If you are thinking of purchasing a house or a parcel of land, there are several steps to follow and many things to consider. Although the National Land Agency (NLA) is present at the start and end of the process of transferring a land title, they share important information that potential home buyers and sellers will find valuable beforehand. Manager of Adjudication Services at the NLA, Chalene Laughton, recommends the best practice of both the vendor and purchaser securing the services of separate attorneys-at-law. There are legal requirements within the process such as the verification of both parties and the manner in which the purchaser came to know of the property for sale. The NLA’s Land Titles Division at 93 Hanover Street in Kingston, also referred to as the Tiles Office or Office of Tiles, presents itself as the first stop in the process. Firstly, the purchaser should visit the Titles Office and conduct a search of the register. “You will get a copy of the title to ascertain if the ownership on the certificate is what was represented to you. It is just to ascertain some basic facts for yourself. You will need to know if there are any encumbrances – caveats, mortgages or court orders, which are the three main things that would impede a title transfer from going through,” Ms. Laughton tells JIS News. While a mortgage can impede the process, it does not stop a title transfer from going through. However, the vendor’s attorney must inform the mortgage institution how the mortgage will be paid, for the institution to discharge the mortgage. The purchaser and their attorney should also verify the identity of the vendor, as will the vendor’s attorney, and follow up on the process of sale as it is carried out. The vendor’s attorney, however, has the carriage of sale and is responsible for the preparation of the Agreement for Sale (also called the Sale Agreement) which is the contract detailing information about the sale. “This will have the parties’ particulars, so name, address, occupation, [tax registration number] TRN for both transferor and transferee [vendor and purchaser, respectively] and the consideration or purchase price. If a real estate agent was involved in the transaction, it will state that person’s name or the company and the percentage that they are to get from the sale. It tells the time for completion, if there will be a penalty if it is not completed within the time and it tells the deposit that is to be paid by both parties,” Ms. Laughton shares. The Agreement for Sale is equally paid for by both the purchaser and the vendor and the industry standard is currently $100,000 but it can be higher or lower based on various factors. Once received, the purchaser’s attorney then reviews the Agreement for Sale and has dialogue with the other party on the favourability of clauses until both are satisfied. Once the agreement is signed, the purchaser pays the deposit, which is usually 10 per cent of the consideration or sale price. The signed contract is then sent to the Stamp Office where both vendor and purchaser share the Stamp Duty cost of $5,000. The vendor also pays the Transfer Tax which is two per cent of the purchase price, when instructed to do so by the Stamp Office. If the transfer of title is not being done as a sale, meaning there is no monetary consideration, then the Stamp Office calculates Transfer Tax on the market value of the property. This entails having valuers assess and value the property. Additionally, if in their assessment the Stamp Office deems the purchase price as low, then Transfer Tax is calculated on the value determined post assessment. The process of getting the Agreement for Sale stamped can take up to three months. Ms. Laughton advises that the information listed in the agreement should match those of supporting documents or the Agreement for Sale will generate a Requisition or Bounce Note. This means having the names of the vendor and purchaser appear the same as they do on their TRN cards. Additional documents include, but are not limited to, a water bill showing up-to-date payment for water on the premises and a Certificate of Payment of Taxes. She points out that “Taxes and water run with the land. It does not matter who is the owner of the land. So, if you buy it with an outstanding water bill, it becomes yours. If you buy it with outstanding property taxes it becomes your responsibility.” Once the Agreement for Sale is stamped and collected from the Stamp Office by the vendor’s attorney, they then prepare the transfer documents and submit those to the Stamp Office to be cross-stamped. At the end of the title transfer process is the NLA’s Land Titles Division or Titles Office where the new owner information will be registered. “When the transfer comes back, if it is a cash sale, the vendor’s attorney submits it along with the duplicate Certificate of Title to the Titles Office for registration. The vendor’s attorney then makes contact with the purchaser’s attorney for the registration fee to Titles Office which is 0.5 per cent of the consideration and is shared between the purchaser and vendor,” Ms. Laughton explains. “If it is a mortgage though, the vendor’s attorney sends the duplicate Certificate of Title, the cross stamped transfer and the Transfer Tax Certificate to the mortgage company, because they are the ones who are going to lodge it at the Titles Offices,” she adds. Once received by the National Land Agency and the registration fee is paid, the purchaser’s name can be added to the Title within five working days. At this point, the land title is transferred from vendor to purchaser. However, if a mortgage institution was engaged in the purchase of the land, the purchaser would have a few more steps to complete, in keeping with the mortgage institutions processes.
