Purchase of Share Transfer
What is Share Transfer?
This applies to blocks of flats and larger properties containing several units.
The property is owned by a holding company. Purchasers acquire a block of shares in the holding company which entitles them to rights but limited by rules contained in the Articles of Association of the holding company. Completion is effected by the execution of a Share Vending Agreement, the issue of a new share certificate and an entry in the Register of Members of the holding company.
Once a shareholder, the client becomes responsible for a certain percentage of all communal outgoings.
Purchasers of share transfer property are able to take out a mortgage as the lender will take a charge over the shares under the Security Interests [Jersey] Law 1983.
Entitled, Licenced, Entitled to Work or Registered persons can purchase shares. The sale of shares is not generally governed by housing law, but at least one occupier must possess Entitled or Licenced Status.
It is recommended that clients use a lawyer to check the Share Vending Agreement, investigate the company and any restrictive clauses of the company. It is also important to establish that the company does not have any pre-existing liabilities. There are reduced fees for first time buyers.
Share certificates and Registers are not public documents.
The tax payable on a share transfer purchase is exactly equal to that which would have been payable under the Stamp Duties and Fees (Jersey) Law 1998 for freehold transactions. See Stamp duty on property purchase/transfer and death. There are reduced costs for first time buyers.
A property purchased by share transfer is classed as movable estate and must therefore be included in a Will of Personalty.
A purchase of property is not binding until the contract has been passed through Royal Court. Either party can drop out of the purchase at any point beforehand. A seller dropping out of a sale by accepting a higher offer from a different buyer is known as gazumping. A seller reducing their offer at short notice to create pressure on the seller to accept the lower amount is known as gazundering. Currently there is no protection against this in Jersey.