Purchasing freehold property in Jersey

What actually is a freehold? The concept of ownership is, in Jersey law, very simple: a person owns land or he does not. The only qualification is the case of joint ownership. The English concept of an “estate in” land plays no part in the Jersey system. The expression “freehold” is sometimes used colloquially, but it is an importation and not a Jersey term of art.

The procedure involved in purchasing freehold property

Review of draft contract of Sale

Parslows Jersey conveyancers will review the description of the property given in the draft contract of sale by the Vendor’s lawyer to ensure that it corresponds with the information provided in the Public Registry. We will check to ensure that all rights, either over or for the benefit of the property are adequately set out in the draft contract of sale.

Checking title

Parslows Jersey conveyancers will check title to the property. This involves the lawyer checking all transactions conducted by the Vendor and his predecessors in title for a minimum period of 40 years.

Title research is now usually conducted online using the PRIDE system. The title to neighbouring properties will also be looked at to ensure that the boundaries they claim towards the property to be purchased and rights set out in those properties’ contracts again correspond with the information set out in the draft contract of sale provided by the vendor’s lawyer. The main aim of such exercise is to ensure that the Vendor has a good, unencumbered marketable title to the property, free from any outstanding claims.

It should be noted that a title check will not reveal the existence of certain rights, such as the rights of widowers or widows. In these circumstances we have to rely on information received from the Vendor’s lawyer.

Searches

We will send out search letters to the various agencies who may be able to provide information in respect of the property. Search letters are commonly sent to Planning, Department of Infrastructure, the relevant parish, Jersey Electricity, Jersey Water and, depending on the property, Jersey Gas, Rent Control Tribunal and Public Health.

It is drawn to your attention that all agencies now put disclaimers on the accuracy of information they provide. The Purchaser’s lawyer is therefore not liable if the information provided to him is incorrect.

Site Visit

As soon as possible after title has been checked and the search letter replies have been reviewed, Parslows Jersey conveyancers will attend on site. The purpose of the site visit is to ensure that the Vendor’s draft sale contract corresponds with the circumstances on site. We will thereafter discuss any defects and or issues with you. In some circumstances, it may be necessary to request that any such defects be dealt with by the Vendor or a neighbour or to obtain defective title insurance cover.

Housing

Purchasing freehold property in Jersey requires that you hold a valid registration card providing entitlement to purchase. If you do not have this card, you should attend the Population Office as soon as possible to obtain it.

Funding

In circumstances where you require a mortgage, your advisor will assist you with the application for a mortgage. If and when your mortgage is approved it is essential that you sign the facility agreement and return to the bank as soon as possible to avoid delays. A satisfactory survey and valuation is likely to be a condition of any loan.

Thereafter, we can advise you on the legal implications of entering into the bank’s security documents, for example what will happen if you do not keep up your mortgage repayments.

Please note that if a balance of funds is to be paid to make up the difference in the price payable for the property you must make sure that it is with us by the Thursday immediately prior to the passing of the contract.

Other issues you need to be aware of when purchasing freehold property…

Survey and valuation

Please take note that while your bank will request a survey and a valuation, this is to ensure that its loan to you is safeguarded. This is not necessarily comprehensive and you should consider carefully the benefit of instructing a surveyor to carry out a full survey. The contract of sale will contain what is called a vices caches clause. This in essence means that all hidden or apparent defects are your responsibility once you have purchased. If you don’t have a survey any defects found after you buy will be your responsibility.

Inventory

If you have agreed to buy contents from the Vendor, it is essential that these are listed in an inventory and this should be drawn up by the estate agent as soon as possible after the offer has been accepted so that no nasty surprises or last-minute price reductions arise on the eve of completion. Both parties should review the inventory to ensure that they are receiving (or selling) all the contents that they understood were part of the deal.

Stamp duty

Stamp duty is a duty levied by the Treasurer of the States and is applicable to every contract which is passed before the Court. Stamp duty is payable by the buyer. Stamp duty is calculated by reference to the purchase price and is also payable in respect of any mortgages or loans to be secured against the property.

GST

Wholly residential property is free from Goods and Services Tax. If the property which you are buying does not fall within that category, we will discuss GST with you further; it is payable by the buyer when applicable.

Utilities and insurance

You will need to ensure that all utility accounts are transferred into your name in readiness for the day of completion. It is usual for a buyer to communicate with the Vendor directly to ensure the smooth transfer of the various services supplied to the property and that no service is unnecessarily disconnected. It is essential that you are covered by buildings insurance from the time of passing contract and you should provisionally arrange this well in advance, and call your insurer to confirm and issue a cover note before the contract is passed. If you are purchasing with the assistance of a mortgage, your lender will require sight of the cover note before releasing funds.

Apportionments

Your contract of sale will provide for the apportioning of the parish rates and other periodic payments between the vendor and purchaser.

The big day … Purchasing freehold property

Passing of the contract

Once we have completed our review of the property, met with you and returned the loan documentation, you should be ready to purchase your new property.

Purchasing freehold property does not require you to sign a contract; instead, it is passed in the Royal Court and you or your attorney will attend Court on a Friday afternoon to swear an Oath to abide by the terms of the contract.

Attendance in court

If you so wish, you may attend Court in person. Alternatively, you can, by power of attorney, appoint someone else to attend on your behalf for purchasing freehold property. If you attend court you must wear formal attire. Failure to dress appropriately may result in the Court refusing to pass the contract. The procedure in Court is that you should wait until your name is called and then stand up. You will be asked if you understand the contents of the deed (i.e. the contract). You will be asked to raise your right hand, and to swear an Oath that you will be bound by the terms of the contract and will not act against those terms.

Once the contract has passed before the Court, you will be handed the keys to the property by your conveyancer. A copy of the contract will be retained in the Public Registry and will constitute evidence of your title to the property.