Purchase of Flying Freehold
Under the old common law of Jersey, whoever acquired the land was deemed to own it from the centre of the earth to the centre of the heavens and for that reason, one could never acquire a flat in a block of flats by way of conveyance only by way of share transfer. The Loi (1991) sur la Copropriété des Immeubles Bâtis (flying freeholds) makes provisions to acquire flats by way of conveyance before the Royal Court. It is therefore possible to obtain a mortgage to finance the purchase. The Law and Regulations seek to achieve a situation where each co-owner is, as near as possible, in the same situation as he would be if he owned a house. A sale of a flying freehold unit is governed by the Housing Law and any purchaser must possess the relevant residential status.
Reaching an Agreement
The parties usually proceed directly to a contract passed before the court without the benefit of a preliminary agreement to sell. However, where required, a preliminary agreement can be drawn up providing a measure of protection for both vendors and purchasers against a change of heart.
The Association of Co-owners
The Association of Co-owners is created as soon as there are two or more separate owners of units in the same property and membership comes automatically with ownership of a unit. Each member then becomes a joint owner of all the common parts of the relevant property. On purchasing a flat, the Purchaser’s rights are limited by the Declaration of Co-Ownership of the Association which relates not only to the common areas but also to the use of the flat, noise levels etc. The Contract of Purchase sets out the description of the property, the rights and obligations of the owner and that the owner is bound by the declaration. The contract of purchase is registered in the Public Registry.
Legal fees are negotiable.
In addition to the legal costs there will be stamp duty based on the value of the realty payable to the Treasurer of the States on conveyances passed before the Court and this is computed on a sliding scale, see Stamp duty on property purchase/transfer and death. There are reduced costs for first time buyers.
Where money is borrowed and secured by a charge over the property, the provisions relating to stamp duty become more complicated as stamp duty is payable on registering the charge.
A flying freehold unit can be left in a will of realty. A person inheriting such a unit is permitted to live in it even if they do not have the required residential status.