What laws in The Bahamas protect me from bank reposession?

The recent economic downturn has led an increase in the number of people who are unable to maintain their mortgage repayments on their homes. This has led to an increase in the number of home repossessions. Lenders have the right to repossess your home if you have defaulted on your mortgage payments. However, there are laws in place to protect borrowers from actions of unscrupulous lenders. Lenders are not entitled to repossess a home immediately. They should try to resolve the problem with you first and only use repossession as a last resort.  Lenders must notify you of your mortgage arrears and request that you pay them within a certain time, or by following a schedule of repayment.  At this point lenders will appreciate your communication with them and they may agree to a repayment schedule that is practical for you and your financial situation.  If you have been sent a demand for payment, a banking law attorney can outline your options.

If you fail to respond to the lender’s initial requests, they will typically notify you of their intention to sell the property.  This is not the only remedy a Lender has in these kinds of circumstances, however, it is definitely the most commonly used as it allows the Lender to act without having to seek an Order of the Court.

When the Lender seeks to exercise its power of sale over the property, the Lender is under certain responsibilities.  Firstly, Lender is under a duty to realise the best possible purchase price for the property - however, because they also have a desire to clear their account/arrears as soon as possible, there is a risk that the property will be sold under value. This will be at your expense.

Prior to repossession, you should secure two independent surveyors valuations or sales particulars from real estate agents, including the asking price.

 

You should then take the following steps:

1. Do not trash the property or leave it in a messy/unclean state. Treat the property as if you were trying to sell it yourself for the best price. Every extra penny you get will be to your future benefit.
2. Make an enquiry with the lender to confirm the date that their real estate agent was instructed (if you think the agent is unsuitable - for example they are not local or they specialise in a different sector of the property market, tell the lender in writing).  In a lot of cases Lenders will market the properties by listing them in the newspapers.  They will list the property usually by stating the appraised value.  You may wish to obtain your independent appraisal to verify the appraised value and you should notify the Lender of your intention to do so immediately.
3. If the listing price is way below value, set out your concerns in writing. Note - do not demand that the property be listed at an unreasonable level, especially in a cool housing market - it will take longer to sell, and your liability for mortgage will simply increase while the interest on your loan continues to accrue.

If you believe your home is about to be repossessed, you are advised to seek legal advice as soon as possible.  An expert attorney will be able to inform you of your options and may be able to negotiate with your Lender to find an alternative solution.

Disclaimer

While we have made every effort to provide accurate information, the law is always changing and affects each person differently. This information is no substitute for specific advice about you personally and we will not be liable to you if you rely on this information.If you require specific advice you can contact us by clicking here.

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