BARBADOS: SALE AND PURCHASE OF RESIDENTIAL PROPERTY*
1. When a prospective purchaser has been found, both vendor and purchaser must obtain legal representation. The vendor must then provide his or her attorney with copies of the current deed and surveyor’s plan of the property.
2. The vendor’s attorney prepares a draft Purchase and Sale Agreement in accordance with the vendor’s wishes and forwards the draft to the purchaser’s attorney for their perusal, insertion of a date of completion and, if necessary amendment. However, the sale of residential property is fairly standardised and usually does not require significant amendment after both vendor and purchaser have agreed upon a price.
3. Once the parties have agreed upon a date of completion, the purchaser must sign the agreement in duplicate and forward the agreement along with a 10% deposit to the vendor’s attorney for the vendor’s signature. The agreement becomes binding only after the vendor has signed. The deposit is held in the vendor’s attorney’s trust account until completion.
4. If the purchaser is not a resident of Barbados then application must be made to an authorised commercial bank in Barbados for approval, which will be given once it is demonstrated that the funds to be used to purchase the property originate outside of Barbados.
5. The purchaser’s attorney must then ensure that the purchaser receives the property free of any encumbrances by the date of completion; and it is the responsibility of the vendor’s attorney to satisfy the purchaser’s attorney.**
6. On the date of completion the purchaser’s attorney remits the balance of the purchase price to the vendor’s attorney. The vendor’s attorney then forwards these funds (along with the original deposit) to the vendor less 2.5% transfer tax, 1% stamp duty, attorney’s fees and where applicable, realtor fees.***
* This document is not a comprehensive or strictly precise description of the process of property conveyance as practiced in Barbados and is intended only to familiarise clients with the process in general.
** For example, if the property is subject to a mortgage then a release of the mortgage must be obtained prior to completion. Where the vendor requires the purchase funds in order to satisfy such a mortgage the balance remaining on the mortgage will be deducted and forwarded to the mortgagee prior to releasing the purchase funds to the vendor.
*** Although the purchaser takes possession on the date of completion and gets keys to the property, the purchaser will not get a deed of title until documents have been processed at the Land Registry which may take a few days or a few weeks according to the Registry’s workload at the time.