5 Common Challenges for Property Vendors

Selling property in Jamaica can be a lucrative endeavor, but it’s not without its challenges. Both vendors and purchasers experience multiple challenges in their endeavours to sell or acquire property. The experience can be different for persons living in Jamaica than it is for those who live outside of the country. Nevertheless, there are a few challenges that are universal for both sets of persons. In this article, I will address the challenges that vendors usually experience and how these may be avoided or remedied.

For vendors living outside of Jamaica, the process can be even more complex due to distance, communication barriers, and unfamiliarity with local laws. I will address both procedural and administrative concerns below.

1.    Incomplete or Disputed Title

One of the most significant issues in Jamaican property transactions is an unclear or disputed title. If the property’s ownership is not well-documented or if there are unresolved boundary disputes, the sale could fall through or lead to legal complications. Specifically, Jamaica has legislation whereby a third party can acquire interest in land even if a title already exists and even if the registered owner is paying the taxes.

Many property owners overseas do not visit their properties as often as they should. In my experience, third parties have entered into possession and even constructed homes on some of these properties. Even further, in a few cases, registered owners have tried to sell but faced issues with caveats, adverse possession and disputed boundaries. All of these issues would significantly and adversely impact a vendor’s ability to sell property.

Remedy: Conduct a thorough title search at the National Land Agency (NLA) to ensure the title is clear. Engage a qualified attorney in Jamaica to resolve any disputes or irregularities before listing the property. If you’re overseas, ensure your attorney provides regular updates and scans of all relevant documents.

2.    Undisclosed Encumbrances/Covenants

Encumbrances such as mortgages, easements, or restrictive covenants can affect the property’s marketability. Failing to disclose these to potential buyers can result in legal action or the collapse of the transaction as these affect how the property can be used by the future owner. For example, there might be a restrictive covenant preventing the owner from conducting any type of commercial activity at the specific property. Another example is where an easement is registered on title granting a third party interest in the property.

Remedy: Be transparent about any encumbrances and/or restrictive covenants and ensure they are properly documented. A title search will reveal any such issues, so address them before putting the property on the market. If you’re unsure about the status of your property, your attorney can guide you.

3.    Valuation and Pricing Issues

Overpricing or underpricing your property can lead to financial loss or a prolonged sales process. Inaccurate valuations can deter serious buyers or attract lowball offers. I’ve seen many cases where the properties were overpriced and lending institutions refused to offer mortgages for them. This has become a growing concern especially in the last two years.

Additionally, all taxes and fees including the cost of legal representation are based on the value of the property. Property transactions in Jamaica are subject to various taxes and fees, including stamp duty, transfer tax, and legal fees. Most clients and particularly those overseas may not be aware of these costs, leading to financial strain.

Therefore, this is another important point to consider when choosing the correct price. Most vendors don’t consider the expenses associated with selling the property and might end up with way less than they expected because the property was not valued properly.

Remedy: Obtain a professional valuation from a licensed appraiser in Jamaica. If you’re overseas, request a detailed report with photos and market comparisons to help you make an informed decision.

4.    Fraud and Scams

The most significant challenge faced by vendors is property fraud. This has been a problem for decades. Over the years, the government has introduced several pieces of legislation in an effort to tackle property fraud. Notwithstanding, the rise in technology has given way to a new type of fraud that is perpetrated by scammers posing as legitimate buyers or sellers. Overseas vendors may be particularly vulnerable to fake payments or fraudulent documents.

Remedy: Work with reputable real estate agents and attorneys in Jamaica. Verify the identity of the purchaser and ensure all payments are made through secure, traceable methods. Avoid accepting cash or informal payments, especially if you’re not physically present in Jamaica.

5.    Lack of Legal Representation

The most important step in any property transaction is choosing an attorney that you can comfortably work with. Attempting to navigate the property sale process without legal representation can lead to costly mistakes and legal disputes. This is especially risky for overseas vendors who may not be familiar with Jamaican property laws.

I always tell my Clients, “Its best to do the right thing the first time because you will spend a lot of time and money to correct your mistakes.” I cannot tell you how many matters I have been engaged in where property was sold without any legal representation. Usually, persons feel they can circumvent the process and do things on their own. Eventually, they have to seek legal representation because they realize that the process is even more complex than they imagined.

Furthermore, being overseas can make it even more difficult to stay informed and involved in the sale process. Delays in communication can lead to misunderstandings and/or missed opportunities.

Remedy: Engage a qualified attorney in Jamaica to handle the transaction. You can confirm an attorney’s status by checking the General Legal Council’s website to ensure that they are duly enrolled.

Also ensure they are experienced in dealing with overseas clients and can provide regular updates via email or video calls. Establish clear communication channels with your attorney and real estate agent. Use email, WhatsApp, or video calls for regular updates. Ensure all agreements are documented in writing to avoid misunderstandings.

By addressing these concerns proactively, overseas vendors can minimize risks and ensure a smooth and profitable property sale in Jamaica.