by us that same day to your account although they may not reach it until the next day.
Timing of completion
In comparison with other jurisdictions, a property transaction in Jersey does not usually take a long time to complete. However, delays may occur for any of the following reasons:
- Chain reaction: If the transaction is part of a "chain" of transactions where one transfer depends upon a number of others being completed, it is often difficult to arrange a completion date which is convenient to all parties. Unless a written agreement is agreed and signed by all parties, it is not possible for one party to impose a completion date on the others.
- Boundary problems: If a neighbour needs to be party to the contract, or a separate contract (for example: to agree boundaries or accept encroachments), we need to contact the neighbour's lawyer so that he can ask for the neighbour's approval and usually a power of attorney. This may result in delays and additional fees being payable.
- Buyer's mortgage arrangements: If the buyer requires a mortgage, the lender will require satisfactory title, search and survey reports, life assurance and other arrangements. This can frequently result in delays, especially if the buyer's mortgage is not in place at the outset.
- Delayed consents: Some weeks may pass before the buyer's lawyer receives all relevant consents and replies from local authorities. Usually, the buyer will have been advised not to proceed with the purchase until all of these have been received satisfactorily.
- Share transfer property: In order to prepare the share vending agreement, we will need to obtain information about the company which owns the property by carrying out searches on that company at the Jersey Financial Services Commission and by reviewing the statutory records.