So you are planning to move home in Jersey?
What should be your first step? Everyone is different in their approach and indeed how you step onto your path to purchasing a new house will be dictated by how much you can afford.
Mortgage Advisor/Independent Financial Advisor
You may consider that your first point of call should be a mortgage advisor to see how much you can afford. The last thing you would want to do is to find your dream home only to find out that you cannot get the funding to purchase it.
In Jersey there are a number of mortgage advisors who will be able to provide you with an indication of which lender is providing the best rates, explain the different types of mortgage answer any questions you might have and inform you as to how much you will be able to borrow.
However, it is not just about affording the mortgage repayments; there are additional costs to take into consideration such as the cost of the deposit and mortgage as well as estate agents fees, survey fees, legal costs, disbursements, stamp duty, arrangement fees, insurance cover and removal expenses.
It may be worth contacting more than one independent mortgage advisor – they may be able to broker a better deal for you
Your mortgage lender may require that you take out life insurance or other cover. You do not have to buy such cover direct from them. Consider shopping around as your mortgage lender may not be offering the best deal.
Under Jersey Law you will need to prove to the relevant professional dealing with your transaction your identity. It is standard to request proof of your identity and your residence such as an original or certified copy of your full passport or driving licence or any other official document containing your photograph and signature as well as two recent utility bills (no older than 6 months) to provide confirmation of your address. You will also need your Entitled card which is required before you pass contract. Therefore it is prudent to have copies of the documents certified as true copies in advance of meeting your professional advisors.
What types of property are there in Jersey?
The principle of Freehold is that the land on which the property sits is owned by you and everything below and above that plot of land also. This is the traditional method of conveying property in Jersey. Freehold property is conveyed by way of a contract passed before the Royal Court on a Friday afternoon. There are no “title deeds” in Jersey; the proof of ownership is purely a Court record, which is available for inspection by the public.
A transfer of freehold property attracts stamp duty
Flying Freehold Property
Flying freehold describes a method of transfer of property which was established to deal with cases where individual parts of a building were to be conveyed. The building and the land is owned by an Association to which each owner will automatically become a member but allows for each individual flat to be transferred as if it were a freehold property.
As a member of the association you will be responsible to pay a service charge. There will also be rules stating the rights and obligations of each member, including the responsibilities in regard to common areas such as stairways and gardens.
A transfer of flying freehold property attracts stamp duty
Share Transfer Property
A share transfer property is similar to that of a flying freehold. Here the building and land is owned by a company and batches of shares are issued by the company. Each batch of shares then gives the owner the right to occupy, lease or otherwise use a specific flat in the block.
As a shareholder of the company you will be responsible to pay a service charge. There will also be rules stating the rights and obligations of each shareholder, including the responsibilities in regard to common areas such as stairways and gardens.
A transfer of shares in a company may attract a transaction tax
Where do I find property for sale?
There are numerous sources of information available for purchases of existing homes, for example:
Estate agents are of course the traditional place to find property for sale. Jersey has a large selection of estate agents who will be able to provide you with details of any suitable properties and make appointments for you to see them. If you find a property through an agent they will on the vendors behalf negotiate the price with you.
The JEP is the traditional medium for property advertising, especially on Thursday night. Developers, estate agents and private sellers all use this medium to sell property.
The Estate agents all have a presence on the internet. There are also a numerous of other sites such as www.jerseyinsight.co.uk and www.thisisjersey.com which offer dedicated pages for individuals to sell their property privately.
When you are considering buying a home it is a good idea to visit the property at different times of the day to find out for example if the street is noisy at night or whether it is particularly busy at lunchtimes.
Don’t only visit when the sun is shining, if you visit during bad weather you may be able to spot a leaking roof or poorly fitted windows and you can feel the extent of any draft proofing.
Making your offer
There are a number of points to bear in mind when you are ready to make an offer on a property.
Make sure to make any offer subject to contract (meaning that all dealings are subject to the actual exchange of the contract itself). This is especially important when involved in a private sale. While no one can be forced to pass freehold/ flying freehold property in the Royal Court the same is not so with share transfer property. With appropriate supporting evidence it could be possible to force a sale based on an unconditional verbal offer.
We would suggest that you do not sign any preliminary agreement dealing with the purchase of a property or hand over a deposit until you have taken legal advice.
Remember many sellers set a price over what they would be willing to accept. Therefore don’t be afraid to haggle. You can always increase your offer and carry out any price negotiations through the estate agent or developer.
If your offer is accepted, there are a number of parties you will need to inform as soon as possible.
(1) Mortgage Advisor
Consider carefully how you intend to make your offer. There is nothing more destructive to the negotiation process than an adversarial style. The goal is not to reach an impasse in which neither the seller’s nor buyer’s needs are met. Sometimes buyers include a note with their offer explaining why the house is not worth what they are asking, pointing out deficiencies, etc. No one can read a note criticizing their house without a defensive reaction.
You should ensure that you confirm details with your mortgage provider and obtain the offer letter as soon as possible. Thereafter sign and return your offer letter as soon as possible. Contact your mortgage advisor in order that the bank can instruct its lawyers to draw up the necessary paperwork – Remember however that this is an offer in principle and as such is subject to a satisfactory survey and legal report
Instructing a surveyor
If you are purchasing your property with the assistance of a mortgage it will be a requirement of your lender to have a survey carried out on the property you intend to purchase. There are several types of survey that you can have carried out depending on the lenders and indeed your requirements. Even if you do not require a mortgage in most, if not all, circumstances you will want to ensure that the property has been surveyed. You should carefully consider what type of survey should be carried out.
You should be aware that your lender will base any financial offer on the valuation of the property. If your valuation is lower than expected you may find the total amount offered to you decreased.
The types of survey
A lenders valuation is not a survey. It is a minimum requirement which a lender carries out to ensure that the property you are intending to purchase is worth the money they are lending you. Your lender will more then likely provide you with a copy of the mortgage valuation but do note that the lenders valuation is unlikely to provide you with detailed information which would be picked up in a survey
A Homebuyers Report is a “mid priced” survey which, when completed, provides you with sufficient information and would highlight potential problems which could affect your decision to purchase the property. It can also assist you with negotiating a lower price with the points it highlights.
The Homebuyers Report is not as detailed as the Full Structural Survey as it does not provide information on every aspect of the property. Generally it is not suitable for properties that require renovation or if you are planning major alterations.
Full Structural Survey
A Full Structural Survey (also known as a “Building Survey”) is the most detailed and comprehensive type of survey and also the most expensive – but well worth considering. This type of survey is a comprehensive inspection of the property and can be tailored to your specific requirements relating to any particular concerns you may have regarding the property.
The sooner you instruct the surveyor the better – your lender will base any financial offer on the valuation of the property – there is therefore a risk that any offer in principle may be reduced to accommodate a lower valuation
You are responsible for the costs of the surveyors and the banks lawyer for drawing up the paper work
Take note that in Jersey a property is bought as seen – you buy it in the condition in which it is at the time of purchase and claims cannot be made for defects after sale unless these were discovered and agreed prior to purchase
Instructing a lawyer
It is never too early to instruct Parslows with respect to your transaction whether you are buying or selling a property.
The Vendors lawyer will be responsible for drafting sales documents and responding to any queries that may arise as a result of the purchaser’s lawyer enquiries
The Purchaser’s lawyer generally will carry out the following tasks in preparing for you to purchase your property:
1 Review and comment on draft contract of sale from the vendor’s lawyer
2 Check Title and site visit If there are any discrepancies these will be raised with the Vendor’s lawyers and, if necessary, ensure that the defects are rectified prior to completion.
3 Review of the Company records (share transfer only) – If there are any discrepancies these will be raised with the Vendor’s lawyers and, if necessary, ensure that the defects are rectified prior to completion.
4 Searches of Utility companies and other relevant bodies
5 Issue questionnaires on the property (and where applicable the company) to vendors lawyers
6 Advise on the loan documentation regarding the legalities of entering into the documents from the bank and provide appropriate confirmations to the bank
7 Advise you on our findings
If there are any discrepancies these will be raised with the Vendor’s lawyers and other relevant parties and, if necessary, we ensure that the defects are rectified prior to completion.
There may be additional steps depending on your particular transaction. These steps are in no particular order.
Please note that legal due diligence will not include a review of the structure of the house, a review internally or in share transfer cases include a review of the accounts or taxation. We would advise in such circumstances that appropriate experts be appointed.
If you are purchasing a freehold or you will be responsible for building insurance on the day the contract passes before the Royal Court. Building insurance for flying freehold property or share transfer property will be the responsibility of the Association or Company to which you will pay a contribution by way of a service charge. In both cases if you are purchasing with the assistance of a mortgage it will be a requirement of your lender that you have and maintain suitable insurance.
In any event you should be considering the types of insurance that you may need early on so that your property is protected as soon as you become responsible for it.
The basic idea of buildings insurance is to cover your home (the actual bricks and mortar) should it be damaged beyond repair or destroyed; the exact level of cover will vary between insurance companies. It is worthwhile shopping around as there will always be someone offering the same cover for a better price so we recommend you obtain a few quotes. It is vital that you have your policy ready to take effect as soon as you become legally responsible for the property.
Contents insurance covers items that you own within your home such as home entertainment equipment, clothes, jewellery, carpets, furniture etc against a wide range of threats including fire, flood, malicious damage and theft. In some cases the policy will extend to external parts of the property such as your shed, garage, conservatory or greenhouse. Different insurance companies offer varying levels of cover so always read the small print and always shop around to see who will give you best cover.
Life assurance (also known as life insurance) is taken out primarily if you have a mortgage. In the event of your death, life assurance would pay off your outstanding mortgage and ensure your family would not be left in financial difficulty.
Preparing for completion and moving
Set a date
First you need to decide on the date that you can move into your new home. This is particularly important if you have a place to sell and need to co-ordinate a date with the people moving into your existing home. Matching your dates will prevent you from having to pay for two properties. Should you be currently renting, you will need to give your landlord a leaving date.
Review the inventory to ensure you are receiving (or selling) all the contents that you understood were part of the deal so that no nasty surprises or last minute price reductions arise on the eve of completion. This should be drawn up by the Estate Agent. Remeber electrical goods and the like will be by definition second hand and as such you may wish to give them a once over to ensure that they work.
Double check with your broker to ensure that buildings cover will be in place on the day of completion and ensure that the relevant documents have been sent to us as we will need to prove you have insurance cover prior to completion.
Before you move you will need to contact all services – electricity, gas, telephone and water to arrange final bills and reconnection at your new home. It is often easier for a purchaser to communicate with the vendor to ensure the smooth transition of the various services supplied to the property and to guarantee that no service is unnecessarily disconnected.
The balance of monies needed to complete the Freehold/ Flying freehold transaction will be required by Parslows in cleared funds by the Thursday afternoon prior to completion. If share transfer, the balance of monies will be required by usr in cleared funds on the day prior to completion. The mortgage advance should be forwarded to us directly, less the lender’s legal fees and disbursements. From these monies we will deduct our fees, disbursements and stamp duty, and forward the balance of the consideration monies to the vendor’s lawyers. In advance of completion we will provide you with a detailed statement showing you a breakdown of these monies
Book the removers
If you are hiring a removal firm to move your belongings, obtain quotations from a number of firms and make a provisional booking. Some movers will also pack for you, which may be advisable. If you are looking to hire a van and carry out the move yourself, you should also book it early. Make sure that your belongings are insured during transit.
Ordering carpets and furniture
You may wish to measure up for new carpets and curtains; however, unless you are buying a new property you may consider it wise not to commit yourself to ordering until after the completion date in case the purchase falls through.
Completion of transaction
A typical transaction can take some weeks to complete depending on how quickly both parties wish to proceed and on whether any problems arise. In normal circumstances you should be looking at between 4 to 6 weeks from instruction to completion.
You should liaise with us to provide you with a reasonable idea of the completion date.
Freehold/flying freehold sales occur each Friday afternoon when the Royal Court sits to hear and record the transfers of title relating to freehold properties. The vendor and purchaser or their attorneys must be present to acknowledge the transaction.
In the case of share transfer property the transaction can generally complete on any day of the week as there is no attendance required at the Royal Court.
You should normally receive the keys on the day of the transaction. If there is any variation please let us know before completion.
Settlement is usually made the Tuesday following the Royal Court registration via your lawyer.
Share transfer property
Settlement is usually made the day after the transaction completes
You should note that while we will effect transfer on a given day, once in the banking system timings of payments are outside our control.
How Parslows can help
Parslows conveyancing and property team provide an exceptional service to all our clients, whether you are a first time buyer or some way up the property ladder.
Our conveyancers and property lawyers are focused on providing you with expert residential conveyancing advice with a truly personal service.
We advise on all aspects of property law: whether it be advice on private loans, financing, off plan and building contracts or option agreements, landlord and tenant advice or regulatory advice we can assist.
Our clients are pleased with our service and fees, we are confident you will too.
For further information or a fixed fee for your conveyancing work please do not hesitate to email us at email@example.com or call 630530;
The information and opinion expressed in this briefing does not purport to be definitive or comprehensive and are not intended to provide professional advice. For specific advice, please contact Parslows, We are not responsible for, and do not accept any responsibility or liability in connection with, the content of this document or any reliance upon it