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:
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.
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 of 1990 limits foreign equity
participation in local companies to the extent that a foreign investor
is permitted to own 100 percent of the share capital in a private
company, but a license is required to own more than 30 percent of the
share capital of a public company. The Foreign Investment Act also
limits foreign ownership of land to one acre for residential purposes
and five acres for trade purposes without a license. In the past, the
government generally has freely granted waivers on corporate equity and
land ownership restrictions. License applications are subject to review
and approval/denial by the Ministry of Finance (in Trinidad) or Tobago
House of Assembly (in Tobago).
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.
n accordance with the Stamp Duty Legislation in Trinidad &
Tobago, a number of documents require stamping. Some of these include:
Deeds of Conveyance; Deeds of Gift; Deeds of Mortgage; Release of Mortgage Loan; Release of Life Insurance Policies; Powers of Attorney; Transfer of Shares; Deeds of Lease; Deed Polls; Bonds – Performance and other wise; Deeds of any other kind.
The Stamp Duty Section
Inland Revenue Division
Ground Floor, Edward Street
Port of Spain
South Regional Office
Tobago Regional Office
STAMPING OF DOCUMENTS
All documents to be stamped are provided by the individual. Requisition
Forms which are to be completed are available at the Stamp Duty Section.
Payments can be made by certified cheques, cash and LINX (Debit Card drawn on a T&T bank account).
Individuals should seek assessment of documents for stamping from the
staff at the stamp duty section prior to completion of payment cheques.
Deed of Conveyance or Gift
This deed is used where residential property changes ownership.
Residential Property is deemed to be land upon which a house has been
built and used wholly or mainly for residential purposes.
WITH EFFECT FROM OCTOBER 1ST 2008, the stamp duty applicable on deeds executed for the transfer of residential properties will be as follows –
RESIDENTIAL PROPERTY (including dwelling house)
The sale or other disposal of residential properties valued at $850,000 or less SHALL BE EXEMPT from stamp duty.
The following rates of stamp duty SHALL BE payable on the sale or other disposal of residential properties (with dwelling house) whose values exceed $850,000:
- For every dollar of the first $400,000 in excess of $850,000 – 3%
- For every dollar of the next $500,000 – 5%
- For every dollar thereafter – 7.5%
RESIDENTIAL PROPERTY (land only)
The sale or disposal of residential land valued at $450,000 or less shall be EXEMPT from Stamp Duty.
- For every dollar of the first $200,000 in excess of $450,000 – 2%
- For every dollar of the next $200,000 in excess of $650,000 – 5%
- For every dollar thereafter in excess of $850,000 – 7%
N.B: RATES FOR COMMERCIAL / AGRICULTURAL PROPERTIES REMAIN UNCHANGED.
Once the appropriate stamp duty has been paid, as certified by an
embossed stamp affixed by the Board of Inland Revenue, the original
transfer documents are lodged with the Registrar General’s Department
and a registered copy will be delivered to the Purchaser as proof of
his ownership of the land. The registration fee payable for the old law
system is typically TT$100.00 and TT$50.00 for the R.P.A. system.
Deed of Residential Mortgage
This deed is used in the purchase and/or construction of a residential
property. Property valued up to $315,000 are exempt from stamp duty.
Where the value exceeds $315,000 stamp duty is
payable on the full amount at the rate of 50¢ for every $250.00 or
Performance Bonds are stamped at the rate of 50¢ for every $250.00 or part thereof.
The stamp duty on an Estate Bond is at the fixed rate of $10.00
The stamp duty on a Tender bond is at the fixed rate of $25.00
Transfer of Shares
When shares are being transferred the Company’s Auditor must be provide a Valuation Report.
The stamp duty charged is the greater of – 5% of the value of the
shares transferred or 5% of the consideration given, where the company
is registered on the Stock Exchange. Where the company is not registered
on the stock exchange, the stamp duty charged is the greater of – $5.00
per $1000. of the consideration given or $5.00 per $1000 of the value
of the shares transferred.
Source: Ministry of Finance