It is advisable to hire a lawyer although this incur additional expense.
An experienced real estate lawyer can help you evaluate offers (those with
a variety of conditions), protect your interests throughout the entire
transaction, act as an escrow agent to hold the down payment, evaluate
complex mortgages and/or leases with options to buy, review contracts and
handle your home's closing process. They can also tell you what things,
by law, you must disclose to buyers prior to a sale and can also help you
avoid inadvertently discriminating against any potential buyers.
Land Title Systems
In Trinidad & Tobago there exists two systems of land law. One
commonly referred to as the "Old Law" system and the other a system of
registered land titles under the Real Property Ordinance (R.P.O.), Chapter
27 No. 11 of the Laws of Trinidad and Tobago.
The R.P.O. system of conveyancing is based on the well known Torrens
System (named after Sir Robert Torrens) which sought to abolish the necessity
for Title Searches by providing that for every parcel of land under the
system there should be a Certificate of Title. All dealings e.g. transfers;
mortgages; leases or other encumbrances with respect to the particular
piece or parcel of R.P.O. land must be recorded on the Certificate of Title.
The title of a vendor therefore can easily be ascertained by looking at
his Certificate of Title.
Under the R.P.O. system title is guaranteed by the State, and if someone
is fraudulently deprived of his interest in R.P.O. land he can claim compensation
under a land assurance fund.
Notwithstanding the particular advantages of the R.P.O. system and despite
the fact that there is provision for lands under the Old Law system to
be brought under the R.P.O. system most land in Trinidad and Tobago is
still held under the Old Law system. This system is based primarily on
English Common Law and has been modified from time to time by local statutes.
Estates in Land
An estate in land is a measure of the duration of the quantity of ownership
or interest in land. An estate may be Freehold or Leasehold.
A Freehold Estate is an absolute interest in land capable of perpetual
existence whereas a Leasehold interest is a term of years arising where
property has been demised to a person for a certain number of years.
In transferring one's estate in land the form of document used will
vary according to whether it is freehold or leasehold and also whether
it is Old Law or R.P.O.
A freehold estate is transferred by a Deed of Conveyance (Old Law)
and in the case of R.P.O. by a Memorandum of Transfer. A leasehold interest
is transferred by a Deed of Assignment (Old Law) and in the case of the
R.P.O. by a Memorandum of Transfer.
Although a leasehold interest is not of unlimited duration as is in
the case of a freehold estate, it is not uncommon to find leasehold interests
for periods such as 199 years or even 999 years.
Agreement for Sale
Although there is no requirement for parties to enter into a formal
agreement for the sale and purchase of land, it is advisable to do so.
To be enforceable an agreement for sale must be in writing and signed
by all parties. There is no prescribed form but the agreement must include
a description of the property; the parties (i.e. the vendor and purchaser)
must be identified and the purchase price or consideration must be stated.
Apart from these three essential elements the agreement will usually
provide for a 10 % deposit to be paid by the Purchaser and
for completion within 90 days. The terms of the agreement however are entirely
within the control of the parties.
Once the agreement for sale has been signed the Purchaser's
must investigate the title to the property to ensure that the Vendor
a good marketable title. In order to ensure good title the Purchaser's
attorney or his Title Clerk must undertake a search at the Registry of
Deeds at the Registrar General's Department where all original deeds
lodged. An abstract of title will be prepared which consists of a list
of all documents or events affecting the land and generally sets out
history of ownership of the land for the past twenty (20) years. The
of title will commence with what is called a root of title. The root of
title must be at least twenty (20) years old. From the root of title to
the present all documents found must form an unbroken chain ending in
the vendor. All mortgages found in the chain must have corresponding
In many cases a vendor may enter into an agreement to sell land which
is still subject to a mortgage. In such a case the vendor must provide
a copy of the release of the mortgage executed in escrow by the Lender
together with a statement from the Lender as to the amount required to
effect the release as well as a note of the its Attorney's fees for preparing
the release. Once these things are presented the Purchaser's Attorney may
withhold from the balance of the purchase price an amount required to liquidate
the mortgage and settle the fees of the Attorney for the Lender.
Under the R.P.O. system title searches are much easier. It involves
an examination of the endorsements made on the Certificate of Title. An
investigation of these endorsements will quickly confirm who is the present
owner of the land and whether there are any mortgages or other encumbrances
affecting the land.
Apart from title searches the Purchaser's Attorney must ensure that
there are no judgments registered against the vendor or any previous owner
of the property for the past twelve (12) years. A judgment registered against
a vendor will entitle the judgment creditor (the person who obtained the
judgment) to apply to the Court for an order to sell the vendor's property
to satisfy the judgment. This can be done even after the property has been
transferred to a third party i.e. the Purchaser.
Title searches usually take between two to three weeks to be completed.
Transfer of Real Estate
In most cases the Purchaser's Attorney is responsible for preparing
the relevant instrument of transfer. In other cases, such as where the
Purchaser is taking a new lease of a property, the vendor's Attorney will
prepare the instrument i.e. the Lease. In both instances however the Purchaser
will bear the costs.
Once the title to the property is in order the relevant transfer document
may be completed. Upon closing the vendor must provide the following documents:
Lands and Building Taxes receipt or House Rates receipts showing that the
payment was made for the current year and that it was assessed in the name
of the vendor;
Water and Sewerage Rates receipt for the current period;
Water and Sewerage Clearance Certificate confirming that there are no outstanding
rates affecting the property;
Town and Country Planning Approval and a Completion Certificate in the
case of recently built houses, or a sub-division approval in the case of
recently subdivided lands;
Releases for all outstanding mortgages duly executed in escrow together
with a statement showing the amount required to liquidate the mortgage
and a note of the Attorney's fee for the preparation of the Release.
In the case of Leasehold Properties and Condominium/Townhouse Schemes
the following additional documents may be required:
Stamp Duty on Instruments
Lease rent receipt;
Lessor's consent to the assignment where necessary;
Current maintenance charges receipt where applicable;
Share Certificate in the name of the vendor evidencing the vendor's share(s)
in the property management company;
Articles of Incorporation and By-Laws of the Management Company;
Duly executed Share Transfer.
After the transfer instruments have been signed the instruments must
be submitted to the Board of Inland Revenue for stamping. Stamp Duty is
a duty levied and paid to the State upon and in respect of several instruments
including instruments transferring interests in real estate.
Where there is a dwelling house upon the land transferred the Stamp
Duty payable is as follows:
up to and including TT$350,000.00: exempt
from TT$350,001.00 to TT$450,000.00: 5%
from TT$450,001.00 to TT$550,000.00: 7.5%
over TT$550,000.00: 10%
For non-residential transfers i.e. commercial properties or where
the property consists of land alone the Stamp Duty payable is as follows:
Non Residential Transfers
not exceeding TT$300,000.00: 2%
from TT$300,000.00 to TT$400,000.00: 5%
above TT$400,000.00: 7%
The above rates for non-residential transfers are to be applied
to the total consideration. For example if the consideration is $350,000.00
the stamp duty payable will be 5% of $350,000.00 = $17,500.00.
Once the appropriate stamp duty is tendered to the Board of Inland Revenue
the Board will certify payment by an embossed stamp on the first page of
the instrument. All instruments must be stamped within two months of their
signing; in default a penalty will be imposed for late stamping.
It is only after stamping that the instruments may be registered. Under
the Old Law System registration is not compulsory. A purchaser can show
good title by producing his original executed deed. However it is advisable
not only to have one's deed registered but also to have it registered expeditiously.
Every deed that is registered has priority over all other deeds or conveyances
of the same property and over all judgment creditors. It is provided by
law that an unregistered deed shall be deemed to be fraudulent and void
as against any other purchaser for value or mortgagee without notice of
the unregistered deed. As a result a subsequent disposition of the same
property once registered will rank in priority to the unregistered disposition
even though the latter may be first in time.
Under the R.P.O. system the situation is quite different. Registration
is mandatory. The Real Property Ordinance provides that no instrument shall
be effective to pass any estate or interest in lands until registered under
Once the instrument has been registered the purchaser's Attorney will
usually prepare a Return of Ownership Form which the Purchaser must take
to the Warden's Office or the District Revenue Office for the particular
area in which the land is situated to have their records updated. The property
will thereafter be assessed for Lands and Buildings Taxes in the name of
The Foreign Investment Act 1990 permits foreign investors (i.e. an
individual who is neither a citizen of a Caricom country or a resident
of Trinidad and Tobago) to acquire up to one (1) acre of land for residential
purposes and up to five (5) acres for commercial purposes. Acquisitions
in excess of those amounts can only be made if a licence from the President
In cases where no licence is necessary the Act provides that the purchase
consideration must be paid in an internationally traded currency through
a person authorised by law as a dealer in that currency (e.g. local banks).
Further the foreigner and his Attorney must deliver to the Minister of
Finance a Notice specifying the name and address and nationality of the
investor, the date and registration particulars of the instrument by which
he became owner and evidence that the purchase price was in fact paid in
an internationally traded currency.
Note: The above information is not provided by way of legal advice and
any person interested in purchasing or otherwise dealing with real property
should contact an attorney-at-law for advice in relation to the specific
matter or transaction.
When purchasing a property, one should be fully aware of all the hidden
costs which WILL arise from the transaction.
Stamp duties are government taxes that are payable on registering property
conveyance documents. This means that any time a property changes ownership,
a stamp duty must be paid.
Lands and Commercial Properties
Under $350,000 2%
$350,001 to $450,000 5%
Over $450,000 7%
$0 to $350,000 Nil
$350,001 to $450,000 5% on every dollar in excess of $350,001
$450,001 to $550,000 7.5% on every dollar in excess of $450,001
$550,001 and above 10% on every dollar in excess of $550,001
Up to $100,000 $1,500 minimum
$100,001 to $500,000 (x .75%) $4,500
exceeding $500,000 (x .5%)
Minimum cost of 1/4 of 1% (0.25%) of the Valuated Price