Real Estate Lawyers In Jamaica on Buying Property in Jamaica

Real Estate Lawyers In Jamaica On Buying Property in Jamaica

As real estate lawyers in Jamaica, we know that buying a property in Jamaica can be a nightmare. From the almost 6 months to close to the over 5% closing cost, we have pretty much seen it all. This article is meant to inform our readers how to make this already dreadful process as smooth sailing as possible.

Before The Contract

After finding the property that you want to purchase, the next step is to make a formal offer. If you have a realtor, they will ask you to complete an offer form. If a you do not have a realtor, you may write your own offer letter to the vendor. The offer form or letter should contain the price and the method of payment that you wish to use. The method of payment can either be through mortgage financing or cash sale.

Selecting Real Estate Lawyers in Jamaica

Once you have found your dream property within your budget, the next step is to  sieve through the internet for good real estate lawyers in Jamaica. Your friends and family may tell you to find an experience lawyer, but experience is not synonymous to competence,

You will need a real estate lawyer who is efficient very detailed oriented and someone who clearly has your best interest at heart. Therefore, the first rule in selecting a real estate lawyers in Jamaica is that you NEVER use the vendor’s lawyer.

A good place to start is seeking a recommendation from the realtor. The realtor might be a credible source for referrals since the more efficient the real estate lawyer is, the faster the realtor gets paid.

Fees for real estate lawyers in Jamaica ranges from 1.75% to 5% of the purchase price. However, the most expensive and the least expensive may have little to do with the level of service that you get. For instance, several clients that we have are clients who left bigger firms to come to us. The reason being is that bigger firms in most cases tend to be less hands on. You may also want to avoid a law firm where the lawyer is the bearer, receptionist and everything in one. These lawyers are often overburden and may not be able to provide you with the hands-on guidance you need.

What’s next

Once you find a real estate lawyer , he will communicate with the vendor’s lawyer  and obtain either the volume and folio number of the title or a copy of the title. The title will be checked to ensure that the person who is selling has a right to sell. It will also be checked to ensure that there are no other claims on the title that would hinder a transfer.

Drafting of the Agreement for Sale

If all is well at this stage, then the vendor’s lawyer will commence drafting the agreement for sale. In the meantime, you may obtain a survey report to ensure that there are no breaches on the property. A breach could be as minor as a barbed wire fence being two inches closer to a building than it should be, or as great an entire storey on top of a house. In some cases a breach or encroachment can prevent you from getting a mortgage.

A valuation report is also important. You would need the services of a land valuator to do this. The valuator will compile a valuation report for you, which will tell you how much the property is valued. He will assess this by comparing the prices of similar properties in the area. The valuator will also arrive at his estimate by looking at how old the building is. The valuation report is important because you do not want to purchase a property far beyond its market value.

It is important to note as well that the fact a breach or encroachment may affect the value of a property. As a result, the mortgagee may be hesitant to grant a mortgage. However, they may consider it if there is an undertaking from either the vendor’s lawyer. The undertaking would be a promise from the lawyer to the mortgagee, to apply to the court for either a discharge or modification of that breach.

Checking the Agreement for Sale and Payment of Deposit

Once the vendor’s lawyer finish drafting the sales agreement he will send it to your lawyer who will peruse it.  Your lawyer’s job is to ensure that the Agreement is not contrary to your interest. After your lawyer checks the Agreement, once the terms are satisfactory to you, you can go ahead and sign it. A deposit of 10% of the purchase price is usually required upon signing of the agreement. 10 % deposit is required because 9.5% of the purchase price is needed to stamp the agreement for sale and register the transfer.

The cost for the preparation of the sales agreement is usually $50,000 and this cost is usually shared equally between the vendor and the purchaser.

Mortgage Interview

Once all parties to the contract have signed, you are ready for your mortgage interview. Assuming that you have received your pre-qualification letter. For this interview you will need the following:

• Signed agreement for sale
• Valuation report
• Survey report
• Statement of account
• Copy of title (usually attached to the valuation report.
• Up to date property tax certificate
• Most recent water bill and water bill receipt

If your mortgage institution is satisfied with all these documents you will get your commitment letter. The commitment letter or a copy must be sent to the vendor’s lawyer.

Submission of Documents To Stamp Office

Next, the vendor’s attorney will then submit the signed sales agreement for valuation at the Stamp Office. Within two weeks he will return to pay transfer tax and stamp duty. Transfer tax is 5% of the purchase price and it is the vendor who bears this cost. On the other hand, Stamp Duty is 4% and this cost is shared equally between the vendor and the purchaser.

Undertaking from Mortgagee

Mortgagees,  particularly NHT usually sends an undertaking to the vendor’s lawyer, promising to pay the balance of the purchase price. At this stage the vendor’s attorney may prepare the transfer instrument and have it cross stamped at the stamp office. Most mortgagees will register the transfer themselves. Therefore, the vendor’s lawyer will only need to submit the final sets of documents to them. These documents include but is not limited to the following:

• The original title
• Up to date water bill and water bill receipt
• Property Tax Certificate
• Instrument of Transfer
• Manager Cheque to National Land Agency for Registration fee

Once these documents are submitted,  you will wait for about 3 to four weeks for the sale to be completed. The mortgagee will pay over the balance of the purchase price to the vendor’s lawyer. Afterwards the vendor’s lawyer will hand over the keys and letters of possession.