Straight away, I would strongly recommend that all public and private sector entities involved in conveyancing-the transfer of property-in Saint Lucia, should separately and jointly, review their laws, rules, procedures and processes, to remove the hassle and harangue that now plagues the process. The current situation is highly unsatisfactory and is a huge drag on development. It has gone well beyond what is tolerable, and if not fixed, could cause aggrieved citizens to act “out of character.”
Given that the Government earns significant revenue from the purchase and sale of property and plans to embark on an expansive housing programme, it has a vested interest in requesting all banks, property appraisers, land surveyors, the National Insurance Corporation, (NIC), the Bar Association, the Land Registry, and the Inland Revenue Department (IRD) to promptly undertake this review.
Dissatisfaction and Distress
Property transactions is arguably the most fundamental element of national development. At one point or another, a citizen, company and a government buys and sells property.
I am yet to encounter ONE individual who has attempted to buy or sell property in Saint Lucia, who does not have a horror story to tell, about wall-to-wall, frustration at virtually every stage of the conveyancing process. The process lacks clarity, efficiency, and urgency. Moreover, some individuals, have shared with me, cases of outright dishonesty by one or more actors in the process.
The Role of Banks
Our banks are obligated to be “up front” with clients and to ensure that they fully understand the intricacies of borrowing. Clients too, have a responsibility to inform themselves about this.
A sore point is the process of hypothecation, which applies when a borrower pledges an asset to a lender as collateral for a loan. In this arrangement, while the owner of the asset retains title, possession, or ownership rights, the lender can seize the asset if the loan is not repaid. However, many borrowers who have fully repaid their loans especially to banks, are shocked to find liens on their property have not been removed on the records of the Land Registry. Often, they realize this, only when they attempt to sell property.
About two decades ago, I had to intercede on behalf of a family friend, who thought he had offered a portion of his landholdings as collateral for a bank loan, only to later discover, that the bank had taken a lien on his entire holdings, the value of which far exceeded his loan. Somewhere in the history of that transaction, a misunderstanding had occurred. Luckily, the bank acknowledged the unfairness of the transaction and promptly rectified it.
Readers might ask: whose responsibility is it to inform the Land Registry that a lien on a property is no longer valid and should be removed? In my mind, it should the bank’s responsibility to do so. Moreover, I would argue that at the very least, a client who has fully repaid a loan/mortgage, should immediately be given a letter confirming this, which should be copied to the Registrar of Lands. This should allow for a provisional entry to be made on the property register, pending the full “radiation” of the property. I do not think the law now allows this, but I believe it would give some assurance to potential buyers of a property, that it is free of any encumbrances.
Now, one might think getting such a simple letter from a bank, would be “easy as squeezy.” Not so! If the bank involved is no longer in business and/or has been acquired by another bank, which has not prioritized the management of the records of the former bank, then “cwapo smoke your pipe.” I believe the Government or the ECCB should insist, via law, that no merger or acquisition can be finalized, until or unless the records of the old and new bank are fully integrated and updated.
Clearance Letters
For good reasons, persons selling property must obtain letters from the NIC and the IRD indicating that they are not indebted to these agencies. While I have no problems with this requirement, I am yet to understand why it can take several months to get such letters. From personal experience and from feedback from others, the IRD is far more efficient in providing these letters than the NIC, leading me to urge the leadership of the NIC to undertake a management audit to identify and address weaknesses in the process and to reduce the number of visits and phone calls that clients must make to the NIC to get a simple letter.
Land Surveys
Significant challenges are also experienced with land surveys. Some surveyors are more efficient, and reliable than others, which is not good enough. Too many stories abound about land surveyors who have let down their clients. Those surveyors who are giving their profession a bad name, should be required to clean their act, or face some form of disciplinary action.
The Role of Lawyers
Lawyers play a critical role in all aspects of the operation of the property market. They are involved in conducting title searches to ensure that a prospective seller is legally entitled to transfer a property and that there are no outstanding liens or that could affect the buyer’s ownership rights. They are also involved in the preparation of deeds and mortgages and in helping to resolve disputes among aggrieved parties.
As would be expected, some lawyers are more professional than others. Those who give of their best, ought to be deeply concerned about those who sully the profession. Sadly, not many aggrieved clients know the steps they can take to seek redress against delinquent lawyers, including through the Disciplinary Committee of the Saint Lucia Bar Association, established under the provisions of the Legal Profession Act, No. 31 of 2001.
Alarmingly, according to data from the Office of the Attorney General (AG) at one stage, the Committee received 45 complaints from members of the public about local attorneys-at-law. I believe this figure would easily triple, if more people were aware of the process. During my time as a member of the Appeals (Professional Misconduct) Commission set up to hear appeals by lawyers of actions taken by the Disciplinary Committee, the Commission upheld disciplinary action in three cases, in its very first meeting.
I do not doubt the resolve of the Bar Association to ensure that its members act honourably and professionally. However, there are enough stories in circulation to justify stronger action by the Association to bring errant members into line.
Property Valuation
The delays that have arisen from the unsatisfactory process described earlier, have a bearing on the 90-day shelf life of property appraisals in Saint Lucia. In many countries, the norm is six months. I am not convinced the local real estate market is brisk enough to justify 90 days. However, what concerns me most, is the added cost involved in having to re-do a valuation because of a sloppy conveyancing process.
I rest my case!