Legal Requirements for Selling Property in Different Caribbean Countries

Legal Requirements for Selling Property in Different Caribbean Countries

Owners seeking to sell their property in the Caribbean should not overlook one of the most important aspects. Marketing, listing, and promoting are key, yet they all depend on one single factor: legal requirements. 

Sales and transfer processes can be delayed if you are not aware of legal nuances, if you miss a signature, or if you fail to inform the municipality of recent additions. In line with this, the process can be costlier than you thought if you are not fully aware of the taxes and fees entailed. 

It’s better to know all these details in advance and avoid wasting time and money. 

Selling your House in the Caribbean: How to Prepare Yourself 

We’ve recently discussed how to prepare your house for sale, stressing the importance of good cleaning, decluttering, and staging. Yet, this is only half the deal, as there are many aspects that you may not be aware of. 

Property taxes, capital gain taxes, documentation, certificates, agreements, and various types of fees will be involved, and, in some cases, licenses. 

So, the soundest piece of advice is that you find out all the conditions from a lawyer or reliable official sources. This should be done from the moment you decide to sell, as you don’t know how much time the paperwork will take. 

First Things First: Should I Hire a Lawyer?

One of the first decisions will be whether to hire a lawyer. This choice will save the seller from taking care of things that are challenging and time-consuming for a layperson. Such advantages aren’t for free, so it’s for the seller to decide whether paying legal fees is worth the time they save and the headaches they avoid.

However, some countries make this decision for you. 

In places like Barbados, St Lucia, and Grenada, hiring an attorney is mandatory for all real estate sales. In others, like the Cayman Islands and Trinidad and Tobago, it’s not mandatory but highly advisable. A legislative history based on common law plus recent updates creates an intricate system that only the pros can navigate effectively. 

Some Legal Requirements to Contemplate When Selling in the Caribbean 

The Complexity of the Common Law System in Trinidad and Tobago

If you are selling a home in Trinidad and Tobago, you’d better book a legal consultation and find out whether it’s registered under the common law system or under the newer Real Property Act. 

These two have opposite approaches to certifying and establishing ownership. Interestingly, this difference concerns the buyer more than it does the seller; nevertheless, it’s better to be fully informed.

Common Law vs. Real Property Act 

Under the common law, ownership of property is demonstrated through a “chain of deeds”, that is, tracking its history over the past 20 years. In simple words, this means demonstrating that every transfer was clean. If somewhere along the chain a seller had an equitable title and not a legal title, the deed wouldn’t be marketable. The same goes for property transferred while still on probate. 

Sounds complicated? It is. However, approximately 75% to 80% of property in Trinidad and Tobago is registered under the common law, as the RPA is relatively new. It was established in 1946 based on the Australian Torrens system. 

The type of title doesn’t change much for the seller: it means more work for the buyer. The buyer’s team will be responsible for conducting due diligence on the deed. 

If your house is under the RPA, the title itself is proof that you are the indisputable owner. Such titles are duplicated, with the original remaining in the land registry and the copy in the owner's possession. 

Flexibility for International Investors in Barbados

With no restrictions on foreign ownership and no capital gains tax, it's not uncommon to find international investors buying and selling in Barbados. Selling property in Barbados isn't entirely tax-free. The country levies a Property Transfer Tax (2.5%) and a Stamp Duty (1%) on the transaction. However, these are transaction taxes based on the sale price, usually paid by the vendor (seller), not a tax on the gains themselves. Another advantage is the possibility of repatriating funds, in which case, the seller must register the funds with the central bank at the moment of the transaction. 

This flexibility is counteracted by the strict obligation to hire a lawyer. Many see this as a plus because the help of a professional is highly necessary in a country like Barbados, where a large portion of the land remains unregistered. 

Intricate History Results in a Complex Legal System in St Lucia

St Lucia is a true representative of the cultural complexity of the Americas. Those who know some history are aware that the Caribbean was contested by several powers during colonial times. This can be seen in Florida and Puerto Rico, territories that belonged to the Spaniards, then to the English, then to the Spaniards again, and finally to the United States. 

This is modest compared with Saint Lucia, which oscillated from the British to the French colonists 14 times. This resulted in a complex legal system.

Today, the primary source of property law in St Lucia is the civil code introduced in 1879, and the land registration system, introduced in 1984. 

By law, all transfers must be conducted before a notarial lawyer whose main responsibilities consist of explaining the agreements to the parties, verifying their identity and capacity, conducting title research, and drafting the agreements. 

When selling to a foreigner, sellers should verify that they have the required license. All foreign citizens buying real estate on the island must hold an alien landholding license, which is obtained in two stages: a due diligence to certify eligibility, and a license certificate that can be issued for 1 or 10 years. 

Be Responsible and Prevent Issues at the Time of Selling in Jamaica

Every owner who plans to sell in Jamaica should be aware of various covenants before modifying their houses in any way. Breaches are a serious issue, and at the time of selling, they are 100% the seller’s responsibility. 

The law requires obtaining a surveyor’s identification report before building a fence, a veranda, or a retaining wall. And if owners make any additions or structural changes to the house, they must submit a building plan to the parish council.

If everything checks out, the sale can be done seamlessly, usually within 30 to 120 days. Both parties are subject to tax, and the vendor is obligated to pay transfer tax and stamp duty. 

If you are not hiring a broker in Jamaica (which is optional), make sure that the buyer submits a qualification letter issued by a reputable financial institution. This confirms that they have the financial means to buy real estate or are in a position to obtain a mortgage. 

General Requirements and Documents to Consider when Preparing for a Sale

The following is not a list of a specific country but reflects the requirements that are commonly found in these transactions. Let this serve as an overview of what awaits, before the details are confirmed with the legislation of each specific jurisdiction. 

• Land register

• Title or deed

• Cadastral  plan

• Map sheet

• Clearance documents on property and income tax

• Proof of absence of encumbrances or pending mortgages

• Clearance of up-to-date utility payments

• Clearance on payment of all due taxation up to the date of selling 

• Specific licenses (like alien landholding licenses)

• Documents proving the seller's ID and address (pictures, IDs, and proof of address)

Exploring these four nations helps illustrate a general picture of what it takes to sell real estate in the Caribbean. Now, all there is to do is find out the details of the specific country. 

Besides conducting their own research, sellers could choose to rely on a legal expert, which can be the safest path and a way to take the heaviest burden off their shoulders.  

So, do your homework and get ready to sell your house! Good luck!