Jersey: A Practical Guide To Property Law In Jersey

Jersey is the largest of the Channel Islands and is a self-governing British Crown Dependency with its own financial and legal systems and its own courts of law.

Jersey property law is derived from a mixture of local statute and customary (common) law. Jersey's customary law has evolved from Norman-French law and is primarily contained in the judgments of the Royal Court of Jersey and the writings of local and French jurists.

In Jersey law property is either "movable" or "immovable". These classifications are broadly similar to the English classifications as "personal" or "real" property.

Land in Jersey, together with any buildings or dwellings that may be constructed on the land, constitute immovable property. There are also certain other interests in land such as leases for a term in excess of nine years that are also deemed by law to be immovable property.

The principal local statute in relation to immovable property is the Loi (1880) sur la propriété foncière (the "1880 Law"), as amended.

All contracts relating to immovable property (whether transferring title, amending boundaries or creating specific rights) must be passed before the Royal Court of Jersey.

Types of property ownership

This guide is principally concerned with the following common types of property ownership, or tenure.

• Freehold – Whilst the term "freehold" is frequently used, it has no technical meaning under Jersey law. It is used to describe ownership in perpetuity (propriété a fin d'heritage) being the most comprehensive real right that a person can have in immovable property. It gives the holder the ownership or "title" to the land as well as everything above and below, subject to certain practical limitations and statutory exceptions.
  
  
• Flying Freehold – The laws governing private ownership of immovable property in Jersey were supplemented in 1991 by the "Loi (1991) sur la co-propriété des immeubles bâtis", commonly referred to as the "Flying-Freehold Law". This law provides for the division of multiple dwelling properties, such as purpose built blocks of apartments, in order for distinct units to be sold to private owners.
  
  In each case a bespoke and comprehensive document describing the subdivision of a development into private units and common parts is registered before the Royal Court. This document (known as the Declaration of Co-ownership) provides for the establishment of an Association of the various co-owners and includes certain rules and regulations governing the use and administration of the collective property.
  
  An owner of a flying freehold unit (also known as a "Share" or "Lot") has exclusive ownership and title to that unit together with a percentage interest in the collective property forming the development and the land on which it is established.
  
  As with freehold property, flying-freehold property is transacted by way of contract passed before the Royal Court.
  
  
• Share Transfer – While not technically a right of tenure in immovable property, many properties are subject to "share transfer" structures. Typically (although not exclusively) such structures apply to properties comprising a number of apartments or flats. Unlike freehold and flying freehold ownership, the freehold title of the property is owned by a Jersey company and purchasers acquire shares in that company which have attached to them certain express rights to use and enjoy a specific private unit.
  
  The property holding company will have bespoke Articles of Association which create specific rights of exclusive use and occupation over particular apartments or units forming part of the company's property. The Articles of Association will also set out the rights and obligations of the shareholders, both with regard to the private unit and the common or shared areas.
  
  The transfer of shares is not required to be recorded by a contract passed before the Royal Court (although the company's acquisition contract for the property will be a registered contract). The transacting parties enter into a share purchase agreement which sets out the conditions of the sale, and the transfer of shares is detailed in the company's records.
  
  
• Leasehold – There are two principal types of leases in Jersey. The length of the term of the lease in question is important, as it affects the way in which the agreement between the parties needs to be documented.
  
  Leases for more than 9 years (known as "Contract Leases") must be passed before the Royal Court in order to be enforceable. Shorter leases, (known as "paper leases") do not need to be passed before Court and are agreements which can simply be signed and exchanged by the parties (and accordingly do not incur stamp duty).
  
  Long term leases (e.g. usually for a term of greater than 99 years) have long been used as a method of creating interests in multiple dwelling properties, before the process of share transfer ownership became common and prior to the enactment of the Flying Freehold Law. Typically granted in return for a one-off payment (or premium) such leases do not ordinarily require the tenant to pay annual rent, and therefore they are treated as an asset, in much the same way as freehold property is considered to be an asset.
  
  Some commercial properties, particularly for land at St Helier's waterfront estate area and the Esplanade Quarter, are held on a long-leasehold basis.

Who can own property?

Ownership of residential property in Jersey is highly regulated, in order to preserve the limited housing resources for the inhabitants of the Island.

Individuals

In order to purchase and occupy residential property, an individual must qualify under the Control of Housing and Work (Jersey) Law 2012 (the "CHWL", in respect of which please see the section below for more information).

Joint Ownership

Where a property is owned by two or more individuals, there are two types of joint ownership in Jersey.

• Joint Tenants – When purchasing as joint tenants, the co-owners have an indivisible interest in the whole of the property which cannot be alienated or otherwise disposed of independently of the others' interest.
  
  The property is said to be owned by the co-owners jointly, for the survivor of them, and then for the heirs of such survivor. Accordingly, in the event of death of one joint owner their interest in the property automatically passes to the surviving joint owner. The surviving co-owner would then own all the property and upon their death it would form part of their estate. This is known as the "right of survivorship".
  
  
• Tenants in Common – When purchasing as tenants in common, each co-owner will have a specified share in the property which is distinct and can be alienated separately. The respective shares may be equal but they do not have to be, and the contract of purchase can specify the proportional interest of each co-owner.
  
  In contrast to owning as joint tenants, a tenant in common is at liberty to sell or transfer their share in a property without the participation, knowledge or agreement of the other co-owner, although in practice this rarely happens.

Whether joint owners choose to purchase as joint tenants or tenants in common may depend on their circumstances at that time, and therefore it may be necessary to review this position at a later date. It is possible to change the mode of ownership at any time if the parties agree by passing a further contract before the Royal Court.

When a property is purchased jointly it is possible for either co-owner to compel the other to bring an end to the co-ownership. The enforced sale is brought about by an action en licitation, by which the Royal Court may order the property to be sold by auction and at which any member of the public (including each of the co-owners) are free to bid.

Restrictions on property ownership

• Company Ownership – There are only limited circumstances whereby a company will be permitted to acquire residential property in Jersey. These will commonly be where the property is to be redeveloped, or where the property comprises more than one self-contained unit of dwelling accommodation. Occupation of the property, once acquired by a company, will be restricted to individuals who have residential qualifications, and such occupancy conditions as may be attached to any CHWL Consent issued for the company's purchase of the property. Note also that Jersey has recently introduced an enveloped property transactions tax, (on which see more below in the Tax section of this guide), which may apply on the acquisition of shares in a company owning property in Jersey.
  
  
• Trusts – Jersey law does not recognise a trust of Jersey immovable property. As such, a trust (whether a Jersey trust or a foreign trust) is unenforceable in Jersey to the extent that it purports to apply directly to immovable property in Jersey. It is possible, however, for the shares in a Jersey company which owns immovable property to be held on trust.
  
  
• Inherited Property – Any individual or corporate body can inherit immovable property in Jersey. Where a property is inherited by one or more individuals, such persons are each entitled to occupy the inherited property regardless of their residential status.
  
  In the case of testate succession the property of the deceased vests with the devisees specified under their Will of immovable estate, and a copy of the Will is registered before the Royal Court so as to evidence the transfer of title and ownership to the heirs. In the case of intestate succession the property automatically vests with the deceased's heirs at law in accordance with Jersey's succession laws.
  
  
• Share Transfer – As the transfer of shares in a company is not regulated by the CHWL, there is no restriction on individuals or companies acquiring the shares in a share transfer property holding company. The occupation of the unit in question will, however, be subject to the occupation restrictions set out in the CHWL.
  
  
• Agricultural Land – The sale or transfer of agricultural land in Jersey is governed by the Agricultural Land (Control of Sales and Leases) (Jersey) Law 1974. The law is administered by the Land Controls section of the Department of Environment, with the key aim of controlling the occupation and use of agricultural land to ensure a stable and viable land bank is retained for the use of the local farming industry.

Housing control

Control of Housing and Work (Jersey) Law 2012

The CHWL came into force on 1st July 2013, and replaced the Housing (Jersey) Law 1949, the Housing (General Provisions) (Jersey) Regulations 1970 and the Regulation of Undertakings and Development (Jersey) Law 1973.

The CHWL sought to streamline the old cumbersome systems relating to housing and employment in Jersey. Each person is provided with a single status that determines access to both work and housing within the Island, and all properties fall into one of two categories, being either "Qualified" or Registered".

The previous fourteen categories of residential qualifications applicable under the old Housing (Jersey) Law 1949 and the Housing (General Provisions) (Jersey) Regulations 1970 have been reduced to four principal categories as follows:

• Entitled– This category effectively replaced 1(1)(a)-(h) qualifications, and also includes those qualifying on economic or social grounds. Whilst the actual provisions are more nuanced, in general this applies to those who have lived in Jersey for at least 10 years. In contrast to the previous regulations, non-Jersey born individuals will receive permanent Entitled status after 30 years of continuous residence.
  
  
• Licensed – This category is broadly equivalent to the previous 1(1)(j) category for essential employees, however in contrast to the previous regulations such persons have the right to lease or purchase property in their own name for so long as they remain Licensed.
  
  
• Entitled for Work – A person will be Entitled for Work only once they have attained 5 year's continuous residency in the Island, or if they are a spouse of or in an enduring relationship with a Licensed or Entitled individual.
  
  
• Registered – Those residents not falling within one of the above categories have registered status and have limited access to housing and employment.

One's status may be lost where that person no longer fulfils the criteria set out in the CHWL for that status, save for those who have permanent Entitled status.

Must land be registered?

There is no system of registered title in Jersey, although all hereditary contracts relating to the sale and purchase of property (as well as Contract Leases and any variations or cancellations thereof) must be passed before the Royal Court of Jersey to be legally valid and binding. Once passed, such contracts are registered and available for inspection in the Jersey Public Registry.

If a property is acquired by way of an acquisition of shares in a company which owns Jersey immovable property, there is no requirement to register the details of the transfer in the Jersey Public Registry (although in the usual way the transfer must be registered in the company's register of shareholders).

The property market

In addition to the purchaser and seller, there are a number of other parties who would normally be involved in a property transaction in Jersey.

• Estate agents - Most sales in Jersey involve the services of a real estate agent, who advertises the seller's property to prospective purchasers. Whilst there is currently no statutory regulation of real estate agents in Jersey (although this has been recently proposed), there is a professional association of which membership is voluntary.
  
  
• Lawyers - Lawyers play an important role in property transactions, and are responsible for drafting the contracts and undertaking all the due diligence in respect of the property. The lawyer acting for the purchaser is also responsible for ensuring that the purchaser receives good and marketable title to the property, and for freehold and flying freehold properties is responsible for engrossing the sale contract and presenting it to the Royal Court for registration.
  
  
• Lenders - Most prospective purchasers will need to borrow money from a bank, building society or private lender in order to complete their purchase.
  
  
• Other Parties – Other parties' involvement in property transactions depends on the nature of the transaction. For example, a surveyor will ordinarily be required to produce a valuation or condition report for the purchaser (or the purchaser's funder), and insurance brokers may be required to arrange for buildings or title indemnity policies if issues are found during the due diligence process.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.