Control of Housing and Work (Jersey) Law 2012: Proposed policy change to end the sale of newly created residential units by way of share transfer as a condition of granting consent under Article 20

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A decision made on 24 December 2021

Decision Reference: MD-C-2021-0113
Decision Summary Title :	Proposed policy change to end the sale of newly created residential units by way of share transfer as a condition of granting consent under Article 20 of the Control of Housing and Work (Jersey) Law 2012		Date of Decision Summary:	10 December 2021
Decision Summary Author:	Team Manager		Decision Summary: Public or Exempt? (State exemption under FOI Law)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title :	Proposed policy change to end the sale of newly created residential units by way of share transfer as a condition of granting consent under Article 20 of the Control of Housing and Work (Jersey) Law 2012		Date of Written Report:	10 December 2021
Written Report Author:	Team Manager		Written Report: Public or Exempt? (State exemption under FOI Law)	Public
Decision and Reason for Decision: The Deputy Chief Minister, in his responsibility for the Control of Housing and Work (Jersey) Law 2012, approved the proposed policy change as a condition of granting consent under Article 20 of the Control of Housing and Work (Jersey) Law 2012. The decision is in line with Action 4D of the Creating Better Homes Action Plan (R.59/2021) published by the Minister for Housing and Communities and will require all new units of residential accommodation to be sold through freehold transactions.
Resource Implications: There are no financial or staffing resource implications arising from this decision.
Action required: Team Manager to arrange for policy change to be implemented with immediate effect for all consents granted under Article 20 of the Control of Housing and Work (Jersey) Law 2012.
Signature:		Position: Senator Lyndon Farnham Deputy Chief Minister
Date Signed:		Date of Decision (If different from Date Signed):

Control of Housing and Work (Jersey) Law 2012: Proposed policy change to end the sale of newly created residential units by way of share transfer as a condition of granting consent under Article 20

MD-C-2021-0113

Date of Report: 10 December 2021

Proposed policy change to end the sale of newly created residential units by way of share transfer as a condition of granting consent under Article 20 of the Control of Housing and Work (Jersey) Law 2012

Introduction

The use of share transfer transactions was developed in Jersey to overcome two barriers which have since been removed by way of legislation.

The Minister for Housing and Communities has recently published his Creating Better Homes Action Plan (R.59/2021). The action plan sets out proposals under five priorities including priority 4 – help to own a home.

One of the actions under this priority relates to share transfer units. The proposed action is as follows:

ACTION 4D – End the creation of new share transfer units

The Government will remove the ability for developers to create new share transfer dwelling units

The historic restrictions of Jersey conveyancing laws lead to the development of share transfer companies to support the purchase of flats within a residential building. Now that conveyancing laws allow flying freehold purchase, The Minister for Housing and Communities will work with the Chief Minister to end the creation of new share transfer units.

This report sets out the related legal and policy background and requests the Chief Minister to amend his current policy administration to prevent the creation of additional residential units for sale by way of share transfer.

Legal Background

The creation of new residential units by a legal person is controlled through Article 20 of the Control of Housing and Work (Jersey) Law 2012.

20 Specified transactions concerning companies etc

(1) In this Article “legal person” includes –

(a) any body of persons, corporate or unincorporated;

(b) the Crown; and

but excludes Her Majesty in her private capacity and any other individual.

(2) A legal person shall not acquire land as a party to a specified transaction except with the prior consent in writing of the Minister.

(3) A legal person may make an application to the Minister for consent under paragraph (2) in such form and accompanied by such documents as the Minister may determine and accompanied by such fee as the Minister may prescribe.

(4) In deciding whether to grant consent under paragraph (2), the Minister shall take into account whether consent, can, in the best interests of the community, be justified, with particular regard to the supply and demand of property and, where relevant, to promoting ownership of residential property by persons with Entitled status.

(5) Subject to paragraph (7), the Minister may grant consent under paragraph (2) subject to such conditions as he or she thinks fit.

Article 20 can therefore be used by the Chief Minister to place conditions on the sale of land or property to a company which would require the company to sell any units of residential accommodation out of the company name at the end of the development by flying freehold, rather than by share transfer, to persons with the appropriate residential status.

The preamble to the 2012 Law makes it clear that the law can be used to control housing transactions in this way to safeguard the availability of work and housing in Jersey for people with strong connections or associations with Jersey and, more generally, in such a way that is in the best interests of the community in Jersey.

A condition of this nature can also be justified on Human Rights grounds given that it is proportionate to a legitimate aim of promoting the ownership of residential property by persons with an appropriate residential status.

Current Market Position

The ability of a non-locally qualified person to purchase share transfer property has been identified as a possible contributory factor to the current high prices and rapid inflation within the housing market. The ability to market properties off Island has been seen as an advantage to developers to ensure all units would be sold and investors would continue to have confidence in the market, however, current market conditions suggest that it is unnecessary to provide for off Island sales as there is considerable unmet demand within the local market.

Recommendation

The Department recommends to the Chief Minister that the conditions attached to permissions granted under Article 20 of the Control of Housing and Work (Jersey) Law 2012 should be amended with immediate effect to ensure that all residential units created by a company are sold, at the end of the development, by way of a freehold transaction to persons with an appropriate residential status.

Team Manager

10/12/2021