THE Realtors Association of Jamaica (RAJ) has given notice that it will be stepping up its push for legal reform in a number of areas that impact the country’s real estate industry. One area of concern is the titling system and the slow pace of the National Land Agency’s (NLA) registration programme at a time when there appears to be an uptick in titles fraud.

There is also concern about the emergence of “professional adverse possessors” who actively seek out property to acquire when owners are not paying attention.

Quoting NLA data that says a large chunk of the country’s land remains untitled, RAJ President Gabrielle Gilpin-Hudson has pointed to the negative impact this can have on real estate transactions.

“As realtors, it is in our interest to lobby for more titling of land because it’s easier for people to sell when they have a title; the transactions go better. You have better proof of ownership, you have all the things that come with our registered title system — but we still have 40 per cent of our land untitled,” she said.

She was doing a recent session, for her follow realtors, on legal reform in real estate. In making her point, Gilpin-Hudson also pointed to Caribbean Policy Research Institute (Capri) research that outlines the socio-economic benefits of land ownership. She acknowledged that the NLA “is trying to increase the registration of titles across the island”.

“The problem with it, though, is that they do it area by area, one at a time,” said Gilpin-Hudson, who is also an attorney.

“Unless that programme is operating in the area that your client has a property in at the time, they are going to have to go through the full process of applying for first registration. I definitely advise them to use an attorney for that, to get a title. This is something that we definitely need to raise awareness about and push for that. We need to title more of the land in Jamaica,” she added.

The RAJ president noted, however, that while there are benefits to land titling, it does not offer 100 per cent protection against nefarious players.

“It’s great that we have registered titles, but also what is becoming more and more increasingly popular and prominent is title fraud,” said Gilpin-Hudson.

“There are some persons who have now become professional adverse possessors, where they literally go around and look for land that they know they could probably get away with easily making an application to adversely possess — and then turning around and using realtors to sell it for them. Those are some of the things that you want to be mindful of, as a realtor, when you’re taking a listing: look at how the title was born. On the face of the title, in the top corner of the title, if it’s an adverse possession title, you will see ‘AP’, which means…the person got it by way of adverse possession,” she added.

She made it clear that not all adversely possessed properties are “a bad thing” but stressed that care must be exercised in transactions in which they are involved. Gilpin-Hudson explained how difficult it is to recover a property that has been successfully acquired through that method.

“You have very little chance of doing anything about it and… little chance of it being sold again after that,” she said.

There is hope, but it is slim.

“If you can show that Title’s Office was careless in allowing the adverse possession application, you could make a claim against them. They have an indemnity fund…and you can get some compensation, but it’s very hard to prove…Other than that, the only way to undo the sale is to show fraud, and that’s very, very hard to prove again,” said Gilpin-Hudson.

She urged owners to keep an eye on their property, including being on the lookout for published legal notices that are required if an adverse possession — or a number of other real estate transactions — is being done.

“You really should be keeping an eye out, in the paper, to see if anything is being advertised. I’ve even seen where people put caveats on their own property because they know that that property is in a high adverse possession application area,” the attorney said.

During her presentation, Gilpin-Hudson also spoke of the need for reform in the transfer tax and stamp duty process as part of property sales. She is of the view that it takes far too long to assess the market value of a property, a vital step in determining how much transfer tax is due. She questioned whether the exercise is still necessary and, if it is, how the process can be streamlined.

“Back in the day, the taxes were so much more, what people would do is put untrue prices in their agreement for sale and pay money on the side to try and avoid paying the taxes. But in my opinion, I think that this [calculation of transfer tax] has become very unwieldy. We really need to look at how they’re going about it…and how we can do it more effectively,” said Gilpin-Hudson.

She spoke about personally experiencing the embarrassment of having to explain resultant delays to overseas clients because of these and other factors which cause transactions to drag on.

Another time-consuming legal matter is having restrictive covenants modified and the RAJ is hoping to see improvements in that area as well.

“When a covenant is breached, the only way to fix it is to make an application to the Supreme Court under the Restrictive Covenant Discharge and Modification Act. This process is unwieldy and take long! No matter if you have the best attorney on Earth, you are at the mercy of the court, and you have to sit down and wait your turn,” Gilpin-Hudson explained, adding that these cases typically take at least nine months.

She suggested that a special tribunal be set up to handle “straightforward amendments to restrictive covenants”.

“For example, just like how adverse possession applications or first registration title applications are made to referees who are specialised attorneys designated to be able to look at these things, maybe we need to have referees for restrictive covenant modification — or a special tribunal,” she said.

[“The current system] is such a long, drawn-out process; it is really not serving us well at all,” added Gilpin-Hudson.

She said a number of these issues had been raised in a discussion, last summer, with Prime Minister Dr Andrew Holness before she became RAJ president. She said the RAJ’s suggestion that a real estate action task force be established had been well received but to date “it hasn’t come to fruition”.

The RAJ’s goal is for real estate to be treated “as an issue that needs attention”, with the same level of focus as that given to tourism, the economy, or the fight against COVID-19 at the height of the pandemic.

GILPIN-HUDSON… there are some persons who have now become professional adverse possessors (Photo: AZI PHOTOGRAPHY)