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Some things to know when buying property
Buying property is usually the largest single investment which a person makes in his or her lifetime. As there are usually hundreds of thousands of dollars at stake in these transactions, great care should be taken to ensure that the vendor (seller) is entitled to sell and that the sale itself is properly documented.
In Trinidad and Tobago, land can be either unregistered or registered. In the sale of unregistered land, the vendor represents that he has a proper title to the land, and the sale is effected by a registered deed after an investigation into the vendor’s title.
In registered conveyancing, the property is registered with the registrar general who provides a certificate of title for the property. The title is passed by endorsements made on the certificate which itself is conclusive evidence of who has title to the property.
In both systems of conveyance, one should always have a written agreement for sale before purchasing. This agreement sets out the parties to the sale, the price, the property being sold, the date by which the purchase should be completed, and the options both parties can explore in the event the sale falls through.
It is important to establish and determine that the vendor can legally sell the property. If the property is unregistered, the purchaser must investigate the vendor’s title. This is done by tracing the history of the property for the previous 20 years to ensure that the property was not transferred or mortgaged to anyone else and that the vendor is fully entitled to sell.
The vendor must also show that he has paid all rates and taxes. It is also highly recommended that the purchaser makes a physical inspection of the property to ensure that there are no other persons on the land with rights over it, which the vendor has not disclosed.
A deposit of ten per cent of the purchase price is usually required when the agreement for sale is signed, and before the investigation into the title takes place. This deposit is usually lost if the purchaser does not complete the sale owing to his own fault. However, it must be returned if the vendor is found to have a “bad” title to the property.
For a registered land, the investigation into the title is much simpler. The certificate of title will state the true owner of the property and whether that person is entitled to sell. A further search should be made in all instances to ensure that there are no judgments registered against the vendor, which can attach to all land owned by the vendor. In such a case, the property will be sold subject to the judgment.
Once the sale is complete, a deed of conveyance must be prepared if the property is unregistered, and this deed must be registered in the office of the registrar general. For registered land, an endorsement reflecting the sale must be made on the certificate of title, which must then be handed over to the new owner.
• This column is not legal advice. If you have a legal problem, you should consult a legal adviser.
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