Homebuyers and sellers in Jersey could soon face financial penalties for withdrawing from property transactions without a legitimate reason, under new proposals aimed at reforming the island’s housing market.
A proposition put forward by Deputy Max Andrews would make pre-sale agreements legally binding in most residential property transactions.
The proposed legislation would introduce financial penalties for either party if they pull out of a sale after an agreement has been reached – unless for defined legitimate reasons such as mortgage refusal, serious property damage, or the collapse of a chain.
The measure is designed to reduce instances of gazumping – where sellers accept a higher offer after already agreeing to a sale – and gazundering, in which buyers lower their offer just before contracts are exchanged.
DESTABILISING TRANSACTIONS
Both practices, though legal, are widely criticised for destabilising transactions and increasing the financial and emotional strain on participants.
According to Andrews, the move would bring greater confidence and fairness to the housing market.
“It is evident that without legislation, islanders will continue to be vulnerable to gazumping and gazundering,” he said.
“With legal recourse in place, buyers and sellers would have greater confidence in the process and some financial recompense should a transaction fail.”
LAST MINUTE WITHDRAWAL
The BBC reports that the proposal follows complaints from local residents who have lost significant sums due to last-minute withdrawals. One islander reported losing more than £1,000 after being gazumped.
If approved, the new rules would apply to the majority of residential sales but exclude certain categories such as family or company transfers, auctions, government-led sales, and transactions involving hotels or guest houses.
The earliest the proposition can be debated by the States Assembly is 30 September 2025. Andrews has asked the Chief Minister to ensure the framework is formally adopted no later than June 2028.
