For many the purchase or sale of a house is a daunting (and potentially stressful) experience even if they have bought and sold before. Few travelling down this path will have much knowledge of what is involved. The intention of the residential section of this web-site as a whole is to try to take as much stress as possible out of the business of buying and selling one’s home. In this particular section we aim to set out answers to many of those questions which are frequently asked in respect of the more practical issues of moving home, in a manner which we hope will enable you to quickly find the information which you need to assist you to achieve as smooth and stress free a move as possible.
For a full explanation as to how the local conveyancing system works please refer to our various residential property guides.
Index
1. What should be the first step towards buying my house?
2. Do I need an estate agent to sell my house?
3. What other practical steps should I take before looking for a house?
4. I have agreed to buy or sell - what should I do now?
5. How long will it take to complete?
6. What steps can be taken to secure my sale or purchase?
7. What is a preliminary agreement and when should I sign one?
8. Should a purchaser pay a deposit and if so to whom?
9. Should a purchaser sign an ’option agreement’ to secure a house on a new development?
10. Do I need a surveyor?
11. Do I need any other professionals?
12. There are some contents included in the sale - are there any things I need to consider?
13. How will the property be purchased and do I need to make a will?
14. What should I do to ensure that my lawyer has all the funds he needs to complete my purchase on time?
15. What other things do I need to do to ensure that I move house on time?
16. When can I move in?
17. When will I receive the keys?
18. What is required of me if my purchase is to complete before the Royal Court?
19. When will the purchaser become the owner?
20. If I have completed the sale of my house when will the proceeds be paid to me?
21. Will I have to pay tax on any profit I make when I sell my house?
22. Am I liable to pay all parish rates for my house if I sell it during the year?
23. Do any special rules apply if I am selling a house I have just inherited under a will?
24. Do I need to keep my deeds safe?
25. What can I do to ensure my transaction completes smoothly and quickly?
1. What should be my first step towards buying or selling my house?
The Potential Players: Perhaps one of the most striking aspects of moving home is the sheer number of people you have to deal with and co-ordinate to ensure that your move actually happens. There are lawyers, mortgage brokers, banks and other lending institutions, estate agents, valuers, surveyors, removal companies, insurance companies, utility companies, the post office, and possibly architects and tradesmen. The list can be added to, but who should you speak to first?
Appoint your lawyers first: On the basis that whether you are looking to sell or buy or both, what you will fundamentally be doing is entering into a legal contract, and one which at times can be quite complex, we would strongly suggest that the first person you should seek to appoint to head up your own personal transaction team is your legal adviser.
There are certainly those transactions where the provision of good legal advice at the outset can save much time, money and potential misery.
It is possible that you are aware of recent works or other circumstances in respect of the property you seek to purchase, which your lawyer might not become aware of for another week or two. If you pass such information to your lawyer as soon as possible your lawyer might well be able to obtain copies of plans and planning permits much earlier in the course of the transaction than would otherwise be the case with the result that he might be able to take any remedial steps that might be required far earlier in the course of the transaction, thereby avoiding irritating delays later in the course of the transaction.
You need a lawyer: If you are purchasing or selling a property it is virtually impossible, given the nature of the local conveyancing system to complete the sale or purchase without appointing a locally qualified lawyer to act for you.
Money Laundering: During 2008 local lawyers will be required to carry out certain checks to verify the identity of all their clients to comply with the requirements of Money Laundering legislation. Although the process should be relatively straightforward your lawyer will not be able to complete your transaction until these requirements have been fulfilled, so there is sense in appointing your lawyer as soon as possible and dealing with this requirement at an early stage. (See new ’Know Your Client’ rules.)
Residential Qualifications: If you have not purchased or taken a lease of residential property in the island before, you will need to establish your residential qualifications with the Housing Department, even if you were born in the island. Your lawyer will be able to assist you in making the necessary application which again is best dealt with sooner rather than later.
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2. Do I need an estate agent to sell my house?
Valuation advice: There is nothing preventing you selling your house privately and without using an estate agent. Agents usually charge about 1% to 1.5% of the sale price for negotiating your sale, although some will produce just a valuation for you for far less and sometimes without charge. This can be a small price to pay if it enables you to establish the correct price to ask for your property. In a rapidly rising market it is not difficult to under-sell your property by tens of thousands of pounds. Equally it can be costly to rely on your own valuation if it is too high with the result that your property is left sitting on the market unsold for too long.
Terms of appointment: There are numerous forms of contract appointing estate agents, and far too many to comment upon here. Always insist on being provided with a written form of appointment setting out the terms upon which your agent is retained and remunerated and contact your lawyer to discuss the terms of that contract if you have any concerns as to its terms or do not understand anything contained in it.
Commission disputes: Understanding the nature of your contract with your estate agent is essential and can avoid costly disputes as to who is entitled to be paid a commission for selling your house. It is possible to get into a situation where you end up paying two agents in full for selling your house. An early consultation with your lawyer might well help you avoid getting into such a costly predicament.
The value of a good agent: As with the appointment of your lawyer the appointment of an estate agent to sell your house is an important element in the sale of your house. A good agent will facilitate the sale by setting the price at the right level so that it is sold as quickly as possible but not under-sold. All in all a good agent can provide invaluable advice and help your move run smoothly.
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3. What other practical steps should I take before looking for a house?
Fees & Budgets: You will need to work out your budget. Your bank or mortgage adviser will be able to give you an indication of the price range which you are able to afford. Your lawyer should be able to assist by providing you with an indication of the likely cost of legal fees, stamp duty and search fees. A guide or check-list as to what that indication or quote should include is to be found. A definitive quotation cannot be given until the full details of the transaction (and in particular the price and type of property) are known.
Check List for the ideal home: You might have particular ideas as to the preferred location for your new home. You might be inclined to buy a flat as opposed to a house. You will almost certainly have a strong idea as to the number of bedrooms you want and as to whether or not you want a garden. Garaging and parking can also be important factors.
Draw up a list of what you are looking for so that when you come to view a property you have a ready check-list to comfort you that the property does not lack any features which you find essential or has features which you wish to avoid. In a tight market with much demand for property you can find yourself having to make a decision to purchase almost on the spur of the moment and having a good check-list to fall back on can be invaluable. The list also might be of value to agents who are looking for properties for you.
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4. I have agreed to buy or sell - what should I do now?
Transaction Details for your Lawyer: If you have found the house you are looking for it is obviously highly desirable to secure it as soon as possible. Your first call after you have agreed to buy or sell should be to your lawyer to advise him of the basic terms of the transaction and the anticipated time scale. It will help your lawyer if you can in addition to the price and address of the property provide the correct name of the sellers or the purchasers and the name of their lawyer.
You should at this stage advise your lawyer as to any particular concerns you might have with a property you are hoping to purchase. It might be that you want to be able to operate a business from your property. Many properties in the island have restrictions against operating businesses from them in the title deeds. Obviously it will be a waste of your time and money to find that there is such a restriction (or one restricting the keeping of certain animals and other restrictions) affecting the property so that you have to withdraw from the transaction just before the scheduled completion.
If you provide your lawyer with the basic transaction details he should in the majority of cases be able very soon after your call to obtain a copy of the sellers’ deed of purchase and ascertain whether there are any restrictions which might make the property unsuitable for you.
Neighbours: If you are purchasing and there are any issues or concerns with neighbouring properties it is best to raise them with your lawyer right at the outset. It is not possible with our local conveyancing checks to identify potentially ’bad neighbours’ but if anything does cause you to believe there might be an issue discuss the matter with your lawyer. If appropriate questions are made of the sellers via their lawyers it is possible that relevant information might be ’flushed out’ or failing that if deliberately false or misleading answers are provided a cause of action might be sustainable against the sellers subsequent to completion if significant issues become apparent.
Proposed Alterations: In addition it might be that you are proposing to extend or otherwise alter the property you purchase. Again there might be restrictions or boundary issues which will prevent this so it is sensible to discuss this with your lawyer at the very outset.
Firm up on your Lawyer’s Quote: Your lawyer should also be able at this stage to provide you with a firm fee quote and details of the stamp duty and all other likely costs to be incurred in connection with the conveyancing process. Best practice is to do this by providing you with a draft of the final statement you will be provided with subsequent to completion which will provide full details of all fees stamp duty and other expenses payable. A guide or check-list as to what that indication or quote should include is to be found, click here to review our fee guide.
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5. How long will it take to complete?
Rules of Thumb: This is an issue which you should discuss with your lawyer as soon as you have agreed to buy or sell and the terms of the transaction are that much clearer. If there is a chain of property transactions linked with your purchase it can be quite difficult to guesstimate the time it will take to complete. If you are purchasing from someone who is not buying anything else and you have nothing to sell completion in three to four weeks is possible. If you and others in the chain have properties to sell then completion in four to six weeks tends to be the norm although if there are problems with any one property in the chain things can take much, much longer. Try to work to sensible timescales. Setting up a transaction with proposed sales and purchases completing within a fortnight is unrealistic and will only cause all involved in the transactions unnecessary stress and difficulties with organizing removals and the transfer of utilities.
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6. What steps can be taken to secure my sale or purchase?
A fast conveyancing process: The Jersey conveyancing process tends to be far faster than that in many other jurisdictions. The norm is for the lawyer and all others in the transaction to carry out all the due diligence which is required as quickly as possible in anticipation of the transaction being completed just as soon as all such due diligence and checks have been completed. It is only when all those checks and due diligence have been completed that the purchaser’s lawyer can advise you that it is in order to complete the purchase. By the time this happens in most cases the transaction goes straight to completion.
Exchange: As a result in many local transactions the intermediate stage of ’exchange’ known to the UK and many other systems is frequently avoided. That having been said if there is a delay of much more than four to six weeks before the anticipated completion date it is sensible discussing with your lawyer whether it would be possible to enter into a preliminary agreement to purchase or sell the property, so that there is some agreement in place ’binding’ the parties to complete, as soon as possible before the actual anticipated completion date.
Gazzumping: In a market where the number of properties coming onto the market is less than the demand ’gazzumping’ is a real threat and if you are purchasing protecting your prospective purchase by entering into a preliminary agreement (even if it is subject to some conditions) as soon as possible is usually the best form of safeguarding your interests.
It might also be the case that the seller is keen that you commit to the proposed transaction as soon as possible and is pushing you to sign a preliminary agreement committing the purchaser to purchase the property.
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7. What is a preliminary agreement and when should I sign one?
"Promesse a heritage ne vaut": It is a fundamental principle of Jersey law (known as "promesse a heritage ne vaut") that parties to an agreement to buy and sell land cannot be compelled by a court order to fulfil their promise to the extent of being ordered to pass a contract of conveyance before the Royal Court. That is the rule at least in respect of landed property. Share transfer flats are however, classified as personal property as opposed to landed property and in respect of such properties an order can be obtained compelling either a seller or a purchaser to complete the agreement which they have entered into.
In the case of either landed or share-transfer property however, if there is to be a longer than usual delay before completion the parties may well wish to enter into a preliminary agreement committing both parties to complete the transaction on or before some specified date in the future.
Preliminary Agreements & Liquidated Damages: A preliminary agreement basically is a short form of agreement signed by the parties recording their agreement to sell and buy a specified property for a given price on or before the prescribed date subject to payment by the defaulting party to the persisting party of a predetermined financial sum which varies between 25% and 33% of the agreed sale price. This predetermined sum (or ’liquidated damages’) is what gives the agreement its ’teeth’ in the absence (in the case of landed property) of the ability to obtain an order compelling a defaulting party to pass contract.
Usual Conditions: Obviously entering into an agreement to purchase which contains an obligation on a defaulting party to pay damages in the order of 30% is a serious matter. Accordingly a purchaser’s lawyer will not let you sign an unconditional preliminary agreement to purchase a property unless all his due diligence and checks have been satisfactorily completed. Even if all issues relating to the property and its title are in order, the purchaser’s lawyer will frequently return the agreement once it has been signed by the purchaser, to the seller’s lawyer subject to the agreements being conditional upon the purchaser’s own sale being completed on the same day and your bank mortgage also being made available to you by your bank or other funding institution.
When does my agreement become binding? Notwithstanding the maxim "Promesse a heritage ne vaut" the Royal Court will recognize an agreement to buy and sell landed property (even if no preliminary agreement has been signed) although it will only be able to award damages and not performance of the actual agreement. The court, however, will only do so where it is clear that a final agreement has been established which is no longer subject to any conditions, and as noted elsewhere that stage tends only ever to be reached very late in the course of a transaction. The legal issues involved can be complex (including an obligation to mitigate one’s loss) and should the need ever arise this is an area which you should be discussed with your lawyer.
What does "Subject to Contract" mean? You may note that letters from estate agents and lawyers in connection with your transaction are headed "Subject to Contract". Basically this means that it is intended that no binding contract is to come into being until a final unconditional agreement has been reached and until that has been achieved either party can withdraw from the transaction without any penalty.
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8. Should a purchaser pay a deposit and if so to whom?
Usually 10%: Frequently a seller requests a deposit as a sign of a purchaser’s ’good faith’. The amount of the requested deposit can vary but it is usually in the sum of 10% and it is frequently a provision of a preliminary agreement that a deposit is paid when the agreement is signed by the purchaser. If the purchaser already owns property in the island it is not unusual for the deposit to be waived or paid in an amount less than 10%.
Deposits held by Lawyers: a purchaser should never pay a deposit direct to a seller or to the sellers estate agent. The proper and safest way for a deposit to be paid by a prospective purchaser is through the offices of his lawyer who will ensure that the terms upon which it is paid and held are clearly set out. Almost always the deposit will be held in a separate account by the seller’s lawyer acting as stakeholder.
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9. Should a purchaser sign an ’option agreement’ to secure a house on a new development?
Forms of Agreement: Developers frequently require prospective purchasers to enter into agreements to ’secure’ newly constructed houses or flats which they have just constructed as part of a new development. The form of agreements produced by developers’ lawyers vary enormously. Sometimes the agreement required is a straightforward preliminary agreement. Often the agreement takes the form of an option to reserve a specified new unit on the development with an initial ’option fee’ of 1% (which is sometimes stated to be non-refundable) being paid immediately, with a balance of 9% being paid within a set period of time after the conveyancing package has been delivered to the purchaser’s legal adviser.
Take Legal Advice First: Whilst it is fair and reasonable for the developer to seek a commitment from a prospective purchaser the basic rule stated above still applies and that is that even a 1% deposit should be paid through the offices of the purchaser’s lawyer, after the purchaser has had the benefit of their lawyer’s advice. It is likely that your lawyer will advise you even at this early stage that the 1% option fee and any agreement to purchase should be conditional on the sale of your existing property and your own mortgage.
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10. Do I need a surveyor?
There are many things which can make the property which a purchaser is proposing to purchase less desirable than it seemed when they first looked around and agreed to purchase it.
Caveat Emptor: A cautious approach is essential given the well know legal maxim "caveat emptor" or "let the buyer beware". The maxim applies to goods and land and basically means that the buyer should be cautious as the risk when purchasing goods or land so far as the quality and soundness of the goods or land is concerned is his and in normal circumstances there is little if any right of recourse against the seller.
Jersey conveyances of landed property invariably contain an express clause to the effect that the property is sold "in the state in which it was at the date of the sale with all its apparent or hidden defects (or "vices caches") if any". This makes it abundantly clear that the purchaser can have no claim against the seller if after the purchase has been completed he finds defects in the structure or condition of the buildings he has purchased.
A purchaser should accordingly ensure that he is happy with the condition of the property he is purchasing and any items of equipment or contents that go with it before he commits himself unconditionally to the purchase of the property.
Obtain a survey: Certainly so far as the structure of any buildings on the property he is proposing to purchase is concerned, the purchaser should consider obtaining a survey, but the novice home-buyer might be confused by the fact that there would appear to be different types of survey available to him. Basically there are three types of survey or valuation report available to the prospective purchaser.
Basic valuation: In truth this is not a survey at all and is just what it says: a valuation. Such a report is frequently required by banks and other lending institutions to satisfy themselves that the property against which their mortgage is to be secured is of sufficient value to provide them with adequate security. As such these reports are frequently produced solely for the benefit of the lender and frequently do not concern themselves with issues of structure or condition. It is questionable whether a purchaser would have any right of recourse against the valuer if subsequent to completion issues with the structure or condition of the buildings become apparent.
Homebuyer’s Report: This is a more detailed report than a basic valuation and although it might well comment on whether the property is worth what the purchaser has agreed to pay for it, it will provide a more detailed report on the state and condition of the property and will often provide a purchaser with a right of action against the surveyor who produced it if something has been missed in relation to the structure or condition of the property. Such reports, however, do not purport to be full structural surveys and accordingly often contain substantial disclaimers and ’get outs’ which will mean that the chances of suing the surveyor who has produced such report and missed something are limited.
Full structural survey: This type of report is the most detailed. The liability of the surveyor who produces such a report tends to be much wider than that of the surveyor who produces merely a homebuyer’s report. In practice the requirements of a full structural survey are stringent. There will be instances where the surveyor will wish to undertake certain exploratory works such as opening up floors and walls. Often a seller will not accept such disruption. Accordingly even full structural surveys frequently contain some disclaimers and get-outs.
Which report is best for you? Your lawyer obviously is not a surveyor and cannot report on the condition of the house you are proposing to purchase. It is likely, if you ask your lawyer that he will advise you that at the very least you should obtain a homebuyer’s report. Ideally, however, you should discuss precisely what sort of survey is best given the type age and location of the property you are proposing purchasing with an independent qualified surveyor. In any event before commissioning any survey it is well to check with your lender to ensure that the proposed survey and surveyor are acceptable to it.
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11. Do I need any other professionals?
Mortgage Broker: If you are borrowing it is advisable that you seek the advice of a professional mortgage adviser. A good broker will seek the loan package that best suits you and will not just refer you to the lending institution which he deals with most. Mortgage packages have become ever more complex and it is easy to become lost in the fine detail or miss important provisions. A package which appears immediately appealing with the lowest interest rate might not be best if there are large penalties payable if the mortgage is repaid early or if the interest rate can be varied by the lender at its discretion. The good mortgage broker will be aware of the strengths and weaknesses of the various mortgage packages available in the market and should be able to match you to the package which best meets your own personal circumstances.
Household Insurance: At the very least a purchaser will require household insurance cover providing comprehensive cover in the event of damage to his property after he has acquired it. The cover you obtain should be for the replacement cost of the buildings upon the property and associated costs. With older properties with old-fashioned and expensive construction styles the full replacement cost can in some instances be more that the market value of the property. Your insurance broker should be able to advise you as to the correct level of cover for the particular property you are purchasing. In addition he can advise as to what types of life insurance and other insurance cover might be appropriate in the event of illness or accidents which make payment of mortgage instalments difficult or impossible.
Architects: As indicated earlier if a purchaser has plans for altering or re-developing the property which he is proposing to purchasing it is advisable to discuss his proposals with his lawyer and provide the lawyer with any plans which he has had prepared. As noted in our homebuyers guides it is part of the purchaser’s lawyer’s role to check with the Planning authority to see what development has or has not been approved in respect of the property. In certain instances the planning history is so complex that a purchaser’s lawyer might suggest that the purchaser’s own architect carries out this enquiry on the purchaser’s behalf. If the purchaser is considering extending or re-developing the property after he has acquired it, it is advisable for his architect to make contact with the purchaser’s lawyer to check that there are no restrictions relating to the property which might have an impact upon the design of any building the purchaser proposes constructing on the property. It is important to realise that obtaining Planning approval does not override any restrictions as to the development of the property which are present in the title to the property. For general guidance as to the conveyancing issues and restrictions which might impact on your plans for re-developing the property please see Boundaries and Easements.
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12. There are some contents included in the sale - are there any things I need to consider?
Part of the Price: Almost invariably there will be some carpets, curtains and furniture included in a sale of a residential house. The price for the property will almost always be divided as between that element of the price payable for the landed property and that payable for the contents. As stamp duty is payable only on the landed property conveyed allocating a sensible amount to contents is a legitimate way of reducing the amount of stamp duty payable (albeit to a very limited extent) by the purchaser on the passing of the conveyance before court.
Good title: The purchaser’s lawyer should obtain confirmation that the seller is selling the contents free of any hire purchase or conditional sale agreements and ensure that if any such agreements are outstanding they are repaid out of the sale proceeds. The purchaser’s lawyer needs to ensure that the seller has good title to them so for example if his client is purchasing a house from the estate of a deceased person he should ensure that the heirs selling the house are also the same heirs who are entitled to the contents.
Inventory: There should be a clear record of those contents which are included in the sale to ensure that there is no dispute after completion as to what should have been left in the house upon completion. If there is an estate agent acting for the seller he will almost as a matter of course produce an inventory for the parties. The lawyers acting respectively for the seller and the purchaser should ensure that the parties agree and counter-sign an inventory before completion. If there is no agent the parties should draw up and agree an inventory themselves. If you need guidance as to how an inventory should be prepared your lawyer will be able to assist and provide you with an example of an inventory. Items which are substantially incorporated, nailed, screwed or otherwise substantially fixed to the structure of the building (such as fitted wardrobes, kitchen and bathroom fittings and light fittings) are strictly not contents as they have become part of the fabric of the house and do not as such need to be listed on an inventory. As a matter of law such items actually are part of the house and if the seller wishes to remove any of them when the transaction is completed he will need to expressly agree with the purchaser that he can retain them otherwise they should form part of the house that is sold to the purchaser.
Fit for Purpose: There may be some particular items included in the sale or item of fitted equipment such as cookers, boilers or pool equipment which is of value and would be expensive to replace. Consideration should be given by the purchaser to obtaining a report from a suitable specialist as to their fitness for purpose and general condition. The purchaser might consider requesting servicing records. The purchaser might also consider obtaining warranties from the seller that the equipment in question has been well maintained and is in good working order and is fit for its purpose.
Manuals and Guarantees: It is comparatively standard with a purchase of a new house for operating manuals and guarantees for all new fixtures and equipment ranging from kitchen appliances to double glazing units to be handed over by the developer to the purchaser on completion. It is in any event worthwhile for a purchaser to ask for operating manuals and guarantees (when they exist) to be handed over even if you are purchasing an older house.
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13. How will the property be purchased and do I need to make a will?
Sole purchaser: If you are purchasing a property by yourself then the property will be conveyed into your sole name. That is simplicity itself, but you must consider what is to happen to that property if you pass away. In some instances if you die intestate your property would pass to your nearest relative or relatives and that might well be the result you would wish for. However, that is not always the case and you should consider making a will and discuss the issue in detail with your lawyer.
Unmarried Partners: It is common for a house to be purchased by a couple before they get married and it is not infrequent to find that only one of the couple has residential qualifications. With a freehold house purchase this means that title to the property can only be in the name of the residentially qualified spouse. As against this the bank or other lending institution will almost inevitably require each of the couple to enter into the mortgage used to purchase the property. This state of affairs leaves the unqualified partner in a vulnerable position and the ways in which his position might be safe-guarded are considered in our Equity Agreements guide. The same difficulties do not emerge with share-transfer properties because it is not necessary for a partner to have residential qualifications before title to the shares of the company owning the property can be vested in his name. The short point is that if title to the home is vested in the name of just one of the partners it is essential that wills are drawn up and executed before or at least simultaneously with the completion of the purchase to protect the position of the unqualified partner who does not have title to the property vested in his name.
Although the unqualified partner’s title to a share-transfer property can easily be protected, if his qualified partner dies, he or she will lose the ability to reside in the apartment. This contrasts with the position of an unqualified partner who is left a freehold property under the will of a qualified partner who alone held title to the couple’s home. This is an area which should be discussed in detail with your legal adviser.
Purchases by co-owners: If the purchase of a freehold property is to be completed in the names of two or more persons, they will own the property either as ’Joint Tenants’ or as ’Tenants in Common’.
Joint Tenants: This is the form of ownership which is used by couples who do not wish to distinguish what each of them owns or to demarcate their shares in the property. When one joint owner dies, the property vests automatically in the surviving joint owner or owners by operation of law. No one joint owner has an interest in the property that is capable of passing under his will. If one joint owner dies leaving a surviving joint owner or owners his interest in the property dies with him. It is only when one joint owner has survived the other joint owner or owners that any one of them has an interest that can pass under his will because at such point in time he has become the absolute owner of the property. A property might also be bought on a joint tenancy basis by a parent with one or more of their children.
Tenants in Common: Where co-owners hold a property as tenants in common, they own the property in specified shares. This method of ownership is accordingly appropriate where the co-owners wish to define their shares whether those shares be equal or unequal. The share of a tenant in common in a property survives his death and his share passes to his estate and can be left to whoever he wishes under his will. The conveyance of a property to spouses as tenants in common is unusual but it might well be appropriate to do so where they do not wish to leave the property in its entirety to the survivor of them such as when one might have children from a previous relationship. If there is a divorce, however, it is worth bearing in mind the courts exercise a wide discretion to re-distribute the assets of the spouses between them as the circumstances of the parties require.
Company purchases: Company acquisitions of single dwelling units other than blocks of flats or individual share-transfer flats are generally not permitted under the Housing Law and Regulations other than in the instances of 1(1)(j) and 1(1)(k) acquisitions and if you are not a 1(1)(j) or 1(1)(k) and have a particular reason for wishing to purchase in the name of a company you should discuss this at the earliest opportunity with your lawyer who can discuss with you whether there any merits in trying to make a special case for permission to complete in the name of a company.
Do I need to make a will? As is apparent from what has just been written there are occasions where it is not necessary for a will to be made because the property will pass to the person you would want to inherit it on an intestacy or will vest in them as a surviving joint tenant. In other instances such as that of an unmarried couple where only one of them has title to the property it is absolutely essential that wills are made. In many other instances, for example that of a young family travelling together it is highly desirable for wills to be drawn up and executed. Again the issue of wills is one which should be discussed with your lawyer at a very early stage.
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14. What should I do to ensure that my lawyer has all the funds he needs to complete my purchase on time?
Your lawyer’s draft statement: As indicated in section [to be completed] above your lawyer should at a very early stage in the transaction provide you with a draft of the final statement which you will be provided with after the completion of your transaction. That draft statement will detail the professional fees and stamp duty which you will incur. It will also set out the amount which is being received from any bank or other lending institution assisting you fund your purchase. Additionally the draft statement will indicate what balance (if any) you need to provide your lawyer with before the completion date.
Cleared funds before Completion: It is important to realise that a lawyer acting for a purchaser will need any balance of funds which the purchaser is to contribute towards the completion of the purchase in cleared funds before the completion date. The usual requirement is that the necessary balance be transferred by electronic transfer to the lawyer’s client account so that cleared funds are in his account at least 24 hours before the anticipated completion date. To ensure that you can meet this requirement, if you are a purchaser, it is important that you ensure that you actually have funds available to you at the relevant time which you can transfer to your lawyer. Accordingly if your monies are on a fixed term deposit or you need to sell some shares or other investments you should make the necessary arrangements in good time.
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15. What other things do I need to do to ensure that I move house on time?
Removal Companies: Removal companies often complain that would be house purchasers and sellers do not make arrangements with them in adequate time to enable them to move house for them on the day they ideally would like. As with so many aspects of buying and selling a house the secret is to speak to the right people as soon as reasonably possible and keep in touch. Good communication is essential. To assist in setting you on your way in timely manner we have on this web-site established links to various removal companies operating in this island.
Utility Companies: Obviously your move will be that much less of a trial if you have arranged for all utility services to be available and transferred into your name from the time of completion of your transaction. Again links are provided to all the utility companies, Jersey Post, Sky TV and others on the appropriate section of this site, where you should be able to find all the information and down-loadable forms which you will need to ensure utility services are provided to your new home in good time.
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16. When can I move in?
Immediately - maybe! When someone purchases their new home they are in theory entitled to move in immediately completion has taken place. However, if your purchase or sale is one of a chain of property transactions some thought and discussion with others in the chain will need to take place to ensure all happens in an orderly manner.
Discuss with your lawyer: Contracts of purchase of residential properties habitually provide that the purchaser is entitled to "immediate vacant possession" but notwithstanding that provision the parties to the transaction usually arrange matters so that possession is provided during the course of the weekend immediately subsequent to the Friday upon which they pass contract before the Royal Court. If a delay in possession of several days has been agreed between the parties, it is advisable to discuss the issue with your lawyer so that the agreement between the parties is properly recorded and understood. If a delay of more than a few days is likely the advice of your lawyer certainly should be obtained.
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17. When will I receive the keys?
The traditional & practical approaches: Traditionally keys are handed over in court though frequently they are handed over between the parties when possession is given to the purchaser.
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18. What is required of me if my purchase or sale is to complete before the Royal Court?
Freehold Properties: If you are purchasing or selling a freehold (or long leasehold) property completion of your transaction will take place before the Royal Court on a Friday afternoon at 14:30. If you are unable or do not wish to be present your lawyer will need to obtain a power of attorney from you enabling him to pass the contract of conveyance on your behalf. If you do decide to attend court yourself then you should bear in mind that the dress code is definitely ’smart’. Men are expected to wear a button up shirt and tie and jacket and smart trousers. Failure to observe the dress code can result in the court refusing to pass your contract. If you are purchasing your house in the name of a company or selling a company owned house, someone will need to appear on behalf of the company in court. If you are unable to attend yourself as a director of the company your lawyer will be able to appear on behalf of the company but you will need to make appropriate arrangements well in advance with your lawyer for him to be authorised to appear on behalf of the company.
Share Transfer Properties: Share transfer purchases and sales are not completed before the Royal Court because share transfer properties are personal property as opposed to real or ’landed’ property. The completion of such transactions is dealt with in the offices of the lawyers acting for the parties.
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19. When will the purchaser become the owner?
Upon Completion: The purchaser will become the legal owner of the house he has purchased immediately contract is passed before the Royal Court. It is for this reason that it is essential that the purchaser insures his new house with effect from the date that contract is passed.
Does the bank own my house? One of the differences between Jersey land law and English land law is the manner in which loans are secured against a borrower’s property. Jersey law provides the lender with certain rights against the borrower’s property against which he has obtained a "hypothec" or charge. Strictly a hypothec is a different legal concept to a mortgage (although for convenience we refer to a charge over your property as a mortgage in these FAQs) and there is no conveyance under Jersey law of the borrower’s house to the lender pending repayment of the loan such as there frequently is with UK mortgages.
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20. If I have completed the sale of my house when will the sale proceeds be paid to me?
Payment in two working days: If you have sold your house by way of a freehold transfer before the Royal Court the balance of the monies should be paid to you by your lawyer on the Tuesday immediately following the day upon which contract was passed, although occasionally the workings of the banking system might result in payment being made on a Wednesday. If you have sold a share transfer property your lawyer should pay you the funds to your bank account no later than the next working day following completion.
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21. Will I have to pay tax on any profit I make when I sell my house?
No CGT - but trading? The short answer is usually "No" for the simple reason that there is no capital gains tax in Jersey. However, if it is possible for the local tax department to maintain that you are conducting a business of doing-up and selling houses (usually not your principal home) you may be held to be carrying out a trade the profits of which could be subject to income tax. This can be a difficult issue and it is very advisable if you think you might be carrying out such a trade to consult with your accountant.
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22. Am I liable to pay all the parish rates for my house if I sell it during the year?
Rates apportioned: You will be assessed to parish rates, if you were the owner of a house on the first day of January in any year, and will be liable to pay the rates bill for the entire year, even if you sold the house early in January. Your lawyer should however, as a matter of course include a provision in your deed of sale providing for the rates for the year to be apportioned between the purchaser and the seller on a time basis. Once you have paid the rates bill for the entire year you will need to send the receipt issued by the parish to your lawyer who will recover the appropriate proportion from the purchaser.
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23. Do any special rules apply if I am selling a house I have just inherited under a will?
The year & a day issue: If you have inherited a property which has been left to you under a will the will can be attacked and set aside for a year and a day after it has been registered in the Public Registry of the Royal Court as opposed to the date of death of the testator. As a result the purchaser’s lawyer will require certain safeguards to be put in place before his client completes the purchase. Traditionally the sale proceeds were held on a deposit account and not released to the seller until after the elapse of a year and a day from the date of registration of the will, without a successful challenge being made against it. More recently instead of holding the funds for a year and a day a defective title insurance policy is obtained for the benefit of the purchaser and any lender assisting him. If you think these factors might be relevant to your sale (or for that matter your purchase) you should discuss them with your lawyer.
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24. Do I need to keep my deeds safe?
Public Registry record is paramount: Again Jersey law and practice differs from UK law in that it does not recognize the concept of "title deeds" which constitute documents or proof of ownership. Once a contract of purchase has been passed before the Royal Court it is scanned into the records of the Public Registry of the island of Jersey and it is that scanned copy kept in the Public Registry records that constitutes the purchaser’s proof of ownership or "title" to his property. Once the actual contract of purchase has been scanned into the Public Registry it ceases to be of any value (other than perhaps sentimental) and there is certainly no need to arrange for the contract to be kept in safe custody with a bank.
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25. What can I do to ensure my transaction completes smoothly and quickly?
Plan, Communicate & Act Quickly: As previously indicated you can make some difference to how your transaction proceeds by taking the steps you need to take as promptly as possible. For example, it is important if you are purchasing that you arrange your funds so that you have cleared funds available to transfer to your lawyer just before completion. Additionally it is crucially important that a purchaser completes and submits his mortgage application (and takes any other steps relating to his mortgage such as having a medical for any life insurance which might be required) as quickly as possible because many lenders will not instruct their lawyers to produce the mortgage paperwork until the signed application forms have been returned. Communicating well with the various persons involved in your transaction can help enormously. Good communications might for example avoid a last minute panic because the parties have not made arrangements for granting vacant possession. In addition your lawyer will appreciate good clear and prompt instructions.
Choose the right firm of lawyers! Choosing the right firm of lawyers to act for you is also crucially important. Cheapest is rarely best! The key to a successful move is planning so that things are not left to the last minute and you are not rushed into making hasty and ill-considered decisions. Treat the selection of the correct firm of lawyers to act for you as a critically important part of your purchase from the very outset.
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Footnote : are there any things I should do or avoid doing which might cause difficulties when I come to sell my new home?
Title restrictions: As indicated above if you extend or develop your property after you have purchased it is very advisable for you or your architect to check with your lawyer to ensure that there are no boundary issues or restrictive covenants which might mean that the development you propose is of a kind or in a position where legally it should not be. (See Boundaries and Easements)
Planning issues: Additionally it is essential that any development (whether the construction of a new extension or establishing new windows or a satellite dish) which you propose obtains all necessary planning and other statutory consents which might be required. It is also advisable to retain copies of all the relevant approved plans and permits so that they are readily to hand to show and pass on to any new owner of the house.
Obstacle to onward sale: If you build contrary to your property’s title or without the necessary planning or other consents it is very likely such will become issues when you come to sell which might delay your future sale or at worst make your house un-saleable.
Terms of mortgage: Your mortgage will contain many provisions which prevent you from dealing with your new home without your lender’s permission. Such includes letting or selling or further mortgaging your property or carrying out alterations to it without the lender’s consent. If these provisions are breached the lender will at least in theory have the right to demand early re-payment of your mortgage.
For detailed advice concerning any of the topics mentioned above, please contact Peter Bertram.
The information and expressions of opinion contained in this guide are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.