Errol Ford | Bar lawyers from hogging real estate transactions

Since the early 2000s, I have tried on more than one occasion to acquire a property in Jamaica and failed. My failure is linked mostly to my refusal to work with lawyers who should not be in the service industry.

In July 2018, I identified property in Jamaica that I wanted to purchase, having been preapproved for a loan. Fourteen months later, I am still not able to close.

In my case, the loan prequalification period expired even before I received an executed contract, which meant I needed to restart the process and resubmit all the paperwork. I discovered other issues with the property during the process and asked for my initial deposit back. It took weeks and several telephone calls/emails to have the money returned.

After the initial purchase demise, in February 2019, I decided to do a cash sale. I asked my agent if I could change the buyer’s lawyer and was told no. The parties agreed that this time, the entire process would take 60 days. This means I had to pay the buyer’s lawyer twice and pay my lawyer twice. Seven months after I started the 60-day cash sale process, I am still not closed.

I have spoken to a number of returning residents who have had similar experiences and, like me, have lost money in the process. Here is why. The real estate industry in Jamaica is primarily controlled by lawyers who are apparently are more interested in their financial well-being than in the interest of their clients.

Put succinctly, the longer they keep the clients’ money, the more money they make, which means they have no incentive to expedite the process. Little recourse is available to the contractual parties or even real estate agents.

There is a better way. Here’s how. Reduce or eliminate the role of lawyers and give more control of the process to the realtors and the mortgagee.

US TRANSACTIONS

United States real estate transactions are efficient, and can take as little as 14 to 30 days, from identifying the property to closing. The new system would improve the processing time and imbue it with transparency. The current system penalises buyers, erodes trust, and degrades the credibility of lawyers.

The process may be improved in the following way:

1. The buyer identifies a property.

2. The buyer’s realtor/broker prepares an offer and sends the offer to the seller’s agent/broker with a maximum time limit of 72 hours for a response– acceptance, rejection or counter-offer with time limits.

3. Once the offer is accepted, the buyer’s realtor completes the contract, which is pro forma.

4. Appendices are added to the standard language to facilitate any special terms or conditions not provided for in the pro forma.

5. The contract is then signed by the buyer and sent to the seller.

The approximate closing period is stipulated in the contract with consequences for non-compliance by both parties.

6. Once the contract is fully executed, which would outline funding source and other necessary conditions, the deposit is made.

7. The deposit is held by the broker or the title company. Communication between the mortgagee, buyer, buyer’s agent, seller, seller’s agent and the title company is escalated at this point to necessitate governmental requirements, mortgage processing, and any other actions the parties are obligated or wish to do.

8. The title search is done by a title company, which usually facilitates the closing.

It would not be necessary or required for a buyer or seller to hire a lawyer.

Prior to closing, the parties receive a settlement statement for review, which details the monetary obligations/receipts of the contracting parties.

On the day of or day prior to closing, the buyer is given the opportunity to walk the property to ensure that the conditions have been adhered to.

For closing, all the parties meet at the title company, the final papers are signed, cheques are exchanged, and house keys handed over to the buyer.

Errol Ford is a Jamaican living in the United States. Email feedback to columns@gleanerjm.com and blueslife1@hotmail.com.