MCGREGOR
Most Jamaican industries are subject to some form of regulation, and the real estate industry is no exception. The Real Estate (Dealers and Developers) Act, which came into effect in 1988, is intended to protect the public and to provide minimum standards to which practitioners and functionaries within the real estate industry, including developers, are to adhere.
Gated communities, town house complexes and apartment buildings now dot the Jamaican landscape, and in many cases, purchasers enter into contracts with developers and pay substantial amounts of money before such schemes are completed. For the purchaser, the investment of a lifetime could become a nightmare if the development of the scheme is not closely monitored. The Real Estate Board, which was established under Section 4 of the act, helps to protect the public in this regard.
As long as a scheme consisting of six or more units has been approved by the local planning authority, and it is intended for resale, the developer should apply to the Real Estate Board for registration as a developer of the approved scheme. In making this application, he will be required to submit copies of stamped approvals and plans to the Real Estate Board and pay the prescribed fees.
If the developer of the scheme is registered with the Real Estate Board, the purchaser may be able to verify a number of very useful pieces of information, such as:
The name and address of the developer.
Ownership of the land being developed.
Estimated cost of development.
Proposed arrangements for sale of the units.
Start time and estimated completion date.
Evidence of approval of the scheme.
Evidence of financing for the development.
Copies of contracts entered into with potential purchasers.
Most importantly, the act contains provision to protect the money of purchasers in the hands of a developer. The developer will not be able to whittle the money away because he must deposit all sums received under such contracts into a trust account in a bank or other financial institution, and any interest earned on that money must be for the benefit of that purchaser.
In addition, the Real Estate Board will monitor the trust account and the scheme throughout the course of the construction and the developer will only be able to access those funds under certain conditions. The withdrawal will be allowed:
If the money is being deposited to another account
To pay stamp duty or transfer tax
As partial reimbursement of 90 per cen of material cost and work done on the contract, in which case he must register a charge on the title in favour of Real Estate Board.
(For more information about the Real Estate Board, you may visit their website at www.reb.gov.jm.)
Sherry-Ann McGregor is a partner and mediator with the firm Nunes, Scholefield, DeLeon & Co. Send feedback and questions to lawsofeve@yahoo.com.
