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What does Freehold mean?
There are various ways in Jersey that one can own a property, it has previously been presumed by purchasers that a freehold property is the most secure way of purchasing a property. However recently there appears to be a change in the market and more and more buyers are considering purchasing a share transfer property. Share transfer properties are common with young individuals, couples purchasing their first home and/or investors.
However, it is still the case for the majority of purchasers to opt to purchase a freehold property if they are fortunate enough to have the choice.
The term freehold is used (although it has no technical meaning) to describe your ownership in perpetuity. As an owner of a freehold property you have an outright ownership of the property and the land on which it stands subject to restrictive covenants and statutory exceptions.
What will my lawyer do upon instruction?
The main steps your lawyers carries out are:
1 Review of draft contract of Sale
Prior to 2006 all contracts were written in French, as oppose to English. Nevertheless as some of you may be aware, although they are now in English it can be a lengthy and complicated document.
The reason for reviewing the contract is to ensure that all the rights either over or for the benefit of the property are adequate.
The main aim of such an exercise is to ensure that the Vendor has a good unencumbered marketable title to pass on to you and the property free from any outstanding claims.
Searches are required to check that the property you are purchasing has access to the main utilities and that there are no issues with Planning and any public roads surrounding the property.
This is a crucial step as site visit can sometimes reveal issues with boundaries, breach of restrictions in the contract or encroachments that are not recorded in the contract.
Things for you to consider…
Whilst your lawyer is dealing with the legal aspect it is time for you to think about the following:
Obtaining a Registration Card
In order to buy a freehold property in Jersey you must hold a valid registration card providing entitlement to purchase. This can be obtained from the Population Office. It is important to be aware that if you do not have a card you will not be permitted to purchase.
Funding
It is always a good idea if you require a mortgage to contact an advisor at the earliest stage to assist you with the application for a mortgage as there are many occasions when the mortgage has caused a delay on completion
Survey and valuation
You should be aware that whilst your bank will request a survey and a valuation, it is not comprehensive and you should consider instructing a surveyor to carry out a full structural survey. The reason we advise you to do this is because the contract of sale will contain what is called the vice cache clause. This in essence means that your property is sold as seen and all hidden or apparent defects are your responsibility once you have purchased.
In addition this is probably one of the largest investments you will make and therefore it is worth carrying out all the checks.
Other issues you need to be aware of …
Inventory
It is important that you check the inventory to make sure that it is correct and that all items are working.
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. You should consider the amount payable when calculating your affordability. Please view our website for the stamp duty calculator.
Insurance
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 of passing contract. If you are purchasing with the assistance of a mortgage, your lender will require sight of the cover note before releasing funds and to be noted on the policy as an interest party.
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 … buying your new home
Passing of the contract
Most first time buyers tend to want ‘their day in Court’ as it is an old Jersey tradition an experience in its own way. Alternatively, should you opt not to attend you can, by power of attorney, appoint your lawyer to attend on your behalf.
Once the contract has passed before the court, the keys will usually be exchanged in the Royal Court. A copy of the contract will be retained in the Public Registry and will constitute evidence of your title to the property.
Buying a property and moving your home is found to be one of the most stressful tasks that you will carry out, and therefore it is important to instruct a good lawyer to take away the legal side of moving and to allow you to focus on the move.
For further information please do not hesitate to contact Priya Jobanputra at Parslows.
