First-time buyer guide to the different types of property ownerships

First-time buyer guide to the different types of property ownerships

In Jersey, apartments can be acquired in one of three ways; Flying Freehold, Share Transfer and, less commonly, Leasehold. So, for first-time buyers, what are the differences in these types of Jersey property?

Flying freehold first-time buyers property

The Jersey flying freehold law allows you to buy the freehold of the apartment by way of a “lot” or share in a property that is the subject of a Declaration of Co-Ownership. The Declaration sets out the rights and obligations of the owners of the shares who, together, form an Association of Co-Owners. The share grants the buyer the ownership of a particular apartment, parking space/s or store, together with a percentage interest in the common parts of the property. A proportion of the expenses incurred in administering and maintaining the common parts, such as the structural and shared areas, is payable by each owner of a share. The Association of Co-Owners decides upon maintenance and other issues by majority vote and contributions to the common expenses are collected by the Association Representative or Managing Agent as a service charge.

Share transfer first-time buyers property

Share transfer purchase means that you are buying a block of shares in a Jersey Company which owns the Jersey Property. As such you are not acquiring freehold property but a share in a company. You acquire the exclusive rights of use and occupation of the apartment and the obligations regarding the common parts through the company’s Articles of Association. Whilst the way in which you acquire the apartment is different, in practice, the shareholder has similar rights to those acquired with a flying freehold apartment. As with flying freehold, the shareholder will have an obligation to contribute towards the common expenses and, again, this is usually collected by way of a regular service charge. A Company Secretary administers the Company’s records and is responsible for convening meetings of the shareholders, who are often also the Directors of the Company, to decide on management and maintenance issues.

Long leasehold first-time buyers property

Long leasehold apartments are quite unusual in Jersey. The original term of the Lease may be for many years but as the term decreases each year so does the value of Lease. The Lease will contain provisions for the maintenance of the apartment and usually for contribution to the maintenance of the common parts of the property. In recent years in Jersey some of the older States owned leasehold apartments have been converted to flying freehold ownership as a point had been reached where the number of years remaining on the lease was too low for a lending Bank to grant a mortgage.

When you agree to buy an apartment, your Parslows lawyer will carry out a legal due diligence on the property, review as applicable, the Association, Company or Leasehold records to ensure that you are fully advised on your rights and responsibilities, financial obligations and that you are appraised of any issues arising. These can be complex transactions involving a lot of paperwork so it is important to choose your lawyer carefully so that you can be sure a thorough job will be done, allowing you to start climbing the property ladder with confidence.

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.

For further advice please contact Parslows on 01534 630530 or click here.