When it comes to purchasing a property that was built some years ago, or one that is a unit and not part of a complex, buyers can expect to get their title deeds almost immediately, with the procedure needed being very similar to one used in the UK. It is however advisable, that a purchaser appoints a local lawyer as their legal representative. The lawyer will begin with a search and if the results are considered to be satisfactory, then the two parties can immediately continue with the exchange of contracts. After the exchange the vendor should provide the title deeds without any further delay.
In the case of a property under construction, or just completed or when purchasing part of a project, the procedure needed for the acquisition of title deeds is slightly different and certainly more time consuming. In these cases, the Title Deed to the property is not delivered immediately, and might take 3-4 years after the project is completed before it is issued.
However, if your legal representative follows the procedures listed underneath, there is no reason why you should not feel safe about the final outcome.
1. The first step is to conduct a search in order to confirm whether or not the land where the project is being built or has just been completed is clear of any ecumbrances, such as mortgages, leases, easements, liens, or restriction, that will lessen its value.
2. Your lawyer must make sure that all stage payments are in direct accordance with the progress of the project.
3. Another vital step is to the ensure that the contract of sale has been stamped by the tax office and has been lodged with the Land Registry for specific performance purposes. This is of high importance to the final outcome, because it ensures that the property is blocked and the seller is forbidden to sell or transfer it to a third party, or even mortgage it.
But what happens when a developer suffers financial problems? In cases like this, it’s worth noting that the buyer’s interests are satisfied first and then the banks. As a general rule, banks avoid mortgaging the property by the seller.
If for whatever reason, the contract of sale has not been lodged with the Land Registry, the purchasing party does not have the right to sue the vendor requesting the specific property. Instead, they can only claim the market value of the property, as it is calculated at the time of breach.
By lodging a contract with the Land Registry office the amount payable for transfer fees (stamp duty) which are payable when the purchasing party acquires the title deed, are not only secured, but also restricted. In effect this means that in the case of a dispute, the land registry is forced to consider the value of the property as it was calculated at the date of the contract. This protects the buyers, ensuring they are not forced to pay excessive amounts of transfer fees based on valuations made at a much later date than that of the time of purchase.
If a contract is not stamped within 30 days of signing, a penalty occurs and is added to the stamps duty. Within 60 days of signing, a contract must also be lodged with the Land Registry office. If not, then the right to lodge has been lost for ever. Understandably this is a time consuming procedure, especially given the fact that government departments are very busy. It is worth noting however, that a property owner still has the right to sell a property, even without a separate title deed. In this case, a cancellation contract between the original purchasers and the vendor must be drawn up, as well as one between the seller and the new buyers.
At the time of purchase, buyers must agree on the cancellation fee a developer will charge should the purchasing party decides to sell the property before a separate title deed has been issued. To avoid any problems, it’s always advisable that this agreement between buyer and vendor is included in the contract of sale.
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