- The Real Estate Board (REB) is cautioning Jamaicans against purchasing lots from developers in unregistered development schemes.
- While there are risks involved in purchasing lots in both a registered and unregistered development schemes, making purchases from an unregistered scheme, is significantly greater.
- There is no guarantee that the unregistered person selling the lot has the requisite authority to offer it for sale.
The Real Estate Board (REB) is cautioning Jamaicans against purchasing lots from developers in unregistered development schemes.
According to the REB, while there are risks involved in purchasing lots in both a registered and unregistered development schemes, making purchases from an unregistered scheme, is significantly greater.
Inspector of investigations at the REB, Pete Francis, told JIS News that in addition to being illegal under the provisions of the law and punishable through the courts, there is no guarantee that the person selling the lot has the requisite authority to offer it for sale.
“When a development is registered there are certain procedures that must be followed when dealing with a purchaser’s money. A trust account must be established and those monies received under a pre-payment contract must be placed in the trust account,” he said.
He further explained that the developer should not have access to these funds unless he provides a quantity surveyors report to prove that work has already been done in that development scheme, or that material has been supplied.
“If the individual who is proposing to sell the land does not pass the fit and proper criteria the REB would not register that person,” he told JIS News.
A ‘fit and proper’ person is one who has not been convicted of fraud or dishonesty, or has had an order of bankruptcy made against him/her which remains in force.
Mr. Francis is advising that there are a few simple steps that potential purchasers need to observe before deciding on, or finalising payments for a lot. These he says will prevent a failed or compromised transaction.
“First of all you have to determine whether the lot is part of a development scheme. If the land is part of a development scheme, registered developers have a responsibility to display all the approvals from the relevant authorities with the conditions of approval. Basically you need to ensure that the individual who is offering you the lot for sale supplied the necessary approval documents,” he outlined.
Other steps to follow include examining the contract thoroughly to ensure that it satisfies the buyer’s requirements. Mr. Francis said if a potential purchaser is unsure about the jargon of a contract they should seek legal advice.
He also urged buyers to ensure that they conduct an inspection of the property, “Before you enter into that contract do your due diligence checks. Look at what is being offered for sale, check if any work has started (or been done) on it and if you are not comfortable with anything that is being told to you contact the Real Estate Board for any information they might have on that particular development,” Mr. Francis told JIS News.
He further advised that potential purchasers can contact the REB for advice. This concern he adds is not restricted to development schemes as single land holdings, lots, private ownerships, and other property that are being offered for sale, should undergo the same scrutiny.
“You need to ensure that whatever purpose you are proposing to buy this land for can be done,” he cautioned.
Mr. Francis explained that some parcels of land may not be appropriate for certain purposes, and that the National Environment and Planning Agency, the Mines and Geology Division, or any other authority may not approve the land for specific purposes.
“You also need to ensure that your access is not going across someone else’s property,” he noted.
Securing the services of a qualified and registered land surveyor is advisable at all times to ensure that a title can be acquired for the property.