5 Key Concerns for Property Purchasers

Buying property in Jamaica is an exciting investment for both local and overseas purchasers. Most Jamaicans look forward to owning their own home and spend years working towards that goal. In addition to locals who are looking to purchase a home, we also have Jamaicans living in the diaspora and non-nationals who want to purchase their own slice of paradise for a vacation home or rental income. However, the process can be fraught with challenges, particularly for those unfamiliar with Jamaican laws and procedures. Below, I’ve outlined the most common concerns for property purchasers and how to navigate them.

1.    Incomplete or Disputed Title

A defective title can result in ownership disputes or the inability to secure financing. Purchasers may unknowingly acquire property with unresolved claims of interest that others may have in the property. One of the most frequent issues that I’ve come across is where vendors have put a property up for sale but they have not yet obtained a title. For example, vendors may present a diagram or a survey. These are not substitutes for a legal title. Another example is where vendors will provide a parent title but they have not yet obtained splinter titles or approval for a subdivision.

All of these can pose significant challenges for purchasers and can result in significant delays, additional unexpected costs or a total loss of investment.

Remedy: Conduct a thorough title search at the National Land Agency (NLA) and engage a qualified attorney in Jamaica to review the title documents. Ensure there are no outstanding claims on the property. Request scanned copies of all documents for your records.

2.    Zoning and HOA’s

Generally, the municipal corporations and the National Environment Planning Agency (NEPA) govern how a property is zoned and how it is to be used. Properties may be subject to zoning restrictions or planning regulations that limit their use. For example, properties may be designated for agricultural, commercial or residential use.

In addition to these two governing bodies, gated communities are usually managed by a homeowners’ association (HOA) or a management company.  In recent years, several homeowners have been faced with litigation in cases where they used property for Air BnB rental in contravention of the management rules laid out by the HOA.

In my experience, I have found that persons are generally unprepared for how strict HOA’s can be. They simply do not understand the responsibilities and obligations that come with purchasing property in a gated community. For example, you can only paint your house in approved colours, you must pay your maintenance on time and you may be asked to share the expenses of maintaining the community by paying other fees as calculated by the HOA.

Remedy:  Verify the property’s zoning classification with the local municipal authority and ensure it aligns with your intended use. Obtain all necessary permits before completing the purchase. Your attorney can assist with this process.

Ask your attorney to go through the Homeowners’ Agreement with you to ensure that you understand all of your responsibilities and ask question if you are unsure what certain terms mean.

3.    Hidden Defects

Some properties may have structural issues, environmental hazards, or other defects that are not immediately visible. As a result, purchasers may inherit costly repairs or legal liabilities.

Remedy: Visit the property in person. Walk through the premises so that you can ascertain whether this is the property you really want. If you cannot visit the property in person, consider appointing a trusted representative to oversee the inspection.

In some instances, you may need to hire professionals to help you to determine if the property is

(a) structurally sound and (b) fit for use.

You may require the services of structural engineer, valuator and surveyor especially if this is a property being purchased with a mortgage.

4.    Delays in the Conveyancing Process

The conveyancing process in Jamaica can be lengthy and complex, often due to bureaucratic inefficiencies, incomplete documentation, or disputes. In my experience, both cash and mortgage transactions can be plagued with this issue.

For the most part, clients are not prepared for how many documents they will need for each step of the process. For example, you will need to provide the National Housing Trust with a list of documents before you can get your pre-approval letter. After that, the bank will require another host of documents in order to process your loan. Thereafter, your attorney will require a similar set of documents in order to conduct business on your behalf.

Remedy: Consult with an experienced attorney who will walk you through the steps and highlight red flags before your commit to a property. Ensure all required documents are prepared and submitted promptly. At each stage, you will be required to submit time sensitive documents and failing to do so will cause additional delay.

5.     Financing Challenges

The most frustrating challenge for purchasers happens when they have set their hearts on purchasing a piece of property and they have saved for many years to get it but the deal falls through because they did not budget for all the associated expenses.

Remedy: Consult with your attorney to understand all applicable taxes and fees. Budget accordingly to avoid surprises. Ensure you have a clear breakdown of all costs before proceeding with the purchase. I usually ask my Clients to have at least 15-20% of the value of the land to cover associated expenses and closing costs.in some instances, it works out to be less but it’s always best to have more than you actually need.

Finally, purchasing real estate in Jamaica can be stressful and expensive. With such an expensive investment, it is always best to conduct proper research to ensure that you get value for money.