Law & Society

While there may be very good opportunities for investment in St Lucia, there are several points which must be considered when one is purchasing property as a foreign investor. This guide highlights the top five. 1 St Lucia’s Legal System is unique

St Lucia’s legal system can best be described as hybrid because it is influenced by both the English common law and French civil law. As a result, while St Lucia has a Civil Code, it also utilizes the common law in instances where the code is silent. This unique system may have legal consequences on your property purchase. For this reason, always obtain legal advice before formally entering into any commercial transaction.

2 Not all Estate Agents are created equal

It is common practice in St Lucia for property owners and developers to list their properties with estate agents. There are a wide variety of local and international agents who can advise you about investments available on island. To ensure you have a hassle free purchase, ensure you choose a reputable agent.
At the very least, the estate agent should be a member of the local real estate association. This association will have their own vetting procedures for membership as well as a code of conduct which the members will be required to follow. Dealing with members means you can lodge a complaint to the association if they act in an unethical or illegal manner.

While the estate agent will most likely represent the seller, you want to ensure that they will act in an ethical, legal and professional manner towards you as the buyer. Do not be afraid to ask the difficult questions to clarify the extent to which they will act in your best interest.
Always ask for key points to be sent to you in writing and carefully read all documents before signing. If you are in doubt, consult a lawyer.

3 The seller owes you no duty of disclosure

Very often you will inevitably establish a relationship either with the estate agent or seller of the property you wish to purchase. In circumstances such as these, it is easy to forget that you are engaging in a serious business transaction in which the estate agent or seller are technically your adversary.

While a good agent will make every effort to find a suitable property for you, their allegiance is normally to the seller particularly if there is an agreement between them. This will affect the extent to which the agent can act on your behalf.

Firstly, while the agent cannot lie to induce you into the deal, they are not obliged to freely volunteer information about the property. For example, they are not obliged to tell you about any defects in the building or if neighbors are excessively noisy. You therefore need to carry out sufficient due diligence including asking all the important questions about the property. Trying to file claims against agent or seller after a purchase will be costly and time consuming, especially if you are relying on their oral word.

Any important facts which you base your purchase on should be set out in writing and that if there are any issues which you are concerned about, obtain independent third party advice.

4 A license is required in order to purchase property in St Lucia

In order to purchase property in St Lucia, you will need to obtain an alien land holding license. This is a document from the government giving you permission to buy property even though you are not a national of St Lucia.

Buying property in St Lucia is fairly straightforward. Once you have entered into an agreement for sale with a seller on a particular property, you can apply for the necessary license. The license will only apply to the specific property. A separate license will be required to obtain any additional property.

The administrative charge for applying for the license is approximately US$1,850 (£970).
The application process requires you to provide proof of identity as well as other information about your background and financial standing. This includes:
1. Four (4) Passport sized photos
2. Certified copy of data pages of passport
3. Bank References
4. Short form Curriculum Vitae or Resume
5. Police Certificate of Good Character or Police Report
6. Full set of certified Fingerprints from a Police Station (Can be done in St Lucia)

Applications can take as quick as 6 weeks and as long as 6 months to process. It is dependent on the complexity of your particular circumstances and the speed with which the relevant government bodies deal with the application.

Once you have obtained an Alien’s License, you will need to complete the process by executing a Deed of Sale. A Deed of Sale is the legal document prepared and signed before a lawyer, which transfer the property from the seller’s name to your name. If you are securing funding and require a mortgage to be secured against the property, your lawyer will also have to prepare and execute a deed to register the mortgage against the property.

Transactions do not always go according to plan and it is not uncommon for the alien license process to take longer than anticipated. Time can be a major consideration particularly in relation to property purchases where financing has been obtained or agreements carry deadlines. Always ensure to factor in additional time when contracting with third parties so as to avoid potential financial consequences. For example, when signing an agreement for sale, ensure it enables you to extend the time for completion if you have not obtained the required license in time.

5 Lawyers are not obliged to carry professional indemnity insurance
You will require the services of a lawyer in order to purchase property. You should note that lawyers in St Lucia do not generally carry professional indemnity insurance. This means that carrying out background checks are critical. If you fail to choose a reputable, competent firm, you may risk losing on your investment.

At the very least you should carry out the following checks:
• Ensure your lawyer has a practicing certificate and is able to practice in St Lucia.
• Ask for a CV or company profile which sets out the qualifications and experience of the lawyer including the work they do and type of clients they represent.
• Get references and follow them up.
• If you are not confident about the firm’s reputability but are prepared to take the risk nevertheless, do not hand over any substantial sums of money or alternatively insist that it be held in a joint account. The setting up of a joint account may be costly and time consuming but will provide you with some degree of protection.
• Be wary of lawyers offering substantially reduced fees. The old adage ‘You get what you pay for applies.’ Most reputable firms will not substantially reduce their fees without reason or justification, as it ultimately affects the quality of the service they provide. Furthermore, for lawyers it is unethical to do so.