If you are thinking about buying property in Jamaica then you are about to embark upon a major investment. A potential investment in property requires careful consideration because of the risks involved.
You want to ensure that you are fully satisfied with the property you are purchasing so you do not become the victim of a bad bargain. Here are a few tips a prospective purchaser should consider before “sealing the deal”.
Seek legal advice
When purchasing property, it is prudent to retain the services of an Attorney-at-law to ensure that your interests are properly protected during the entire sale transaction. Many purchasers attempt to handle the transaction on their own only to later discover that the process is a lot more involved than initially thought.
Make enquires
Before the sale agreement is signed, the vendor has no obligation to disclose certain information about his title or even his property to the purchaser. At this pre-contractual stage the purchaser has a duty to make enquiries on matters which do not affect the vendor’s title for the simple reason that it may be too late to raise them after the contract is signed.
An experienced real estate Attorney can properly advise you of the kinds of enquiries and searches you should make at this stage if you are not sure. The purpose of these enquiries is to help a purchaser to make an informed decision as to whether he will proceed with the purchase. Extra care should be taken when purchasing condominiums/strata properties especially in new developments.
Conduct searches
A check with the local planning authority can disclose zoning and planning restrictions on the use of the land under the local planning laws. Land developers especially should check to see if certain kinds of developments are permitted in certain areas.
If there is a registered title for the property, a title search can be very useful in the pre-contractual stage although typically it is conducted after the contract is signed. Title searches not only confirm the vendor’s ownership of the property but they can also put a purchaser on notice of any encumbrances (adverse third-party rights) affecting the title, e.g., caveats, mortgages, charges. Depending on the stage of the transaction, the results of a title search can help you to decide if you will avoid entering into a contract altogether or proceed with an existing contract on the basis that the vendor has undertaken to remove the defects in his title.
Get your own valuation report
A recent valuation report will disclose the current market value of the property and can help you to decide whether to accept the vendor’s price or make your own offer. Banks and other financial institutions usually require a valuation report when a purchaser is obtaining a mortgage loan.
Do a survey
Purchasers should have the property surveyed by a commissioned land surveyor so that it can be properly identified. A surveyor’s identification report can disclose breaches of restrictive covenants endorsed on the title or boundary discrepancies that could give rise to future problems with selling the property or conflict with neighbours. If you are getting a mortgage to finance the purchase the mortgagee will require a surveyor’s identification report to ensure that there are no breaches of covenants etc. If purchasing with cash only you still need a surveyor’s identification report to confirm that there are no issues with the property. Most sale agreements contain a special condition giving the purchaser a timeline to bring any objections or requisitions to the attention of the vendor. Purchasers should pay close attention to this clause as it is a good opportunity to point out any breaches that the vendor may need to cure.
Inspect what you are buying
When buying property the purchaser should be satisfied with its physical state. Purchasers should examine the physical features of the property once the vendor has granted permission. The vendor is not obligated to inform a purchaser of obvious physical defects in the property and the onus is on the purchaser to discover these flaws for himself. This is important especially when property is being sold “as is”. If purchasing a building you should have it professionally examined for structural or drainage defects, dry rot, faulty electrical wiring etc.
If you are buying vacant land, don’t just examine the land you plan on purchasing but also take notice of its surroundings. Depending on how developed the area is you might discover problems with accessing the land itself or utilities such as water and electricity. In the pre-contractual stages certain observations can help you to determine if it is worth making an offer at all and the amount you are willing to offer.
An inspection can also reveal whether the property is occupied and you may wish to put questions to the vendor as to the nature of the occupancies eg. tenants, squatters, licensees. If you are not willing to take the property with occupants you should insist that the contract provides for “vacant possession” on completion of the sale.
Experience often shows that failure to do sufficient investigations when buying property can yield unpleasant surprises that could leave a purchaser with a headache twice the size of the property they are buying. However, with a good budget, proper planning and sound legal advice, purchasers can avoid a potential nightmare and reap the rewards of their investment.
Ms. Christina Brown is an Attorney-at-Law in the Kingston office of the law firm DunnCox, located at 48 Duke Street. You may contact her at christina.brown@dunncox.com