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
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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
SUMMARY
Monday 21 October 2013
• 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?