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Charge against shares | Residential Property & Conveyancing | Parslows Jersey

When a bank lends you money to buy a share transfer property, how do they protect their investment? They take a Charge by way of a security interest charge against shares.

Charge against shares Jersey property Parslows Jersey

 

Purchasing a share transfer property will in most cases mean that you will borrow money from a bank.  The bank will normally take a charge against shares to protect the money they are lending you.

If your new home is being purchased by way of share transfer and you are borrowing from a bank, then the Bank will take a charge against shares to secure its loan by way of a security interest agreement. They will take this charge against shares, either by requiring that the share certificate is deposited with the Bank or the shares are transferred into the Bank’s name.

Procedure

Once you sign your offer letter from the Bank (sometimes called the facility letter) the Bank will instruct its lawyer to draft the legal documentation. To avoid any hold ups with the purchase completion date, it is important to ensure that you return your signed offer letter back to the Bank as soon as possible.

As soon as we receive the Bank’s security documents we will endeavour to send the documents to you as soon as possible to give you time to read over prior to our meeting. We will of course answer any questions you may have when we meet.

It should also be noted that in addition to the documentation that you will be required to sign, Parslows Jersey will also be required to provide a certificate of title to the Bank.

In essence this document will declare to the Bank that the shares you are buying are suitable for a charge against shares to be registered.

This certificate will require us to confirm that the title to the property is satisfactory, that the relevant consents from the various States departments are in force (e.g. Housing consents), that the various search letter replies are satisfactory and to confirm the good standing of the company and title to the shares.

We are obligated to disclose any material adverse factors affecting the property, the company and the shares.

Payment of Jersey Land Transaction Tax

Please note that a loan with a charge against shares will attract a land transaction tax (LTT). This is in addition to the duty or tax that you will pay to purchase your property. You may qualify for reduced stamp duty if you are a first time buyer.

You will need to provide us with cleared funds for LTT (if any) prior to completion.

Payment of proceeds of loan

Your loan will normally be made available immediately.

Please remember that your loan will not be provided gross. The bank and its lawyer will in most circumstances deduct their fees and charges prior to transfer (unless you have arranged otherwise).

Funds which arrive in our account too late on the day in question to forward them on will be dealt with the next day. We cannot influence the speed of the banking system. In some circumstances this may involve you in having to account for a day’s interest.

 

Lindsey Power | Conveyancing Manager| Residential Property Lawyers

For advice, assistance or further information on buying together in Jersey please do not hesitate to call 630530 or email us on property@parslowsjersey.com or call 630530.


How Parslows Jersey can help

We offer fixed no surprises conveyancing fees.

Whether you’re a first-time buyer, or some way up the Jersey property ladder, our team of conveyancers provide an exceptional service for all our clients that is timely, accurate and pragmatic, and handled in an uncomplicated and friendly way.  We are regularly thanked by our clients for our reasonable rates, our exemplary service, our communication with clients and for ensuring that the whole process runs efficiently. We understand that buying or selling property in Jersey matters.

Parslows conveyancing and property team provide an exceptional service to all our clients. Our clients are pleased with our service and fees; we are confident you will be too.


Please note that the information provided on this website is for general information purposes only and is designed to provide you with an outline of the legal services we offer.  Whilst we endeavour to ensure our information is correct and useful, we make no representations or warranties regarding the accuracy or completeness of the information offered.  Information on our website does not constitute legal advice and Parslows Jersey accepts no liability for any loss or damage arising out of, or in connection with, the information found in this website.  Please consult a lawyer at Parslows Jersey in the event that you require professional assurance that our information, and your interpretation of the same, is correct.
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