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Buying or Selling Jersey Share Transfer Property
Share transfer property is popular with people who are seeking to invest in a property portfolio and with individuals and couples whether first-time buyer or some way up the Jersey property ladder.
So what is share transfer property? And how Parslows help with the process of selling or buying a share transfer property in Jersey?
Whatever the reason for buying or selling share transfer property, obtaining advice and assistance from experienced friendly, and helpful Jersey residential property lawyers and conveyancers can make all the difference.
Our Jersey share transfer property experts will explain the process and be on hand should you require clarity on any part of the process. Our team of highly experienced residential property lawyers and conveyancers provide an exceptional service for all our clients that is timely, accurate and pragmatic, and handled in an uncomplicated and friendly way.
If you are buying a Jersey share transfer property, or you are looking to sell your current home and require property law advice, contact Parslows, Jersey residential property experts.
What is Jersey share transfer property?
When you buy a flat or unit by share transfer, you purchase shares in a company. The company owns the property and you as a shareholder are given a right to occupy the flat or unit, as the case may be.
What is the difference between share transfer property and flying freehold property?
A key difference between share transfer property and flying freehold in Jersey is the difference in governing laws. Share transfer ownership falls under the Companies (Jersey) Law 1991.
With a share transfer property you hold shares in a company. You do not own the property. With flying freehold you hold a ‘flying freehold interest’. You do own the property. Shares fall within your movable estate not immovable estate.
To purchase a share transfer apartment you enter into a share sale agreement. You do not attend Court. You can also hold shares as an investment in a share transfer property without Control of Housing and Work (Jersey) law 2012 residential qualifications albeit you cannot occupy it.
How do shareholders make decisions?
The Company makes decisions in meetings of the directors and or shareholders.
What role has the Jersey conveyancer in relation to buying your Jersey freehold property?
In basic terms and in no particular order your conveyancer will carry out the following when assisting you on the purchase of a Jersey share transfer property.
- Check title
Parslows Jersey conveyancers will check the title to the Company property. - Review search replies
We will send out search letters to various agencies who may be able to provide information in respect of the property and all rights, either over or for the benefit of the property are adequately set out in the draft contract. - Review the Company books
We will review the Articles of Association of the Company and other relevant statutory records. Our residential property lawyers will inspect the registers to check that these are up to date and accurate. In particular to ensure the seller does actually hold the shares. We will also review the minute book to check that the company is being managed satisfactorily - Review the draft share vending agreement
Parslows Jersey conveyancers will review the share vending agreement to ensure it is suitable for your purchase - Property visit
As soon as possible after the title has been checked and the search letter replies have been reviewed, Parslows Jersey conveyancers will attend on-site. While the company will already have purchased the property, we will carry out a title check in the public registry. This is to ensure that all is in order with the property and that no material issues have been overlooked.
Can I purchase a Jersey share transfer property?
You can purchase share transfer property in Jersey without holding a valid registration card pursuant to the Control of Housing and Work (Jersey) law 2012. However if you do not hold a valid card ownership of the shares would be for investment purposes as you would not be permitted to occupy the unit.
Do I need a survey and valuation before I purchase?
While your bank will request a survey for 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.
Does the conveyancer check the condition of a Jersey share transfer property?
We do not check the physical condition of a Jersey company’s property. This is for a surveyor who will have the professional experience to do so. A conveyancer will check a site to ensure the boundaries of the property correspond with the draft contract and other such legal issues.
Do I have to pay a tax or stamp duty to purchase a Jersey share transfer property?
If you purchase a Jersey share transfer property it will be subject to a Land Transaction Tax. Land Transaction Tax is levied by the Treasurer of the States and is applicable to every share vending contract entered into. First-time buyers may qualify for reduced Jersey Land Transaction Tax. It is payable by the buyer at the time of purchase.
Do I sign a contract to purchase Jersey share transfer property?
Purchasing share transfer property requires you to sign a contract called a share vending agreement. Amongst other matters, the share vending agreement will set out the shares to be sold and the amount the shares are to be sold for. Furthermore, the share vending agreement will contain warranties. These will be given by the vendor in relation to the company, the property, and the unit that you will be occupying. It is common for the share vending agreement to contain a damages clause, which could be used against a party who, after signing, does not proceed with the transaction.
Do I hold shares to prove that I own Jersey share transfer property?
Upon completion of your transaction, the shares will be transferred to your name. If you are borrowing from a bank to purchase it will be a requirement that they physically hold the shares as security until you have repaid the loan.
When do I get keys for the property?
Once the contract has passed and the consideration for the property has been paid over to the seller, you will be able to collect the keys to the property from the estate agent. The estate agent invariably negotiates the exact time at which possession is handed over.
When should I insure the property?
Buildings insurance will be taken out in the name of the Company, so you will not need to do this. You will however be responsible for contents insurance.
Should I make a Will when I buy a Jersey share transfer property?
We would always suggest that you hold a Will to deal with what happens with your property when you pass away. If you do not do this your property will be inherited under the terms of the Wills and Successions (Jersey) Law 1993.
Link to article on buying share transfer property
https://parslowsjersey.com/2021/02/20/residential-property-share-transfer-purchase-jersey/
Funding the purchase of your Jersey share transfer property
How do lawyers assist regarding purchase funding of a Jersey share transfer property?
Parslows conveyancers will advise 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. It will be for your financial advisor to advise and agree on your mortgage funding application.
What do I do about balance of funds/deposit?
In the usual course, the bank will not provide 100% of the mortgage. As such you will be required to make up the difference. This difference will include not only the balance for the purchase but also Land transaction Tax and legal fees.
What does the bank do with the mortgage - do they transfer to me or to you?
The bank will transfer funds direct to Parslows. You will also need to transfer the balance of funds to Parslows prior to the purchase of your Jersey Share transfer property. We will have provided you with a completion statement that sets out the total payments in full.
Do I pay Land transaction tax on my mortgage?
A loan secured against Jersey shares where you own a right of occupancy of a property will attract Land transaction tax. This is in addition to the tax that you will pay to purchase your property. You may qualify for reduced stamp duty if you are a first-time buyer.
Selling Jersey share transfer property
How does the Jersey conveyancer assist when selling your Jersey share transfer property?
In basic terms the following procedure will be followed (in no particular order) by your conveyancer with regard to advising on selling a Jersey share transfer property:
Prepare and draft the share vending agreement: we will send this to the purchaser’s lawyer. They will then check this contract is appropriate for the transaction.
Liaise with the Company Secretary to obtain company documents such as Articles of Association and minutes of meetings. These will be provided to the Purchaser’s lawyer.
- Issues
The purchaser’s lawyer will check the company records, title, attend on-site and review search letter replies from the various Jersey utility companies. Parslows conveyancers will respond to any queries they may have and if necessary liaise with you to resolve such issues.
- Mortgage
We will liaise with the seller’s mortgage lender to ensure that all mortgages and secured charges are settled from the sale monies.
Repayments from the proceeds of sale of your Jersey share transfer property
When do proceeds of sale get transferred?
A sale can occur on any working day. Consideration for the sale should also be paid at that time. The Seller should receive the balance of funds there after depending upon the banking system.
What happens with regard to rates when I sell?
All Jersey share vending agreement contain a clause that apportions rates and other periodic charges.
Who will pay the estate agent when I have sold my share transfer property?
It is standard practice for the Vendor lawyer to pay the estate agent’s fee out of the proceeds of the sale.
Who will reimburse my mortgage when I have sold my property?
Parslows will repay your mortgage provider out of the proceeds of sale.
General information
Do I need to notify Jersey government that I have changed address
You are obliged to file a notification of your change of address. This will be in relation to the Rates (Jersey) Law the Control of Housing and Work (Jersey) Law and also in relation to your driving license if you are moving parish.
Will I be obligated to pay a service charge when I own a Jersey share transfer property?
As you will be owning shares with others in a company that owns a property it is likely that a service charge will be levied. This will be used to pay common costs that are incurred by the Company.
How do the shareholder make decisions about the Company and property?
The Company takes decisions at meetings of directors and or shareholders it can act on their behalf, acquire and alienate property and rights, and litigate.
Do I need to attend Company meetings?
Company meetings are held when decisions need to be made and you will be obligated to abide by any such decision. Therefore it may be important for you to attend meetings so you can have your say.
Will I be obligated to pay a service charge when I own a Jersey share transfer property?
As you will be owning shares with others in a company that owns a property it is likely that a service charge will be levied. This will be used to pay common costs that are incurred by the Company.
