Selling Property in Jamaica – COVID Considerations
The process of selling property in Jamaica ought not to be a difficult and arduous one. Certainly, for new purchasers the process can be fraught with anxiety given considerations as to identifying the best location, affordability of the purchase, finding a sufficient down payment and last but certainly not least the mortgage process which has its own particular issues. The seller’s primary concern on the other hand is ensuring that the selling price is within market and having listed the property a buyer can be identified within a relatively short period of time and once a contract Is signed the closing is not protracted. What then should the seller take into account to minimize issues that may arise during the selling process.
1. Identify a competent real estate agent. This should be the first step. Rely on referrals in engaging a real estate agent who has experience listing and selling property in the community that you own. A real estate agent will assist in guiding you on the potential value of your property based on comparable sales in the area. While you could requisition a formal appraisal, the cost may not be a necessary one to incur. Ideally, the purchaser if seeking a mortgage will be required to secure an appraisal and, in any event, must use an appraiser that is on their lender’s approved list of professionals. An experienced realtor will generally be able to provide a fairly accurate range as to selling price. The realtor will also be able to advise on any preparatory steps that need to be taken to make the property appealing to buyers. The realtor will also prequalify your potential purchaser to make sure that any offer made can be supported by serious intent and that the required deposit and pre-approval from the lender is in place. This important step saves time and mitigates the sale being interrupted or the contract for sale being cancelled at a later date as a result of the purchaser not qualifying for a mortgage.
2. Retain an experienced real estate attorney Another important step that can either make or break your sale. While the realtor will identify a buyer, the attorney will be responsible for managing the process from preparing the sales contract to closing. A number of issues can arise during this phase of the sale and you will need an attorney with experience in managing personalities, who is patient and who knows when to be assertive in protecting your interest and also is able to negotiate terms that are in your favour.
Experienced real estate attorneys are aware that not every sale is the same and it is not always practical to utilize a standard agreement. They will therefore be vigilant and pay attention to any nuance that may negatively affect the completion of the sale. For example, issues could arise where a third party may be claiming an interest in the property and has lodged a caveat on the title which could prevent or delay completion of the sale. Discharging this caveat will require negotiation with the person who lodged this claim. It is also not uncommon that there are tenants in possession who refuse to vacate the property on a timely basis to facilitate possession by the purchasers. In this instance court action may be necessary if the issuance of a notice to give up possession fails.
Other potentially troublesome issues can arise where a surveyor’s identification report requisitioned by the purchaser to confirm that that there are no breaches of the restrictive covenant, reveals a breach. For example, where an additional room or structure was added to the property without the required local authority approval, an application may have to be made to the court to modify this breached covenant. Distance breaches are typical, and that is where the covenant requires a stipulated distance from the structure to the boundary and there is an intervening structure that interferes with the required measurement. There can also be a boundary breach where sometimes unknowingly a neighbor or even your boundary wall may have been incorrectly placed. These are just a few examples of what your attorney would be expected to manage.
3. Uptodate Utilities, Property Tax and Mortgage Statement Before the purchaser can submit their mortgage application they will need to provide proof to the mortgage company that all utilities, in particularly, water is paid up. Property tax must also be paid up at least to the time of closing. In some instances where you have paid for a period beyond closing it is not unreasonable for that payment to be prorated and the purchaser provide a reimbursement. Where there is a mortgage you would want an up to date statement from your lender so that your Attorney can advise the purchaser of the sums required to discharge the mortgage enabling the release of the duplicate certificate of title from your mortgage company. Of course you would want to know that your net sales proceeds, after all expenses are deducted, is sufficient to liquidate the outstanding mortgage.
4. Locate the Duplicate Certificate of Title Land titling in Jamaica is still paper based. Once a registered title for land is issued the original is in the custody of the Registrar of Titles and the property owner is issued a duplicate. Any change of ownership or other endorsement will be done simultaneously on the Original as well as the duplicate. For the sale to the new owner to be registered you must have the duplicate in your possession. It is very important that you locate the duplicate before listing the property and have it ready to dispatch to your Attorney prior to completion so that the required transfers executed with endorsement in the name of the Purchasers can be registered. If the duplicate cannot be located a lost tile application will have to be done and it could take up to three months for a new duplicate to be issued. There are instances as well where a joint owner described as a joint tenant on the title may have passed and an application needs to be done to remove the endorsement of this joint tenant as owner prior to transfer. Your attorney would have inspected the title and advised you on this process if this were to apply.
5. Completion/Closing The sales contract will stipulate the time period for closing. With a cash purchase this can be 30 days or with mortgage it is generally 90 days. At some point a letter of undertaking will be issued by the purchaser’s attorney or financial institution. This letter undertakes to pay irrevocably the balance of purchase price in exchange for the duplicate certificate of title registered in the name of the purchaser as well as proof that vacant possession can be granted, that there are no tenants or other persons in possession, that the utilities and property taxes have been paid up to date, and of course that the property remains in the same condition as initially inspected. Prior to closing you should therefore ensure that all these conditions are being complied with and there is very limited likelihood that the completion could be delayed. Closing is paper based unlike the United States so there is no need for the parties to be physically present. If you reside abroad your attorney will guide you on what is required for execution of documents.
These are just some of the considerations that should be applied during the selling process. If you retain experienced professionals and repose the required trust in them it is likely that completion will be expeditious and devoid of some of the drama that can arise.