Buying a Property: An Observation of the Principle Differences Between England and Guernsey

We at Ferbrache & Farrell are often asked by people moving to Guernsey from England what the differences are between buying a property on the mainland and in our Island.

Because of the frequency of those enquiries, we thought it may be helpful to set out some of the key distinctions.

Although the purchase process ultimately has the same outcome (i.e. ownership), the paths to that point and beyond are actually very different.

History

Guernsey is very proud of its roots in the Duchy of Normandy, which can be traced back several hundreds of years.   The Bailiwick of Guernsey (comprising Guernsey, Sark, Alderney and Herm) has a rich historical tapestry of customary law which has included the law of property and the law of inheritance.  In the context of property, the jurisdiction has limited statutory infrastructure and the legal treatment of the subject matter is a last surviving vestige of our customary law heritage.  Practically speaking, there is a very important distinction between realty (immeubles) and personalty (meubles).

In England, whilst there is a Norman connection from 1066, the treatment of property is not based on customary law but has been supported positively by a number of important statutes.  These include the Law of Property Act of 1925 which was a remarkable piece of legislative drafting.  So effective, in fact, is that 1925 Act that it has stood the test of time for several decades until further statutory regimes have been implemented.  Those new Statutes have, for example, protected the rights of landlords and tenants, and provided clearer rules in connection with land registration. 

Property Records

Guernsey does not have the English equivalent of H.M. Land Registry.  Title to Guernsey property is “unregistered” (in the English property law sense of the word) which is to say, each land parcel in the Island is not given a unique title number as it is across the Channel.  Additionally, the States of Guernsey do not provide a guarantee as to title.  In fact, it is an Advocate’s practice which does this and with professional indemnity insurance.  It is, therefore, important for the purchaser’s legal representatives to thoroughly investigate title and in so doing will also research title to all adjacent and contiguous neighbouring properties surrounding the target property.

In England, whilst there exists a body of unregistered land parcels, the number of such properties are diminishing year on year as they become registered.  It follows that the great majority of land in England is therefore registered with one of a number of Land Registries.  Unlike in Guernsey, the purchaser of registered title does have a state backed guarantee and property information is readily available through the H.M. Land Registry internet portal.

Searches and documents

Regardless of whether a purchaser is in Guernsey or in England, the legal maxim “caveat emptor” (Buyer Beware) continues to apply.  It is incumbent upon the buyer to satisfy themselves as to the legal title (and particularly any defects therein), rather than for the seller to point any such defects out.

In Guernsey, much time is spent on title research at H.M. Greffe (the Guernsey records repository in the Royal Court).  Those investigations are then always followed up by a site visit to confirm the position as against title.  It is best practice for the creation of rights to be traced back to their creation, to ensure that such grants can be used and enjoyed fully and properly.  The Guernsey Rating Agency (known as the Cadastre) has online information about every Island property.  This assists research, but online mapping with the Cadastre is not definitive as to boundary positions.  There are very few standard forms in Guernsey conveyancing, and which again reflects the customary law background.

In England, the situation is different.  Standard practice is to carry out a series of desktop searches including (for example) a local search, an environmental search, a planning search and drainage and water searches.  Title information can be obtained electronically from H.M. Land Registry and it would generally be unusual for a property lawyer to carry out a site visit.  This is because the information within a registered title is very informative.  The use of standard forms also makes the transactional process more streamlined.

Financial Position

In Guernsey, a buyer pays their deposit to the estate agent who acts as a stakeholder.  Completion funds (generally) are paid by cheque rather than by cleared funds.  Document Duty (the Guernsey equivalent to Stamp Duty Land Tax) is paid to H.M. Greffier (an Officer of the Royal Court) who is the collecting agent for the States of Guernsey.

In England, the deposit for a purchase is paid to the legal representative for the seller, who acts either as agent or stakeholder.  Funds are electronically transferred and completion monies are also transferred by CHAPS.  Stamp Duty Land Tax is paid to H.M. Revenue & Customs directly, and often a buyer’s solicitor will submit the tax return online as part of the buying process and on behalf of the buyer.

Completion

In Guernsey, completion of conveyances of property (as distinct from the acquisition of share capital in property holding companies) takes place in person either on a Tuesday or on a Thursday at 9.30 am before the Jurats and Lieutenant-Bailiff of the Contract Court.  This is a division of the Royal Court of Guernsey.  Registration of a buyer’s ownership takes places at 4 pm on the day of completion.

In England, completion can take place on any day of the week and is not a process which is carried out in person.  New ownership is not registered with H.M. Land Registry on the day of completion, but instead during a Priority Period (which has been secured by the submission of a pre-completion search application) and which search “protects” the Register from any intervening applications which may affect title.

Conclusion

Whilst on the face of it, the Guernsey system and the English system appear quite similar, they are in fact very different. 

Great importance continues to be placed upon the Norman customary law in the Bailiwick and is a thriving example of how effective such a system can be. 

The English conveyancing process (with its legislative infrastructure) is equally efficient but, in a different way.  Ultimately, becoming registered as a property owner in either jurisdiction is a very rewarding and satisfying experience regardless of the route to completion.