Thinking about making a real estate investment in Jamaica? Here are some quick, key steps and guidelines for buying Jamaican Real Estate.
- 1. Know your dough- How are you funding the purchase?
Have a budget and know your source of funds. If you are purchasing with cash, great! If you plan to buy with a mortgage, you should get pre-qualified by a local financial institution so you know how much financing you are likely to secure.
- 2. Search & choose wisely- Identify the property that is right for you.
Real Estate is advertised for sale in Jamaica through a number of mediums, including in the local newspapers, through the Realtors Association of Jamaica’s Multiple Listing Service (MLS), through Real Estate Dealers, through signs, and by word-of-mouth. It is advisable that you work with a duly licensed Real Estate Dealer or Salesman to assist you with exploring your options to find the right fit.
- 3. Don’t go it alone- Get an Attorney
Ensure you have adequate legal representation in any real estate transaction. You should engage an attorney with the requisite knowledge and experience to help you with due diligence, to review all the documentation, and to be on the lookout for clauses adverse to your interest in these documents.
- 4. Do your homework- Conduct Due Diligence
Know the boundaries (get a Surveyor’s Identification Report), know the worth (get a Valuation report) and know your (potential) neighbours (learn about the community and adjoining owners if possible). It is also important to check for any potential encumbrances or breaches of the title, which your attorney and a surveyor can assist you with. If you are buying to carry out development on the property, consider getting development advice and/or conducting environment and planning due diligence in advance of purchasing.
- 5. Consider options for ownership.
If you are buying with others, consider how the property will be owned between the parties. You may even want to explore the pros and cons of having the property owned by a limited liability company that you control.
- 6. Make an offer with your terms
To avoid misunderstandings, an offer to purchase outlining the terms and conditions on which you are willing to buy, should be presented to the vendor or their duly authorised agent or attorney.
- 7. Enter into a contract
The vendor’s attorney will usually prepare an agreement for sale which should reflect the terms of the negotiated and accepted offer. You will generally be expected to pay a deposit on signing the agreement for sale. Most often vendors ask for a ten percent (10%) deposit but the deposit amount will depend on your agreement.
- 8. Budget for and pay your closing costs
Your attorney or realtor can assist you with calculating your closing and transaction costs, including Stamp Duty, Registration Fees, and professional fees. A good rule of thumb is to budget roughly five percent (5%) of the purchase price for these, though every transaction will be unique. If you are planning to furnish or make improvements to the property, you will want to budget for that as well.
- 9. Take possession
Possession of the property will be granted to you in keeping with the terms of the agreement for sale, and could be on completion of the sale, or earlier. It is important to understand the obligations and liabilities that flow from taking possession, and you should ask your attorney for advice on this.
- 10. Know your ongoing obligations & assert your ownership
Once you have acquired the property, you will be required to pay the annual Property Taxes. You may also have other ongoing obligations like paying a Homeowners Association or maintenance fee for the property. It is also important that you exercise and assert your ownership over the property by occupying it, bushing it, fencing it, etc. to ensure that it does not become the subject of an adverse possession attempt.
Ten bullet points can hardly sum up the technicalities of purchasing property in Jamaica. Your main takeaway from this guide, if nothing else, should be to engage the services of reputable and experienced professionals who will help you to strategise and optimise your real estate investment.
Gabrielle Grant Gilpin-Hudson is a Partner at Grant, Henry & Rhooms, and the head of the firm’s Property & Real Estate Department. She may be contacted at gabrielle@ghrlegal.com or www.ghrlegal.com. This article is for general information purposes only and does not constitute legal advice. Should you wish to seek legal advice, you may schedule a free consultation with our offices.
