CONVEYANCING

This guide is for information purposes only. Its aim is to explain the basic procedure with regard to conveyancing in Guernsey. A fuller guide is available from F Haskins & Co on request by e-mail or post.

Conveyancing is the term used to describe the transfer of any property in Guernsey. The purchase and sale of such property normally follows a set procedure first involving the signing or execution of Conditions of Sale.

Conditions of Sale usually follow the format set by the Guernsey Bar. With this format Conditions of Sale are binding upon execution by both the vendor and the purchaser and on the payment of a deposit to the stakeholder.

Conditions of Sale may be signed with an operative date. This has the effect of binding both parties to the sale and purchase but allows the purchaser to withdraw for certain special reasons identified in the Conditions of Sale. Special reasons cover matters such as licence, property, survey and finance.

The reference to the licence is a reference to a housing licence. Dwellinghouses in Guernsey may be either Open or Local Market. A Guernsey qualified resident may occupy Local Market accommodation. A non-qualified resident must either obtain a housing licence to reside in Local Market accommodation or purchase Open Market accommodation.

Property matters refer to an Advocate’s report concerning title to the property and all matters concerning the property such as rights and servitudes (eg rights of way, drainage rights, access rights).

The reference to survey quite simply refers to a survey which the purchaser would normally obtain. If a purchaser is borrowing money from a bank or other lending institution then such survey is generally an obligation imposed by such institution.

The reference to finance refers to the financial ability of the purchaser to proceed with the conveyance.

The time scale for completion of a conveyance in Guernsey usually allows a period of a minimum of four weeks from the signing of Conditions of Sale until completion. This four week period coincides with the 28 days that is required by the States of Guernsey Income Tax Authority for the issue of a Dwellings Profits Tax exemption certificate (" DPT"). In certain circumstances a vendor can be liable to such a tax.

Generally a transaction is exempt from DPT if the vendor has owned and occupied the property for at least 12 months prior to the date of the sale. If the vendor has not occupied the property for 12 months or more, the sale transaction will still be exempt if the vendor has owned the property for at least 5 years.

There are certain other exceptions and F Haskins & Co can provide further advice upon request.

SHARE TRANSFER

Share transfers are not strictly conveyances in that the transfer of shares in a company does not transfer the ownership of the property. Rather the property remains vested in the company and it is the ownership of the company that changes.

Share transfers are mentioned here because there are a great number of properties in Guernsey owned by companies. In such cases, the most common method of transferring the ownership of the property is to transfer the ownership of the company which in turn owns the property. The significance of such a transfer is that there is a saving in respect of certain duties.

When acquiring a property by share transfer, it should be borne in mind that the company may have debts and obligations. A full check is therefore required in respect of the company to ensure that a purchaser of the shares in the company is not acquiring the ownership of an insolvent or heavily indebted company.

Further information regarding conveyancing and a guide to the purchase of dwellinghouses in Guernsey, is available on request. We are also able to provide advice on all aspects of conveyancing.