Property Fraud in Jamaican Divorce Proceedings: Hidden Assets and Fraudulent Transfers

• The Property (Rights of Spouses) Act gives both spouses an equal claim to the family home in Jamaica.
• A spouse who transfers or encumbers property to defeat a PROSA claim commits a fraudulent act.
• Courts have jurisdiction to set aside transfers made to defeat a spouse’s property rights.
• A caveat should be lodged at the NLA as soon as a matrimonial property dispute begins.
• Disclosure of all property assets is mandatory in Jamaican divorce and separation proceedings.

The Property (Rights of Spouses) Act, which governs the division of matrimonial property in Jamaica, entitles each spouse to an equal share of the family home and to a fair share of other family property on the breakdown of a marriage or five-year cohabitation. This legislative protection has prompted some spouses who anticipate a separation to take steps designed to reduce the value of matrimonial property before the other spouse can assert their rights. These steps range from selling property at undervalue to a relative or associate, to granting a mortgage that reduces the equity available for division, to simply failing to disclose the existence of property — particularly land in rural parishes that the other spouse may not be aware of. Each of these tactics may constitute fraud against the deprived spouse and is potentially reversible by the courts.

Detecting and Challenging Concealed Transfers

A spouse who suspects that matrimonial property has been transferred or encumbered to defeat their claims should act quickly. The Supreme Court of Jamaica has jurisdiction to set aside a transaction if it is satisfied that the transfer was made with the intent to defeat a spouse’s rights under PROSA — even if the third-party transferee paid some consideration. Comprehensive NLA searches of any property the other spouse is known to own — or is suspected of owning — should be conducted as early as possible, and a caveat should be lodged on any property that is the subject of a dispute. Financial disclosure orders in the divorce proceedings can compel the spouse to reveal the full extent of their property holdings, and non-disclosure is contempt of court. Forensic accountants and property investigators can assist in identifying assets that have been concealed or moved into third parties’ names.

The Family Home and Third-Party Purchasers

The family home occupies a special position under PROSA: each spouse is entitled to a half-share regardless of whose name appears on the title, and this right can override a transfer to a third party in some circumstances. A purchaser of a property that is or was a family home should be aware that the non-owning spouse may have rights under PROSA that were not disclosed at the time of sale. Prudent buyers of residential properties therefore instruct their attorneys to enquire whether the property being purchased has been used as a family home and whether the consent of any non-title spouse has been obtained. Where such consent has not been obtained, and PROSA rights exist, the transfer may be challengeable even after completion, creating a title defect that could prove costly to resolve.

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