Jersey conveyancing - lessons from lockdown
29 June 2020
Bedell Cristin's Jeff O'Boyle, Partner and Head of Property in Jersey, offers his view on how revised conveyancing procedures could be a big part of how the island builds back better.
The restrictions placed on buyers, sellers and tenants during the Covid-19 pandemic inevitably disrupted the local property market. With a little adaptation, some timely intervention from Government and sensible social distancing, the Jersey property market found a way to continue during lockdown.
However, as we transition into the 'new normal' some local practitioners are asking whether the lessons learned from lockdown should be a catalyst for wider reform of our conveyancing process.
Conveyancing Court - the current process
Sellers and buyers (or their attorneys) can conclude immoveable property contracts in Jersey only by appearing before the Royal Court on a Friday afternoon. Clearly, social distancing could not easily be observed in a crowded courtroom.
Therefore, during lockdown, all parties have been represented by an attorney from a law firm to ensure that contracts could be concluded whilst observing social distancing.
Whilst this solution was workable, it led to further administration and some delays as, on every transaction, powers of attorney had to be drafted, signed and witnessed (often by video call) before being registered at the Public Registry.
As noted above, in Jersey property contracts must be passed before the Royal Court on a Friday afternoon. In Guernsey, there is more flexibility as deals can be concluded on a Tuesday and Thursday. Of course, in the UK property deals can be concluded at any time without the need to appear at court - a situation that is envied by many local practitioners.
The rush to pass property contracts on a Friday can be stressful for everyone involved and the consequences of missing the court deadline can be serious. At the very least, a delay means that the sellers, buyers and tenants face another week of uncertainty and disruption. Removal firms must be stood down, boxes unpacked and alternative arrangements made. In a chain of residential sales, the inconvenience is amplified all the way down the chain.
Whilst there is much to admire in the great traditions of the Jersey conveyancing process and the theatre of concluding contracts before the splendour of the Royal Court, some local professionals are asking whether it may be time to look again at reforming the process.
What are some of the options for reform?
Abolition of the Conveyancing Court
The most radical option would be to abolish conveyancing court and give all parties the flexibility to conclude sales, purchases and contract leases at any time by signing a contract before a local lawyer. This option was recommended by the Jersey Law Commission in 2003 and is favoured by many local lawyers, particularly lawyers who have practised in the UK.
Add an additional court hearing
A more nuanced option would be to move to a system that is already used in Guernsey: contracts could be concluded on two weekdays (perhaps Tuesday and Thursday) to offer some additional flexibility and reduce the disruption caused by missing a court date.
In Jersey, sellers and buyers remain at risk of a transaction not proceeding right up until the moment that a contract has been passed at court. This means that buyers could incur substantial professional fees before being 'gazumped' late in the day.
Whilst pre-sale agreements are not commonly used in residential transactions, they can be utilised as a helpful means of encouraging both parties not to pull out of a contractual bargain. This can be achieved by imposing a financial penalty for pulling out (for example, 10% of the sale price).
The Jersey property market adapted incredibly well during lockdown and proved how agile it can be in challenging circumstances. Perhaps, in the 'new normal' we can build upon that experience and consider whether our system of working could be further adapted to streamline the conveyancing process for clients, professionals and the court.
Author - Jeff O'Boyle, Partner and Head of Property.
This article was first published on Business Brief, July 2020.