NEED to buy or sell Jamaica property… GET experienced personnel!
So you want to buy or sell property in Jamaica! The following guideline is based on interviews with experienced legal practitioners, real estate agents, building contractors including Dwane Forbes of Lightbourne and Hamilton ( over 20-year Practice Manager), and Louise D. Wright, senior sales consultant at D.C. Tavares-Finson real-estate company(owning over 20 years’ experience).
An evaluation, though costly, is always recommended in order to establish the real value of the property. Wright also recommends both vendor (seller) and purchaser (buyer) to explore market prices within neighbourhoods.
Real estate companies in addition to merely marketing properties, also has premiere responsibilities to qualifying the purchaser(s), and advising both parties of needed improvements and procedures before sale.
Wright offers a few tips to steer away from major challenges and possible disasters, even save time and reduce workload.
Use licensed realtors. Additionally, it is imperative to establish a relationship with your realtor. Sellers need to use a licensed realtor at all times, especially one who inspires trust and acts professionally
If it is the intention of the purchaser to secure a mortgage, liaise with an attorney and mortgage officer, she says. On the other hand Forbes recommends parties to choose a lawyer who specialises in conveyance to avoid uncontrollable disasters. He also recommends sourcing surveyor teams with good reputation.
Charles Williams an attorney for over 30 years advises the intended vendor to ensure the house is vacant by the completion of the transaction if not before.
PROCEDURES to buy/sell property in Jamaica:
At the onset of transactions, it is incumbent upon sellers to produce the sales agreement or Agreement For Sale, which outlines terms and conditions. Once agreed upon and accepted, the purchaser pays a minimum deposit of 15% and produces a letter of commitment the purchaser, within 90-120 days.
If tenants live at the property, the sales agreement should say ‘subject to tenancy’. In that case, a notice to vacate, for 30-60 days maximum, should be served. Where the vendor fails to remove any existing encumbrances before title is transferred, it is the vendor’s responsibility, through his attorney, to apply to the relevant authority for removal of any caveat.
Fees (mainly stamp, registration, transfer) are paid to relevant entities by vendor. The vendor solely pays the transfer tax of 7.5% of property price. Both vendor and purchaser share the stamp duty (2.75% of sale/purchase price each) and registration costs (0.25% of sale/purchase price each). The purchaser’s portion can be included in the deposit collected.
Purchasers should a. conduct title searches to ensure that there are no encumbrances or unwanted conditions on the property, b. contract surveyors to identify boundaries.
‘Time is of essence’ clause
Wright warns against the use of the ’time is of essence’ clause to both vendor and purchaser:
If the purchaser fails to fulfill his 120-day obligation where ‘time is of essence’, recourse is available to the vendor. The vendor can rescind the contract with specific conditions in the agreement. The purchaser can lose the deposit.
If the vendor fails to fulfill his 120-day obligation where ‘time is of essence’, the vendor can apply for an extension. Failure to apply for an extension can result in legal action against him/her by the purchaser.
In this case, where the vendor fails, the purchaser can sue for specific performance. The vendor, at his/her discretion, may choose to give a letter of possession with condition. Such conditions may be on a ‘popcorn rental’, for accommodation, for example. Sometimes this is done after a second installment is paid, providing the property is vacant.
It is recommended to rely on the services of an attorney or realtor. However, below is a summary of the responsibilities of both buyer and seller in summary:
- Property appraised and evaluated (VENDOR)
- Probate (in the case of a testate) (VENDOR)
- Advertisement (VENDOR)
- Walk through (PURCHASER)
- Agreement drafted (VENDOR)
- Agreement approved (PURCHASER)
- Mortgage applied, if not a cash sale (PURCHASER)
- Deposit, usually 15 per cent (BUYER TO VENDOR)
- Letter of Commitment (PURCHASER)
- Processing and payment of transfer tax (VENDOR)
- Payment of stamp duty (EQUALLY SPLIT BY BOTH PATIES). Stamp duty is usually 5.5% of the sale/purchase price, and is shared equally between the PURCHASER and VENDOR.
• VENDOR pays 2.75% of sale/purchase price for stamp duty;
• PURCHASER pays 2.75% of sale/purchase price for stamp duty
- Payment of registration costs (EQUALLY SPLIT BY BOTH PATIES) Registration fee is payable at the National Land Agency.
• VENDOR pays 0.25% of the purchase price in registration costs.
• PURCHASER pays 0.25% of the purchase price in registration costs.
- Probate processing at Supreme Court, Stamp Office, Titles Office (VENDOR)
- Title transfer (VENDOR)
- (VENDOR) pays Transfer tax of 7.5% of property price.
- Final walk through to check for new damages, negotiate addendum to contract (BOTH PARTIES)
- Balance paid for title (PURCHASER)
See more on Agreement For Sale on this website