Trinidad And Tobago
Real Estate Practices in Trinidad & Tobago
Overview of Trinidad & Tobago
The Republic of Trinidad and Tobago comprises of two islands at the southern-most end of the Caribbean archipelago. Trinidad – the larger of the two islands – has an area of 4,828 sq km (1,864 sq mls) and is situated 10 km (7 miles) from the east coast of Venezuela. Tobago is 32 km (20 miles) off the north-east coast of Trinidad and has an area of 300 sq km (116 sq mls). The islands are a 3 hour and 19 minute flight from Miami, 4 1/2 hours from New York and 58 minutes from Caracas.
Trinidad and Tobago has a combined population of 1.3 million and it is a country rich in cultural diversity and natural resources that has one of the highest per capita incomes (US$13,340 in 2006) in Latin America and the Caribbean. The economy is largely based on oil and gas, which currently account for 40 percent of GDP and 80 percent of exports, but only 5 percent of employment in this field. The country has become a major financial center in the Caribbean and Trinidad and Tobago is a leader in the Caribbean regional integration effort, including the Caribbean Community (CARICOM) Single Market Economy, which went into effect January 1, 2006.
Trinidad is very diverse with its array of flora and fauna yet concentrating on the industries such as natural gas and oil, manufacturing and some agriculture. Tobago is our real tourist attraction as it is still quite unspoiled and has the lovely beaches with the beautiful turquoise waters surrounding it (a diver's paradise!).
Real Estate Practices within Trinidad & Tobago
Like many other countries, there are no laws yet passed for the licensed practice of selling real estate in the country. However, the Cabinet Note has been passed that this law is to go into effect on the next sitting of Parliament dealing with real estate licensing at which point it will become law. The Association of Real Estate Agents will then be in charged with regulating the industry.
The Association of Real Estate Agents (AREA) was founded in 1989 and has been working hard for many years at trying to get legislation for the proper practice of real estate in Trinidad and Tobago. It is hoped that this legislation will be passed within 2013. Active registrants at AREA are over 150 dealers/brokers and over 400 sales people.
The standard brokerage commission on sales in Trinidad & Tobago is payable by the seller and is usually due and payable on receipt of a deposit and the signing of a legally binding agreement for sale/purchase. However, due to the depression in the 1980's a lot of concessions were given to those struggling to sell their home in those times and allowing the Broker's commissions to be paid at the end of the sale instead. This created a false impression that this is the norm and to this day many Vendor's will only pay the commission at the end of their sale.
Commission Structure of Trinidad & Tobago
The structure of the commission is as follows: five per cent (5%) on the first two Million ($2,000,000 TT) Dollars of the purchase price, four per cent (4%) on the next Three Million Dollars ($3,000,000 TT) and 3% on any excess over Five Million Dollars ($5,000,000 TT).
Other selling costs are broken down as follows:
Stamp Duty: 5% - 10% paid by the purchaser (this is a tier system dependent on the price of the property being bought)
Attorney fees: 1.5% to 3% paid by the purchaser
Preparation of contract: No charge if done by Real Estate Agent, but if done by a lawyer cost is approximately TT$750.00 purchaser.- TT$900.00 paid by the purchaser
Valuation of the property: 1/4 of 1% to 1/3 of 1% usually paid by the purchaser.
Bank fees: These vary with the different institutions but can be another 1.5% to 3% paid by the purchaser.
Foreigners may purchase property in Trinidad and parts of Tobago (in some parts of Tobago, foreign buyers will need to apply for a license to purchase) quite freely and may access mortgage financing provided they are qualified. If the transaction is non-financed (cash) completion is anywhere from 15 – 45 days. If it is subject to financing, a time period of 60-90 days should be anticipated.
Foreigners are free to purchase up to one (1) acre of land with a house and up to 5 acres of land with a commercial structure with no problems. Should they wish to purchase more that the stipulated amount allowed they will have to apply for a license to own the excess.
In Trinidad and Tobago, the real estate agent/broker prepares an offer to purchase and, in most cases, prepares the agreement for sale, but the attorney will sometimes prepare the agreement and will look after the transfer and mortgage documents if any and follows through the sale to completion.
In cases where the vendor of a property lives abroad or is unable to mobilize getting all the relevant documents to the purchaser's attorney to prepare the deed, the real estate agent will assist and do some of the running around to ensure the ease of passage for the transaction to take place.