A body who is the legal owner of the property being tendered for sale.
What is an Agreement For Sale?
This is the contract or agreement between the vendor and the purchaser. This agreement is binding in law and it determines the material terms binding the parties e.g. the deposit fee, the time period for payment of the balance of the purchase price, the closing date and any other necessary terms towards completion and release of the property to the purchaser with good legal title guaranteed.
On signing the agreement for sale the purchaser pays a deposit (usually 10% of the purchase price) which is usually held in escrow until certain conditions are met and/or even until completion of the deed of sale. Clauses included in the agreement for sale ensure that if the vendor pulls out of the sale or is unable to sell the property with good title then the deposit is returned to the purchaser. Additional remedies at law may be available to the purchaser depending on circumstances and how the agreement for sale was drawn up. If the purchaser reneges their deposit is usually forfeited. The main purpose of the agreement for sale is to ensure that the vendor retains the property for the intended purchaser thereby protecting his/her interest.
Before signing the agreement for sale the legal process is usually accompanied by in depth searches at the Land Registry to ensure that the property is not encumbered in a manner which cannot be cured within the period set for completion by the contract. Reputable estate agents welcome Registry searches to ensure that your purchase goes as smoothly as possible and according to the law.
A site visit is advisable by a trusted representative, estate agent or legal representative. The site visit can at times be beneficial as on occasion encumbrances may exist such as low lying high tension electrical cables, which can be an obstacle to building, the removal of which should be negotiated as a term of the agreement for sale.
All searches and enquiries are aimed to ensure that the purchaser obtains good title and legal title to the property in law.
Alien Landholding License
The Alien Landholding Licence is a document required by the St. Lucian Government for all people who wish to purchase land or property in St. Lucia and who are not St. Lucian citizens. It also applies to companies wishing to purchase land or property where the major shareholders are not St. Lucian citizens.
The Alien Landholding Licence is a permanent licence which does not require renewal. The Licence is granted for a specific property and is not transferable.
One of the conditions of an Alien Landholding Licence granted to purchase a lot of land is that building must commence on the lot within one year of granting of the Licence and be completed within two years. This is a standard clause but extensions can be applied for. All plans must be approved by the Development Control Authority before building any structure or for any change of use of an existing structure.
An Alien Landholding Licence must be registered by a local lawyer who will prepare and submit the application on behalf of the applicant. Applications are vetted first by the Physical Planning Office of the Ministry of Physical Development, Environment and Housing and then by the Attorney General’s Chambers before final approval by the Prime Minister.
In order to make an application for an Alien Landholding Licence each applicant would be required to supply the following:
- Four passport size photographs
- Police Certificate of Character from country of origin
- Bank reference
- Certified copy of passport
- Two personal references
- Employment status
- The non-refundable government application fee of EC$ 1,500
After approval of the Licence and simultaneous to its grant and registration there is an additional Government Licence Fee of EC$ 5,000 if the area of the land/property is under one acre and EC 10,000 if over one acre.
What is The Deed Of Sale?
The deed of sale is the document which transfers title of the property from the vendor to the purchaser.
After all the requisite taxes and stamp duties are met by the relevant parties the document duly signed in the presence of all the relevant parties, the Deed of Sale is then registered at the Land Registry of St. Lucia which gives the purchaser the title to the property, the right to enjoy the property and the right to dispose of it. If after having owned and enjoyed your property you then decide to sell it you then become a vendor and are liable for vendors’ tax at the rate of 10% of the sale price of the property (if not a citizen of Saint Lucia). Some solicitors advise purchasers to form a local company and to purchase their property in the name of the company so as to avoid this 10% tax when selling the property. Company formation takes approximately 1-2 weeks and costs on average EC$ 3,500. Please note however that the transfer of shares of a company on the sale of the company is subject to Inland Revenue evaluation/stamp duty and that the Government of Saint Lucia could at any time reverse the omission of the payment of the 10% tax if the company route is taken, signifying that a company may be required to pay a tax on property disposed on the transfer of shares. Legal advice should be sought about your particular and own circumstances.
Can the Legal practitioner represent both the vendor and purchaser?
There is no legal reason why the legal practitioner is not able to represent both parties. Therefore the simple answer is yes. Both parties interests are always represented with utmost privacy. In fact in most cases the process becomes easier when dealing with one legal practitioner and the legal costs are also lessened. Additional, at EREPM there are several legal practitioners who are available if any party requires individual attention.
What is the Vendor expected to pay to complete the process?
The vendor is required to pay a vendor’s tax to the Inland Revenue Department and usually agreements for sale ensure that this tax is paid immediately by deducting the relevant amount of the tax from the purchase price before the balance of the purchase price is paid to the vendor.
What are the fees would a potential purchaser be expected to pay?
On the execution and signing of the Deed of Sale a Government Stamp Duty is paid by the purchaser to Inland Revenue, Saint Lucia, at the rate of 2% of the purchase price of the property.
The Legal fees for the conveyancing process are worked out according to the Legal Practitioners’ Tariff as issued by the Bar Association of Saint Lucia and are calculated on a sliding scale of a percentage of the purchase price of the property with individual fees for the agreement for sale, the deed of sale and the Alien Landholding Licence Application. This fee will be communicated to the purchaser as soon as the property is identified.
Must the Parties both be physically present to sign the deed of sale?
If the purchaser or vendor is not able to be present in Saint Lucia for the signing of the deed of sale a power of attorney can be drawn up to enable the party to appoint another person to conduct the property purchase in his or her absence. It can be so worded that on completion of the purchase the power of attorney then becomes null and void.
As a non-national where would we stay before our transaction is completed.
We would be more than pleased to negotiate the best rates and as close as possible to your potential property. We have a variety of partners we work with to accommodate you during this time.