We own a property on a compound and this is the procedure.
Property developers buy a large piece of land at market price for land development.
Our developer bought a huge tract of land and has built a compound.
That developer had to within 6 months start building work or it would have to have been returned to the Government.
Each unit that was built was offered for purchase to buyers. Some buyers bought off plan.
If you buy off plan the prices are considerably cheaper than if built, as you are unable to move in straight away.
This land is OWNED by the government even though it is bought by the developer, as the registered owner registered in the court is the government as the land has not been fully 'handed over'.
Anyone buying in a compound is unable to register it in their name.
Buyers register at the Company Office as owners but this is not registered as the Government still technically holds the registration in the court.
Owners of compounds are unable to use this form of owning property to get a residency visa.
At present the registered price for each unit in a compound is held at the initial purchase price. This invariably is substantially lower than the actual value at today's prices, although this does not affect resale.
A first time buyer could have bought their unit for 100,000le and that is what is quoted on the official documents and sale, but the actual price may be 500,00le. So be aware of that when you purchase on compounds.
When the development is fully completed by the developer, he is then liable to 'hand it over' to the local council for registration.
At that point individual owners can register the property in the courts as their own and not before.
Compounds have maintenance fees for private security, rubbish collection, lighting, watering of greens etc. At the hand over there will be an option to residents to upkeep that maintenance with the company or they can refuse and have it taken over by the council.
It is in everyone's best interest to keep that maintenance agreement going.
Buying on a compound/gated community
Moderators: DJKeefy, 4u Network
Compounds
Wow! Do I understand correctly - if I buy a flat in a compound, it cannot be used for my residency visa, as the house I now have does?
Seems like a big OOOOPS for me!
Best,
Scott
Seems like a big OOOOPS for me!
Best,
Scott
We make a living by what we get;
we make a life by what we give.
we make a life by what we give.
You would have to check with the individual compound to ask if you can register your unit.
Most people don't because if they do they then become liable to property taxes, but it is possible if enough of you on the site want it we heard, although we haven't pursued this.
If you buy from a compound at today's price in a new development and not one which is older the registered price may fullfil the Visa required $50,000 for residency.
If you take your contract with this price to the Notary Office and have it registered there as your property at that price then you will have a registered document saying you have a property at the $50,000 required to show to the visa people.
The problem affects the people who have bought in older compounds when the unit price was much lower than it's actual value today. They may have a unit worth $65,000 BUT it is registered at the company on the first sale as $10,000, so if they go to register it at the Notary it will have that price on it. That will be the price on the contract.
If you are buying on a compound and the price on your contract at first sale is $50,000, or above then you are fine.
You then go to the notary and have it registered and take that to the visa office.
The problem is affecting second and third time owners of older compound units where the actual cost was below $50,000, even though they have paid much more, the initial cost is what is shown on the contract.
Most people don't because if they do they then become liable to property taxes, but it is possible if enough of you on the site want it we heard, although we haven't pursued this.
If you buy from a compound at today's price in a new development and not one which is older the registered price may fullfil the Visa required $50,000 for residency.
If you take your contract with this price to the Notary Office and have it registered there as your property at that price then you will have a registered document saying you have a property at the $50,000 required to show to the visa people.
The problem affects the people who have bought in older compounds when the unit price was much lower than it's actual value today. They may have a unit worth $65,000 BUT it is registered at the company on the first sale as $10,000, so if they go to register it at the Notary it will have that price on it. That will be the price on the contract.
If you are buying on a compound and the price on your contract at first sale is $50,000, or above then you are fine.
You then go to the notary and have it registered and take that to the visa office.
The problem is affecting second and third time owners of older compound units where the actual cost was below $50,000, even though they have paid much more, the initial cost is what is shown on the contract.
If the compound bought the land and paid for it then it will be registered in their name, and you won't have a problem.
If the compound has only partially invested and not finished paying then technically it will still be registered with the Government so then you have to wait till handover, until all monies are paid by the company.
Check with the company if they own it fully or are only partially paid up to the Government..
Different compounds vary.
If the compound has only partially invested and not finished paying then technically it will still be registered with the Government so then you have to wait till handover, until all monies are paid by the company.
Check with the company if they own it fully or are only partially paid up to the Government..
Different compounds vary.
Your welcomeOscar wrote:Useful information thank you, are you or your husband a lawyer or work in this field in anyway?
Nope
we're not touting for business
just bought two properties and wanted to detail the sales so it would make life easier for any potential buyers.
Hear so many stories of people being ripped off I just wanted to tell how easy it can be.
Sorry just realised I did not explain how to actually BUY on the compound
Here you go:
Each compound has a company office. The development companies vary in size.
Ours is huge and owns many sectors. This is the procedure we followed to buy on ours.
We went to the a real estate agent and viewed the property. It was unoccupied and was from the original owner.
The owner had bought it using a mortgage with a few years left to pay.
It had electric meter in their name.
Our estate agent then arranged for the seller and us, plus him to go to the Head Office to do the exchange. Because it was on a compound there was no need for a lawyer as the Company acted as the lawyer.
The company showed us( the buyer) the Ministerial Document saying that they had ownership of the Development and land.
They then showed us the purchase documents from the original seller ( our seller). It showed every payment to the mortgage and how much was left to pay. The seller had a few thousand pounds left to pay in our case.
The company then drew up a new contract of exchange.
Before they could sell it they had to complete the mortgage payments so they could legally sell it.
The usual thing done in this situation is the buyer (us) pays the remaining balance and deducts it from the price.
So we paid the company the balance and they cleared the debt and issued a final payment document.
We then paid the seller his money less the balance we paid.
We paid cash and it was all done in the office.
The seller then goes with his cash.
We are then given a full contract which was written up that afternoon detailing the sale. That included the ministerial letter, the layout, a statement of all the payments made and the final payment paid.
They also give us an electricity letter saying that we are now the legal owners.
We then pay them an admin fee ( sorry I can't remember how much that was?)
We then take the electric letter to the electric company with our new contract and they switch the electric to our name.
There are no lawyers involved because there is no court registration because it is a compound.
In our case the land is registered to the compound till handover. Then once the development is fully complete the company turn it over to the council and residents are then able to register their own units in their own names. In about 2 years we should be able to do this. Once they hand over they give a list of all the owners in the compound. Once you register it you then become liable to tax.
Also because the unit is not registered in your name I guess that is why residents are able to sell when they want , without the 5 year ban on selling?
The above only applies to compounds.
Here you go:
Each compound has a company office. The development companies vary in size.
Ours is huge and owns many sectors. This is the procedure we followed to buy on ours.
We went to the a real estate agent and viewed the property. It was unoccupied and was from the original owner.
The owner had bought it using a mortgage with a few years left to pay.
It had electric meter in their name.
Our estate agent then arranged for the seller and us, plus him to go to the Head Office to do the exchange. Because it was on a compound there was no need for a lawyer as the Company acted as the lawyer.
The company showed us( the buyer) the Ministerial Document saying that they had ownership of the Development and land.
They then showed us the purchase documents from the original seller ( our seller). It showed every payment to the mortgage and how much was left to pay. The seller had a few thousand pounds left to pay in our case.
The company then drew up a new contract of exchange.
Before they could sell it they had to complete the mortgage payments so they could legally sell it.
The usual thing done in this situation is the buyer (us) pays the remaining balance and deducts it from the price.
So we paid the company the balance and they cleared the debt and issued a final payment document.
We then paid the seller his money less the balance we paid.
We paid cash and it was all done in the office.
The seller then goes with his cash.
We are then given a full contract which was written up that afternoon detailing the sale. That included the ministerial letter, the layout, a statement of all the payments made and the final payment paid.
They also give us an electricity letter saying that we are now the legal owners.
We then pay them an admin fee ( sorry I can't remember how much that was?)
We then take the electric letter to the electric company with our new contract and they switch the electric to our name.
There are no lawyers involved because there is no court registration because it is a compound.
In our case the land is registered to the compound till handover. Then once the development is fully complete the company turn it over to the council and residents are then able to register their own units in their own names. In about 2 years we should be able to do this. Once they hand over they give a list of all the owners in the compound. Once you register it you then become liable to tax.
Also because the unit is not registered in your name I guess that is why residents are able to sell when they want , without the 5 year ban on selling?
The above only applies to compounds.
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