26.09.12

Guarding Your Real Estate Investment

Real estate transactions are exciting, so much so that the business of buying and selling real estate has formed the substance of several very engaging and entertaining TV shows. We become consumed with watching house-hunters, investors and many property virgins seek to acquire real estate for various purposes. What is usually not revealed in many of these TV shows is the hard behind-the-scenes work which goes into ensuring that these transactions are actually legally and commercially sound.

The business of real estate is a serious one, particularly in today's reality when real estate prices are seen as 'ridiculous' by many. As such, when you decide to invest millions, of mostly borrowed money, to acquire real estate, whether as a residence or for business, you must be 'ridiculously serious' about your investment. There are certain enquiries that must be made and investigative steps which, especially as a purchaser, you must take. For example, you can ill afford to overlook the need to have a title search done and conduct a survey of the property at the outset.

There are two types of titles to land in Jamaica; registered and unregistered. A registered certificate of title is the document created by the Titles Office. Under our system of land registration, the certificate of title represents absolute, valid and indefeasible ownership by the registered proprietor of the land contained in the certificate. The government is the custodian of all title records. Therefore, when you are issued with a certificate of title by the Registrar of Titles, it is called a "duplicate certificate of title" because the original must be retained at the Titles Office as stipulated by the Registration of Titles Act. For unregistered land, there is common law title, usually a deed of conveyance which indicates ownership. This common law title may be formalised and made official through the issue to the land owner of a registered title when the necessary steps to bring the land under the operation of the Registration of Titles Act are undertaken.

Whether you are purchasing registered or unregistered land, great care should be taken to investigate title, bearing in mind that the investigative steps are generally far more extensive in the case of unregistered land. In this case, ensuring that the vendor can prove good title and can establish that there are no defects in the chain of title will go a far way in avoiding potential headache, heartache, litigation and losses. These are ills which may beset you in the event you find yourself locked in at the advanced stage of a transaction with persons who do not possess good title to land that they assumed was theirs.