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June 2005 The excitement of purchasing your home in paradise!  The purchase of a home whether a primary residence, investment property, or a vacation home is usually one of the defining moments of a lifetime. Homeownership brings with it feelings of comfort, stability, excitement, as well the opportunity for substantial financial growth. When considering taking the emotional and financial leap that is homeownership it’s important to understand some of the basics of the process and potential obstacles to avoid. Owning Property Buying a piece of real estate is different from other types of purchases because instead of purchasing an actual object like a car or a boat  what you are really acquiring is the title to a property, the right to exclusively own, occupy and use a particular space.  There are various types of rights that a purchaser can acquire and each Caribbean nation has its own laws governing these rights.

Third Party Escrow

Another important issue to address when acquiring real estate is how to transfer funds safely and efficiently.  Most real estate transactions involve large sums of money paid in multiple deposits over the course of several months. Most prudent sellers want potential buyers to make deposits to show their level of seriousness before the title is transferred. However, equally prudent purchasers are not comfortable giving deposits directly to a seller or even a seller’s real estate agent, as there is limited protection or means of recourse should a dispute over the property or funds arise.

For that reason an independent third party is needed. An independent third party, also known as an escrow agent, holds funds on behalf of a potential buyer and disburses them to a seller once the terms in a pre-signed agreement have been met. Utilizing and escrow service helps minimize the risks associated with funds being transferred to a seller before all of a transaction’s details are finalized.

Buying real estate in the Caribbean is an exciting opportunity and if handled appropriately, it can be a rewarding and enjoyable experience. 

Principles To Help Buyers Avoid Risk

1. Determine if the seller has legal ownership of the property and if it can be transferred legally 

2. Hire an attorney/solicitor to search the ownership status back to the sovereign

3. Have your legal counsel review the purchase/sell agreement, which usually determines the transaction’s terms and conditions

4. Arrange for an escrow company or attorney/solicitor to handle the escrow of funds

5. Utilize your counsel to assist you with filing appropriate land holding licenses and transfer documents 

6. Obtain a property ownership guaranty from a title guaranty company to protect against recording errors, liens, encroachments, taxes, fraud, misrepresentation and other ownership issues

7. If the property is a condominium, examine the documents creating the condominium covenants, conditions, and restrictions
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Give Careful Consideration To Each Of The Following

1. Legal Status of the property

2. Ownership of property

3. Purchase/Sale Agreement

4. Deposit of monies

5. Filing of appropriate licenses

6. Payment of stamps, taxes, etc

7. Closing of the transaction

8. Recordation of the property

These guidelines, together with the right professional advice, can make buying property in the Caribbean – and elsewhere – the pleasure it should be.
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J. Brad DeLoach is General Manager of Stewart Title Eastern Caribbean. He can be contacted at his Office: 264-497-0800 Mobile: 264-476-5543 US: 908-320-0338 or by email bdeloach@stewartcarib.com. Stewart International provides title insurance and related information services required for settlement by the real estate and mortgage industries through more than 7,800 policy-issuing offices and agencies in the United States and international markets. Stewart also provides post-closing lender services, automated county clerk land records, property ownership mapping, geographic information systems, property information reports, flood certificates, document preparation, background checks and expertise in tax-deferred exchanges.

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