A POLITICIAN is pushing for legislation to prevent Islanders from being left “vulnerable” to gazumping and gazundering when buying or selling property.
A proposition brought by Deputy Max Andrews calls for all residential property transactions to include a legally binding pre-sale agreement.
Deputy Andrews has also asked the States Assembly to decide whether there should be a financial penalty “to be paid by the seller or purchaser should they default on the agreement without a legitimate reason, to be stipulated in law”.
In the report accompanying his proposition, he argued that “no action” has been taken to address gazumping and gazundering in Jersey, despite the matter being subject to a Scrutiny Panel review in 2018.
Gazumping refers to instances in which a seller accepts a higher offer from another buyer despite already having agreed a sale, while gazundering is where a buyer places pressure on a seller by reducing their offer close to the completion of a sale – often just before contracts are exchanged.
Deputy Andrews said: “As politicians, we must instill confidence in the housing market for both buyers and sellers.
“It is evident that without legislation, Islanders will continue to be vulnerable to gazumping and gazundering.
“The 2018 panel found that lawyers often advise against pre-sale agreements – advice which may leave clients exposed to the very risks they are trying to avoid.”
Deputy Andrews added: “This reinforces the case for legislation to modernise the property transaction process to better protect Islanders.
“With legal recourse in place, buyers and sellers would have greater confidence in the process and some financial recompense should a transaction fail.”
If approved, the legislation would include exceptions for certain transaction types such as auctions, forced sales or transfers within a family or company.
Under the system proposed by Deputy Andrews, a signed pre-sale agreement would establish a fixed completion period with an exclusivity clause preventing the seller from accepting other offers.
Estate agents and sellers would also be prohibited from advertising the property after an
agreement is signed.
“If either party withdraws without a legitimate reason, then the defaulting party
would be required to pay a financial penalty,” Deputy Andrews explained.
“Sellers and agents must not mislead buyers. If they do, the buyer can withdraw
without penalty.”
His proposition asks that the Chief Minister bring forward legislation for approval by June 2028, and to establish a list of exceptions to the financial penalty. It is due to be debated at the States sitting beginning on Tuesday 30 September.
