FAQ’s

Frequently Asked Question about Buying and Selling Real Estate in Jamaica

1) WHAT ARE THE OBLIGATIONS OF A PURCHASER IN PURCHASING REAL ESTATE?

1) To pay the purchase price and costs which are:

• 1/2 Stamp Duty (1 1/2% of Purchase Price)
• 1/2 Registration Fee (.25% of Purchase Price)
• 1/2 Vendor’s attorney’s cost for preparing Agreement of Sale
• Purchaser’s Attorney’s fees on Transfer.

2) To ensure that what is on the Certificate of Title is what is on land by engaging the services of a Commissioned Land Surveyor.

3) Make it known to the vendor any discrepancy which the Commissioned Land Surveyor may reveal.

4) If Mortgage is required, expeditiously make the application for mortgage and ensure that you comply with all the requirements of the lending institution.

2) WHAT ARE THE OBLIGATIONS OF THE VENDOR IN SELLING REAL ESTATE?

1) To ensure that the property he/she is selling is free from encumbrances, that is, caveats and mortgages.
2) Ensure that the taxes and water expenses are paid up to the date of completion of the sale.
3) To pay the Transfer Tax (4%) and costs which are:

• 1/2 Stamp Duty (1 1/2 % of Purchase Price)
• 1/2 Registration Fee (.25% of Purchase Price)
• 1/2 Vendor’s Attorney’s Fee for preparing Agreement of Sale.
• Pay his/her attorney’s fees on Transfer.

3) WHAT IS THE COMMISSION TO BE PAID WHEN THE SERVICES OF A REAL ESTATE BROKER IS ENGAGED?

Standard industry norm is 3-5% of the cost of the property but it is negotiable.

4) HOW DOES A REAL ESTATE TRANSACTION PROCEED?

After the offer to purchase is accepted by the Vendor, the Vendor prepares the agreement of sale according to the terms agreed upon by the Vendor and the Purchaser and sends it to the Purchaser”s Lawyer it to be executed by the Purchaser and returned with the agreed down payment.

After the signed Agreement and the down payment are received by the Vendor’s Lawyer the Vendor will execute the Agreement and a copy of which will be forwarded to the Purchaser’s Lawyer.

The Vendor’s Lawyer will present the agreement to the Taxpayer Audit and Assessment Department (TAAD) for the Stamp Duty and Transfer Tax to be assessed after which the Transfer Tax and Stamp Duty are paid from the down payment received from the Purchaser on account of the Purchaser Price.

After the payment of Transfer Tax and Stamp Duty are noted on the Agreement for Sale, the Vendor’s Lawyer will forward to the Purchaser’s Lawyer (in case of a cash sale) the Instrument of Transfer together with a statement of account indicating the balance of Purchase Price and Purchaser’s costs to be assessed so that the sale may be completed.

After the Instrument of Transfer is signed and the TAAD cross-stamps it to evidence the payment of Transfer Tax and Stamp Duty, the Instrument of Transfer the Certificate of Title
along with the required registration fee to be paid to the Office of Titles will be submitted to National Land Agency (Office of Titles) for the transfer to the Purchaser to be endorsed on the Certificate of Title.

When this is done the transaction is complete with the Vendor receiving the net proceeds of sale and the purchaser receiving his Certificate of Title.

5) HOW LONG WILL IT TAKE TO COMPLETE THE TRANSACTION?

• If it is a cash purchase, the transaction cannot take less than 30 days.
• If it will be financed by a mortgage it will take a minimum of 90 days, depending on how quickly the requirements of the lending institution are satisfied.

6) IS IT OK TO USE THE SAME LAWYER WHO IS ACTING FOR THE OTHER PARTY, SO THAT THE VENDOR AND THE PURCHASER CAN SHARE THE COSTS AND SAVE SOME MONEY?

No, as the Lawyer can only protect the interest of either the Vendor or the Purchaser. If a problem arises there will be a conflict of interest and one party will be left unprotected.

7) IF SOMETHING HAPPENS AND THE PURCHASER CANNOT COMPLETE THE SALE WILL HE/SHE LOSE THE DOWN PAYMENT?

Whether it is stated in the contract or not, a Purchaser may lose up to 10% of the Purchase Price if he she fails to complete the Sale Agreement. In Law the Vendor is entitled to 10% of the Purchase Price in damages for the Purchaser’s breach.

WHAT HAPPENS IF AFTER THE AGREEMENT FOR SALE IS SIGNED AND THE DOWN
PAYMENT PAID THE VENDOR REFUSES TO COMPLETE THE SALE?

The Purchaser’s remedy is to obtain from the Court an Order for Specific Performance of the Contract by the Vendor.