Flying Freehold Property

The "Loi (1991) sur la copropriété des immeubles bâtis", which is more commonly known as the "Flying Freehold Law" (the "Law"), was enacted in 1991 for the purpose of providing for the co-ownership of buildings, which are to be divided into separate dwellings. Thus, in particular, enabling apartments or units to be sold on a freehold basis as opposed to share transfer (see Buying Share Transfer Properties in Jersey).

Index
Introduction
Procedure
What the Lawyers do
General
Property insurance
Survey and valuation 

Introduction

In essence, the Law allows outright freehold ownership of the subject apartment or unit. Accordingly, the apartment or unit and, if applicable, the associated garden, patio, terrace, parking space and store will form part of the Purchaser’s real estate. The Law also enables apartments to be mortgaged, whereas in the case of share transfer properties it is not the apartment which provides security in relation to the mortgage, but the relevant block of shares in the holding company.

In many areas, ownership under the Law and by share transfer are similar in that regulations governing the co-owners/shareholders are alike. However, under the Law such rules and regulations are expressed in a declaration of co-ownership ("the Declaration") of an Association, which comes into being usually at the time of the first sale by the then vendor. The Association is all of the co-owners (of the property as a whole) and essentially becomes the notional owner of the whole of the property (the"Collective Property"). With share transfer properties the rules and regulations governing the shareholders are dictated by the articles of association of the holding company.

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Procedure

The procedure for buying a flying freehold apartment or unit is similar in many ways to that of purchasing a freehold property, and it is necessary for a contract of conveyance to be passed before the Royal Court.

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What the lawyers do

Essentially, purchasing a flying freehold apartment or unit involves the lawyer carrying out all of the searches on the Collective Property and the subject apartment or unit in a similar manner to that which would be required in respect of conveying a freehold property. In addition to this the Association’s records need to be inspected by the purchaser’s lawyer to ensure no decisions have been taken which could have an adverse effect or impact on the purchaser’s enjoyment of the subject apartment or unit. Likewise, as with freehold properties the consent of the Housing Minister is required and statutory searches are sent out in like manner.

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General

Please refer to our freehold property guide in relation to information in respect of:

• Initial instructions and requirements
• Funding 
• Checking Title and Site Visit 
• Inventory of Contents 
• Preliminary Agreement of Sale 
• Contract of Conveyance 
• Vacant Possession 
• Timing of Completion 
• Wills
• First Time Buyers 
• Fees and Stamp Duty 

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Property Insurance

The purchaser will generally only need to insure the contents of the subject apartment or unit, all internal wall, floor and ceiling finishes, kitchen and bathroom fittings and appliances, doors and windows, and decorative finishes as you will be responsible for everything within the subject apartment or unit. The Collective Property will be insured by the Association and in respect of which you will be liable to reimburse a proportion of the premium.

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Survey and Valuation

A similar situation exists as that to share transfer properties, in that the purchaser will have a proportionate liability and responsibility with the other co-owners for structural and other works to the exterior of the Collective Property and the common parts. Accordingly, you should be concerned not only with the subject apartment or unit itself, but also with the whole building in which it is situated. Your bank or lender will also require a valuation of the apartment or unit and should supply you with a list of Surveyors who are on their approved panel. We do not provide professional advice as to the structural condition of any building nor as to the value of the subject apartment or unit. In the same manner you should confirm with the appropriate professional that the electricity, water, heating and other services in the Collective Property are in good working order and that there are no problems with the drains or water supply where the Collective Property enjoys a supply other than mains services. Once again, the contract of conveyance will state that you acquire the apartment or unit in its present condition with all hidden or apparent defects.

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For detailed advice concerning flying freehold property in Jersey, please contact Gavin Renault. 

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.