Immovable Property: The issues Across sectors, across jurisdictions Monday 21 October 2013 The three bases of tenure for multi-unit properties in Jersey: Long leasehold, flying freehold and share transfer By Georgina Cook
Immovable Property: The issues Across sectors, across jurisdictions Monday 21 October 2013 HISTORICAL CONTEXT • Traditional maxims/rules of law • ‘He who owns the soil owns everything above and beneath it.’ • Impractical in modern life
Immovable Property: The issues Across sectors, across jurisdictions Monday 21 October 2013 THE SWINGING SIXTIES • Apartment blocks constructed • Horizontal division of property • Conflict with old maxims
Immovable Property: The issues Across sectors, across jurisdictions Monday 21 October 2013 SHARE TRANSFER • Transfer freehold to a holding company • Bespoke articles of association • Purchase block of shares, ownership of which gives exclusive right to occupy and use an apartment • Historic stamp duty saving - now closed by Taxation (Land Transactions) (Jersey) Law 2009
Immovable Property: The issues Across sectors, across jurisdictions Monday 21 October 2013 LIMITATIONS OF SHARE TRANSFER • Movable property • Creation of charges over shares difficult • States loans unavailable as no security over movable property
Immovable Property: The issues Across sectors, across jurisdictions Monday 21 October 2013 FLYING FREEHOLD • Loi (1991) sur la copropriete des immeubles batis • Established a basis for horizontal division of immovable property • Declaration of Co-Ownership • Ownership of a Private Unit and an interest in the Common Parts • Acquire title by contract passed before Court • Charges secured over flying freehold property
Immovable Property: The issues Across sectors, across jurisdictions Monday 21 October 2013 LONG LEASEHOLD • Not popular in Jersey • No statutory framework • Ability to create a charge over a lease not law until Loi (1996) sur l’hypotheque des beins-fonds incorporels • Jersey lending banks not familiar in lending against Jersey leasehold • Conversion to flying freehold of older leasehold apartments nearing end of term, rather than new long leases
Immovable Property: The issues Across sectors, across jurisdictions Monday 21 October 2013 SUMMARY • Share transfer and flying freehold most common tenure for horizontal division • Land Transaction Tax closed stamp duty inequality • Share transfer still popular if targeting non-local investors – no restriction on who can buy shares • Developments getting more complex – will long leasehold become more popular? • How will the three bases of ownership evolve?
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