Buying a Property in Jamaica
Buying property in Jamaica can prove to be a sound investment however like most housing markets it all depends on location and your future buyers or renters. Overseas buyers returning to Jamaica may have money available from owning a home and working abroad. Many people return to Jamaica for example from the UK and have made substantial profits on their homes. A returnee will want the best they can afford in Jamaica and experience shows that they will want to live in an area that has all the comforts of the home they are leaving behind.
Increasingly overseas buyers see Jamaica as a place to buy property, with all year round sunshine and relatively low prices you can see the attraction. There are no restrictions on buying property in Jamaica, so foreigners may purchase the property that they like. Jamaica has a well-developed real estate market and agents are commonly used when purchasing homes and property.
Once a buyer has found a property, an offer is made. If the vendor accepts the offer, then land survey and title searches are conducted. It is important to make sure there are no other claims against the property before proceeding. After conducting the search, then it is recommended that the buyer lodge a caveat on the property to prohibit any other claims against it until the transfer is completed.
A registered title is the legal and official title, though much of the land has common law title. This is a certificate of ownership used for unregistered lands and should be upgraded to a registered title before that land is bought. The original registered title is kept at the Office of Land and Titles and a copy provided to the owner, so all registered titles should be easily found.
If everything checks out, then an agreement for sale is prepared by the vendor or his lawyer. This is signed by both parties at the real estate office or lawyer’s office and the buyer places a deposit, from 10-20% of the selling price. Stamp duty is paid by both parties in Jamaica. After signing the sale agreement the buyer must submit an application to the Office of Registrar of Titles and have it stamped within 30 days of the transfer of property or there will be substantial penalties.
Final payment and transfer of deed completes the sale. When this happens depends on how the payment is made, in cash or mortgage, and how long it takes to register the property in the new owner’s name, which can be as long as three months. Once the deed is transferred the property is now yours, and you can enjoy your home in Jamaica.
Things to consider:
Lots and Self-build
Purchasing a lot can be affordable and unlike many countries building land in Jamaica is still readily available. In theory this means that you can build the property of your dreams, many returnees choose this method of returning to the Island. But it can have it draw backs and pitfalls to the uninitiated.
- You will need to fully understand any restrictions on the lot you purchase, your lawyer and Architect can assist with this, and advice should be taken.
- Do not ever consider purchasing without a lawyer, land ownership and good title is not always clear, your lawyer may cost you money, but may save you fortune, don’t ever be tempted to cut corners.
- You can self build to reduce costs, but unless builders and trades men are very tightly managed expenses can quickly becomes out of control through “disappearing” materials and lost man hours.
- A more expensive option at first sight is to appoint a building contractor, they take the risk of property build costs, and will manage the complete build for a fee, though the additional cost may seem unpalatable , the reduced stress and project management provided can save money and mental health in the longer run.
Free Hold House
Much like most western countries the Jamaican property market operates in much the same way, with private sellers and builders selling house through the use of real-estate agents for a fee. Properties are advertised in a number of ways, including local papers, real estate shops and the internet. The property market in Jamaica can be painfully slow though.
If you are looking for a free hold property, take your time and do your research
- Security of the properly is a very important factor, empty adjoining lots can be negative factor, making easy access to your property, and the possible unknown of what may be built in time.
- Visit the area a night, some neighbourhoods can take on quite a different feeling at night. Do look at the local crime figures and avoid anywhere with makeshift ply and scrap wood “local” housing.
- Do choose an area with an active community housing, or resident association, and other returnees in the neighbourhood, this will assist you in settling and feeling at home in your new house.
Gated communities are becoming more popular across Jamaica, from small communities of just a few houses or apartments, to much larger complexes.
They are also often available in either “lot” format, or full finished houses, However, be aware many have quite a few restrictions for build design and time scales for completion.
Gated communities are designed to keep unwanted guests from entering the area in which the homes and apartments are located. There are a number of reasons that individuals from all walks of life may choose to live within the enclosures of a gated community but for obvious reasons they are very popular with Jamaicans seeking that additional security.
What Are Gated Communities?
- Gated communities are neighborhoods enclosed by walls or fences, and possess a security-monitoring entrance into the community. Within the confines of a gated community there may be fitness centers, stores, beaches and other forms of recreation. Some gated communities may even have their own places of worship.
- Some individuals and families may choose to move into gated communities because the neighborhood makes them feel safer. Security guards and locked entrances help protect residents against potential harm from burglary, physical attacks and other feared threats. A woman may feel safer taking a walk alone at night without worrying about being raped. A family can sleep soundly at night knowing the threat of a home invasion is minimal. Neighbors in gated communities do tend look out for the safety and property of one another.
- Regardless of how extensive a gated community is, there is still a lot less traffic on the street than there would be on public roads. Parents like this aspect of living in a gated community. Not only do they know most of the neighbors with whom their children may come into contact, but they also have less fear of accidents if they allow their children to play outside. Children can play on front lawns or in the street and parents can know that there is little chance they will be hit by a car
If you have to leave your home unoccupied for any time, vacation, trips abroad etc – the additional security offered as part of a gated community can make this possible without the additional worry. There is of course a cost for the security, but with wages relatively low, many residents see this as a small price to pay.
Accommodation and life style complex
Though common around the world, the “life style complex” is still a relatively new concept in Jamaica, offering all the convenience and security of a gated community plus many additional benefits, they are a very attractive option for some.
The Palmyra Complex Montego Bay
Boasting, houses, villas, flats and apartments, as well as gyms, fitness studios, health centres, restaurants, shopping and so much more, the life style complex is really a self contained town.
Though not appealing to all, these complex’s have a lot to offer, for visitor and resident that can’t stay full time on the island they can offer an easy and safe step on the property market, with flexibility so that it can easily be rented long or short term for an investment .
For those without a family or friends support structure on the island, they can offer the instant community feel with help and support when its needed – suddenly you not on your own.
And for those concerned about security, or who want a little luxury in life – what can be better than moving into your own hotel
So once you have found your Real Estate In Jamaica – What is the process for buying it ?
Once you have decided to purchase real estate, you will need to secure the services of an Attorney. Your Attorney will protect your interest before and during the transaction though it is possible to purchase without, and its often seen as an expense that can be avoided – IT IS NOT! It is very unwise to purchase real estate without an Attorney on your team.
There are many cases where this has lead to disaster, with significant loss. You should ensure that your attorney has substantial experience in real estate transactions, a personal recommendation is nice, and do check out their qualifications, (we will be happy to make some recommendations of Attorneys we have worked with)
Your Attorney will liaise with the other party’s Attorney on your behalf and a pre-transaction conference with your Attorney is desirable, so that you can hammer out all the terms you want to govern the transaction and obtain the full guidance of your Attorney. In Jamaica it is possible to have a shared Attorney, this can be a means of keep your costs down, but how do they know they will have your priorities in the highest regards, we would suggest this is only done when you know the Attorney first hand and have used them before. If in any doubt, always use your own and separate Attorney.
The legal process of buying real estate has two aspects – signing the Agreement for Sale and signing the Instrument of Transfer. The cost of preparing the Agreement will normally be shared equally between Vendor and Purchaser.
The Agreement for Sale contains all aspects of the real estate transaction, the terms and conditions agreed between Vendor and Purchaser, the financial details of the transaction and other specific conditions regarding, for example, who will bear the risk of the property pending completion. This last aspect bears some elaboration. If the property is being purchased at the height of the hurricane season, then the Purchaser may want to have the Vendor bear the risk pending completion, so that any hurricane damage would be the Vendor’s expense. It is your attorneys job to advise and keep your risk to the minimum.
The agreement will contain provisions regarding the purchase price, how it is payable, a description of the property as contained in the Certificate of Title, whether you will take possession at the completion of the transaction or whether the Vendor will agree to early possession, subject to a probable nominal interest charge, depending on the circumstances. This is the stage of the transaction where your Attorney will try to obtain the best possible terms for your purchase.
The Agreement for Sale will also cover the matter of taxes and fees in the deal. The property taxes payable on the property being sold will usually be pro-rated as of the date of completion. Most Agreements will provide that the Stamp Duty (approximately 5.5.% of the purchase price) will be shared equally between the Vendor and Purchaser. The Transfer Tax, that is the tax on the capital gain earned by the Vendor on sale of the premises is payable exclusively by the Vendor at a rate of 7.5% of the purchase price. The Registration Fee, that is the fee payable for the Purchaser’s name to be endorsed on the Certificate of Title is normally shared equally between Vendor and Purchaser and is normally 0.5% of the purchase price.
When the Purchaser signs the Agreement for Sale, he or she will pay approximately 15 – 20 % of the purchase price plus half the cost of the Agreement for Sale. It is unwise for a Purchaser to pay over money to the Vendor prior to the signing of the Agreement for Sale, because among other things, it may become difficult to determine the commercial purpose of the payment at a later date. One copy of the Agreement will be returned to the Vendor’s Attorney for signing after which your Attorney will keep a copy of the binding Agreement on your behalf.
The Agreement for Sale will contain the date for completion of the transaction, normally ninety to one hundred and twenty days from the date of signing. During this period, the Purchaser finalizes all documents and requirements of the mortgage company if purchasing with a mortgage loan. If the Purchaser purchases by cash, he or she will at this stage enable his or her Attorney to give the Vendor’s Attorney an undertaking, that is a legally binding guarantee, for the balance of the purchase price plus costs of the transaction.
Once all these elements are completed, the Instrument of Transfer is signed. This is the document that conveys ownership of the land from the Vendor to the Purchaser and is often witnessed by each party’s Attorney-at-Law.
Your Attorney will charge as his or her fee for guiding you and protecting your interest at a typical rate of 3% to 5% of the purchase price of the transaction. This amount is payable on completion of the transaction.