Monday 24 September 2012

BAHAMAS - BUILDING & CONSTRUCTION LAW (THE BASICS)

 (A) Building permits

Building permits are granted under the Building Regulation Act for all construction.  In Nassau, application is made to the Ministry of Works.  In the Family Islands, district councils appoint boards which issue building permits for each district.

(B) Building contracts

The internationally recognized forms of building contracts are widely used, especially for larger projects.  For example, the forms of the American Institute of Architects are common for large and medium projects, supplemented to suit local conditions.  There is an ample and varied reservoir of architects, contractors, sub-contractors, and other personnel to take your project from the design concept to ultimate completion.  For smaller projects, such as most home construction, an exchange of correspondence and construction documents, such as the approved plans, is usually sufficient.  Legal advice is also readily available.
 
(C) Completion and formalities
 
A building should be more than 95% complete before it is accepted.  All the remedial or defective work should corrected before practical or substantial completion.  The architect and his consultants check the site and prepare a punch list of work still to be done by the contractor and sub-contractors.

(D) Construction deficiencies and warranties 
 
Provisions relating to deficiencies and warranties are usually covered by the building contract.  It is left to the architect to determine whether the building can be accepted with certain deficiencies.  It is still the contractor’s responsibility to correct those deficiencies within the stipulated time.  Warranties are issued before the architect executes his certificate of substantial or practical completion.  Arbitration is commonly used to deal with construction disputes.  

This post is for your information only and is not intended to constitute a legal opinion.  If you require specific advice, you should contact a Bahamian construction law attorney.  You can contact a construction law attorney in The Bahamas by clicking here.

Thursday 20 September 2012

Bahamas committed to compliance



Jurisdiction keeps in place rigorous transparency legislation, whilst respecting client confidentiality
Published:
Date:
Updated:
Author:
The Bahamas Investor Magazine
July 13, 2011
September 5, 2011
Tosheena Robinson-Blair

As international pressure persists for offshore financial jurisdictions to improve banking transparency, The Bahamas continues to take its compliance obligations very seriously, employing considerable resources to significantly enhance systems designed to detect and report suspicious money laundering activities.

“We believe that The Bahamas has in place a robust and effective anti-money laundering and countering the financing of terrorism (AML/CFT) framework, which includes a compendium of legislation and guidelines,” says Central Bank of The Bahamas governor Wendy Craigg.

Local laws relating to money laundering include the Financial Transactions Reporting Act, 2000, and Regulations made under the act which, together embody the standards to which financial institutions must adhere when confirming the identities of their customers. 

Furthermore, there is the Financial Intelligence Unit Act, 2000, the Financial Intelligence (Transactions Reporting) Regulations, 2001, and the Anti-Terrorism Act, 2004. The Bahamas’ Financial Intelligence Unit (FIU) has issued guidelines on reporting of suspicious transactions. All financial sector regulators have also issued AML/CFT guidelines that address customer due diligence issues for financial institutions. 

Know your customer
“The Bahamas’ AML/CFT framework requires financial institutions that are licensed or registered in the jurisdiction to conduct due diligence on their customers and to have in place adequate know-your-customer (KYC) policies and procedures,” says Craigg. 

“For example, licensees of the Central Bank are required to apply their customer due diligence procedures on a risk sensitive basis,”?she explains. “This means that they should seek to have sufficient information about their clients to enable the financial institution to gauge how risky the client’s business is.” 

In this regard, Craigg says, enquiries should cover whether the client’s business poses a normal, low, or high risk to the institution’s reputation. This risk factor analysis takes into consideration the jurisdiction in which the client’s business is based, the nature of the business and the client’s identity or position. 

“To illustrate, a high ranking foreign government official would be regarded for AML/CFT purposes as a ‘politically exposed person’ and their business should be treated as high risk,”?says Craigg. “All customer account activities are required to be monitored by financial institutions, and customers who have been assessed as high risk should receive enhanced monitoring, to detect changes in their account activity and to determine whether that activity is consistent with information obtained from the client at the time the account was established.” 

These, along with other measures, seek to maintain the integrity of this jurisdiction. 

Under scrutiny
Over the past decade there’s been a surge of attention directed towards money laundering, with offshore financial institutions around the world coming under pressure to expand their anti-money laundering legislative framework and adopt international best practices.

Money laundering washes away a dirty money trail, masking the true source of income. The funds reappear in the market in a legitimate form. Hence the name, “money laundering.” Other times, an individual’s wealth may be legitimately gained, but the money laundering process helps hide huge sums in a bid to evade taxes.

One International Monetary Fund (IMF) estimate pegs the annual, global amount of money laundered between 2-5 per cent of the world’s $60 trillion gross domestic product (GDP).

According to the United States Internal Revenue Service (IRS), “money laundering creates an underground, untaxed economy that harms our country’s overall economic strength.”

Last year, the US waged an all out war to eradicate tax evasion. An IRS programme–designed to encourage American taxpayers to disclose previously hidden offshore accounts–prompted 14,000 Americans to come forward and settle unpaid taxes in exchange for leniency. The disclosures helped provide a road map for a crackdown on offshore tax havens, with the IRS subsequently opening criminal investigation offices in Beijing, Panama City and Sydney.

By 2013, the US government intends to implement new reporting requirements for offshore accounts that would penalize foreign banks for failing to disclose certain account information. Italy, France and Germany have also heightened their scrutiny and moved to prosecute banks and officials suspected of helping their citizens evade taxes.

Trusted advisor
A long established and leading offshore centre, The Bahamas has a proven track record as a trusted financial advisor. In carrying out its fiduciary duties, the Central Bank and other financial sector regulators conduct on-site inspections of the financial institutions, in order to test the adequacy of their AML/CFT policies and procedures.

“The Bahamas continuously reviews its AML/CFT framework to ensure on-going compliance with international standards, while maintaining a regulatory environment that is conducive to doing business in the jurisdiction,” says governor Craigg. 

As a member of the Caribbean Financial Action Task Force (CFATF), The Bahamas’ anti-money laundering and countering the financing of terrorism regime has been the subject of peer reviews to assess compliance with the Financial Action Task Force’s 40 + 9 recommendations on money laundering prevention and countering of financing of terrorism. These peer reviews help to assist The Bahamas in improving its anti-money laundering and KYC framework. 

Strictly confidential
Although bank secrecy may be decreasing, officials say the well-established confidentiality for those who live or conduct business in The Bahamas will continue.

“The Bahamas fully adopts the core principle of the United Nations that individuals have the right to privacy,” says Wendy Warren, chief executive officer and executive director of the Bahamas Financial Services Board (BFSB), an agency that represents and promotes all sectors of the financial services industry. 

This right to privacy is supported through a number of measures. The Data Protection Act enshrines the manner in which client information is retained and shared. Furthermore, regulatory oversight ensures that financial institutions, which undertake rigorous due diligence on clients, maintain and handle client data according to agreed protocols. These protocols are in accordance with published law and policy. 

“Where clients feel that their data has been mishandled there are avenues of redress through the courts,” Warren advises. “Moreover, this right of privacy is embodied in the tax information exchange agreements. Even after the government undertakes very careful screening of any request, an individual has the right to pursue avenues before the court to challenge sharing of any information.”

Investing in Condominiums


Condominiums, which are very popular forms of investments, are governed by the Law of Property and Conveyancing (Condominium) Act, Ch. 139. They are acquired as second or vacation homes usually by foreign investors.

The Act makes it possible to own the fee simple of a unit while certain areas like paths and laundries are owned in common. Moreover provision has to be made for the passage of water pipes, electrical and air conditioning conduits, and similar services, through the privately owned individual units. The common areas are managed by a Management Company which is operated by the unit owners. 

The unit owner holds an undivided share of the common property in proportion to the value of his unit, and the latter determines the extent of his voting rights in the Management Company.

The Act requires that there be drawings and plans (section 5), and the Company must have bye-laws (sections 14 and 15). 

The cost of the maintenance of the common property is met by the unit holders in proportion to their entitlement. 

The basic document is the Declaration by which property is subjected to the provisions of the Act, and section 4 sets out the contents of this instrument. These include a description of the property and its precise location, a schedule presenting the unit entitlement of each unit, a description of the common property, the bye-laws applicable to the property, a statement of the rules and restrictions covering the use of and transfer of the units, and other relevant matters.

This post is for your information only and is not intended to constitute a legal opinion.  If you require specific advice you should contact a Bahamian real estate attorney.  You can contact a Bahamian real estate attorney by clicking here.

The Stages of a Property Purchase in The Bahamas

The Agreement for Sale

Like many other countries, the laws of The Bahamas govern contracts for the sale of real estate. They are provided for by Section 3 of the Conveyancing and Law of Property Act, Chapter 38. Such contracts by Section 4 of the Statute of Fraud, Chapter 154 are required to be in writing, otherwise, no legal proceedings can be taken in respect thereof. It is perhaps necessary to emphasize that while many contracts which are made verbally are enforceable, no agreement for the sale of land can be enforced unless it is in writing. 

Therefore, the investor would be well advised to read and understand the contents of the contract which are usually set out in three parts:
1. The particulars of sale;
2. The conditions of sale; and
3. A memorandum to meet the requirements of the said Conveyancing and Law of Property Act.
The Particulars of Sale 

The Particulars of Sale show:
a. The parties involved in the sales agreement;
b. The physical description of the property which may include an attached property plan as part of the description;
c. The description of the estate or interest of the Vendor in the land, usually assumed and stated as a fee simple (outright ownership) in possession free from encumbrances;
e. The document must state whether the property is freehold or leasehold;
f. The benefits passing with the land, such as easements and restrictive covenants which are for the benefit of the land being sold; and
g. The burdens affecting the land such as restrictive covenants, easements, leases, exceptions and reservations.
The Conditions of Sale
The Conditions of Sale are the second part of the Agreement for Sale. The special conditions commonly related to this section are:
a. The date of completion when the conveyance executed by the Vendor is exchanged with the Purchaser for all purchase monies;
b. The purchase price to be paid on or before the completion, the deposit to be paid usually upon signing the agreement, and the payment of the balance at completion;
c. The deposit which is usually ten percent (10%) of the purchase price paid over to the Vendor’s attorney to be held in escrow (money held conditionally) until the Purchaser’s attorney is satisfied that all the Vendor’s obligations under the contract are met;
d. The root of title as stipulated in Section 3 (4) of the Conveyancing and Law of Property Act requires the land title to be searched for a good root of title over a period of thirty years. This consists of the conveyances of the property from one person to another for valuable consideration over that thirty year period. The period may be shortened by commencing with a Crown Grant or lease, or a Certificate of Title issued pursuant to the Quieting Titles Act; and
e. The conditions of sale must state the capacity in which the Vendor is selling, that is, as the beneficial owner, a trustee or mortgagee.
Standard Conditions

The third part of the Agreement of Sale consists of Standard Conditions. These standard conditions are provided for by the Conveyancing and Law of Property Act. They include:
a. The giving of vacant possession to the Purchaser by the Vendor at completion;
b. The production of an Abstract of Title, if required. The Abstract of Title is a schedule list of relevant back title documents which confirm the ownership right of the Vendor going back to a good root of title. The abstract may be waived, but the Vendor must still produce the back title information;
c. Requisitions on Title are also required. The contract provides for a specified period of days within which the Purchaser’s attorney can raise questions on the documents and information provided by the Vendor’s attorney. He also poses questions which may result from his own searches in the Registry of Deeds and Documents, the Cause List where judgments, orders and rulings, if any, are recorded against the Vendor or his predecessors in title, and the Companies and/or Probate Registries. The Vendor’s attorney is also given an opportunity and time frame within which to respond. The contract usually provides for remedies if material requisitions are not satisfactorily answered after the stated period;
d. There is usually a provision for the Purchaser not to take possession until completion;
e. Sundry expenses and obligations attached to the land, such as real property taxes, utility charges and other contractual arrangements which must be paid in full to completion date are accounted for;
f. The contract may provide for notices to complete to be given by either party in cases where the other fails to meet his obligations at the times stated in the contract; and
g. The agreement may provide for real estate commissions to be paid to the realtor.
Preparation Sales
of agreements are usually prepared by attorneys, but in many instances, the real estate agents provide their own. It is important to remember that once a contract is executed, the parties involved will be bound by its terms, and it does not excuse the performance of any provision if a party has not been advised by an attorney, or if a party states that he did not understand what he signed. 

The Conveyance 

When property is acquired, the purchaser/investor is given a conveyance, which is sometimes referred to as a deed, or sometimes as an Indenture, as evidence of ownership. A conveyance is a document which legally transfers ownership from one party to another. It gives details of the actual transfer. It is divided into various parts: 

1. Date
2. Parties
3. Recitals
4. Testatum
5. Receipt
6. Operative Words
7. Description of Property
8. Easements et al
9. Habendum
10. Testimonium
11. Affidavit of Due Execution
a. A Conveyance commences with a date even though it takes effect from the date it is actually delivered to the purchaser.
b. The Parties include the full names, street addresses, and occupations of the Vendor and the Purchaser for purposes of identity.
c. The Recitals are the narrative and introductory recitals which indicate whether or not the Vendor owns the property free and clear from encumbrances. If there are encumbrances or restrictions, these are usually indentified. The purchase price is stated in a certain currency.
d. The Testatum, Latin for “known on good evidence”. This commences with the words “Now this conveyance witnesseth”.
e. The Receipt clause confirms the payment from the purchaser and the receipt by the Vendor of the purchase price, which is also referred to as the Consideration.
f. By Operative Words, the Vendor conveys as beneficial owner to the Purchaser the named property. The phrase “as beneficial owner” is very important and in a conveyance for valuable consideration implies that:
i. the Vendor has good title to convey;
ii. the Purchaser can enjoy the property quietly without interference;
iii. the land is free from encumbrances; and
iv. the Vendor will execute any further deeds to assure the Purchaser of good title.
g. The Description of Property is a written brief description of the land which is generally placed in a schedule with a land surveyor’s plan exhibited to the conveyance.
h. Easements, such as rights of way over some other property, which are to be granted, are inserted in the conveyance, as well as references to restrictive covenants (solemn agreements that are binding on all parties) to which the property is subject and any exceptions and reservations in favor of the Vendor.
i. The Habendum basically specifies the owner’s rights as well as how those rights are limited. It may also specify time frame or certain prohibited activities. It usually commences with the expression, “To Hold” and continues “unto and to the use of the Purchaser, his heirs personal representatives and assigns in fee simple”. Where the Purchaser is a company, the expression is, “To Hold unto and to the use of the Purchaser, its successors in title and assigns in fee simple”.
j. The tenth item on the conveyance is the Testimonium clause. This clause indicates the proof, evidence, and witness and in layman’s terms “seals the deal”. The clause may state that, “In WITNESS whereof the Vendor and Purchaser have hereunto set their respective hands and seals”. Only in cases where the Purchaser enters into a covenant with the Vendor, e.g. to observe restrictive covenants, is his name mentioned in the Testimonium, and he does not execute the conveyance.
k. Finally, an Affidavit of Due Execution is executed. An affidavit, (in Latin literally means “trust affirm”), is a written declaration made on oath before somebody authorized to administer oaths. The affidavit is sworn by the witness to the signing of the conveyance by each party and such affidavit will have to be annexed to the conveyance.
The above notes describe a simplified form of a conveyance. Depending upon the situation involved, many conveyances can become quite complicated. For example, there may be more than one Purchaser or Vendor, and the Vendor may be acting in the capacity of a mortgagee or personal representative.
So far, the investor has found a property to invest in, and has entered into an Agreement of Sale; and the attorneys have drawn up the conveyance. The next step in the process is to stamp then record the conveyance. 

Stamping and Recording

As a matter of raising government revenue most deeds and documents are required to be stamped in accordance with the Stamp Act.

The stamp duty rates currently are as follows:
Amount Rates
Up to $20,000 4%
Over $20,000-$50,000 6%
Over $50,000-$100,000 8%
Over 100,000-$250,000 10%
Over $250,000 12%

Upon stamping, the Registration of Records (Amendment) Act 1989 provides for deeds, documents and property grants to be recorded. Any deed which is first lodged and accepted for record in the Registry has priority and preference over other deeds and documents for the same property notwithstanding the latter was executed before the said deed was lodged for recording. 

The further purpose of recording is to provide notice to the world of all transactions pertaining to the property. 

This post is intended for your information only and is not intended to constitute a legal opinion.  If you require specific advice, you should contact a Bahamian real estate attorney.  You can contact a Bahamian real estate attorney by clicking here.

Monday 17 September 2012

By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net

A key Ministry of Finance adviser yesterday said he had asked government officials to probe whether there was “any merit” in complaints that the first-time buyer Stamp Duty exemption was being misinterpreted, agreeing that the situation might need to be clarified.

And James Smith was also in agreement with his minister of state for finance successor, Zhivargo Laing, both men telling Tribune Business it was “never the intent” of either the PLP or FNM governments to combine the conveyancing and mortgage prices to create an aggregate transaction value.

This is the main complaint that has been made to this newspaper, namely that by aggregating the conveyancing and mortgage values, the Treasury was valuing many real estate transactions at above the $500,000 first-time buyer exemption threshold. As a result, their applications were being turned down.
Pointing out that he was waiting for government officials to return with the investigation results, Mr Smith confirmed: “I’ve asked someone to look into the complaints and see if there’s any merit. I’ve asked, but not been answered.”

Agreeing that the Government may need to clarify the exemption, which is enshrined in law via the Stamp Act, Mr Smith told Tribune Business: “One should be consistent in interpretation. It shouldn’t be one way or the other.

“What will probably need to happen is that the Government needs to look at it and clear it up, so we’re all on the same page. We should get clarity.”

Explaining the intent behind the first-time buyer exemption, which was introduced by the first Christie administration for properties valued at $250,000 or less, Mr Smith said it was an economic stimulus designed to assist middle and lower income Bahamians, not a revenue raising measure.

“The intent was to provide an additional incentive to the real estate and housing industry to stimulate construction activity,” he explained. “It was not intended to be a revenue measure; just the reverse. It was meant to be an incentive to the housing sector.”

The Ingraham administration extended the first-time buyer Stamp Duty exemption and widened its scope, increasing the value to properties valued up to $500,000, and also including vacant land in the deals that could attract the incentive.

Mr Smith, though, indicated that he disagreed with the latter reform, telling Tribune Business: “It should have been a development incentive. Unless the intent was to build immediately, we should not be lending a stimulus to hoarding or speculative investments.”

He agreed, though, that the intention was not to enable vendors to avoid their portion of the Stamp Duty, Tribune Business has been told that transactions involving first-time buyers are increasingly being structured so that the purchaser pays 100 per cent of the Stamp Duty, not 50 per cent as is the norm.

This is being designed so that the seller avoids Stamp Duty, but Mr Smith added: “I don’t think that was the intention. It says the first-time buyer, not the first-time seller.”

His successor as minister of state for finance, Zhivargo Laing, told Tribune Business that several instances where first-time buyers were denied the exemption, after the Treasury added the mortgage and conveyancing values together to determine an aggregate, had occurred under the Ingraham administration.

These decisions, though, had been reversed, and Mr Laing said the important issue was how the exemption was being interpreted by the Christie government.

“The intention was never, if you had a $200,000 purchase and a $200,000 mortgage, that the two of those were combined,” Mr Laing said.

“It was one transaction. The transaction is a $200,000 purchase of a house, and it’s within the $500,000 limit.”

Agreeing that the Government needed to clarify the situation for the benefit of all concerned, Mr Laing recalled how the Ingraham administration went into action when the Treasury started using previous conveyancing documents to argue that real estate transactions should attract greater Stamp Duty liabilities than their current prices.

“We did the necessary to say to the Treasury this is the way the matter is to be handled,” Mr Laing added. 

And, referring to the first-time buyer exemption, he said: “This is an issue that any government has to do the necessary to clarify. It’s not what happened in the past, but what the situation is today.

“Persons that have concerns about this should be asking the Government what should be the case.”

If you are having issues regarding your stamp duty exemption application, you can contact a Bahamian property attorney.  You can contact a Bahamian property attorney by clicking here.

Wednesday 12 September 2012

Subdivisions in The Bahamas




Assented to by Parliament on March 16th, 2010 the Act became law in the Bahamas with power to repeal the Town Planning Act, the Private Roads and Sub-divisions Act, the Private Roads and Subdivisions (Out Islands) Act and the Conservation and Protection of Physical Landscape of The Bahamas (Quarrying and Mining Zones) Order, 1997.

The Act however, is not yet in effect but the entirety or different sections thereof shall come into force on such dates as the Minister for the Environment may appoint by Notice published in the Gazette. It is anticipated that the Act or sections thereof will first come into force in New Providence with either simultaneous or eventual application to any Family Island or Family Island Government District and the Port Area of Grand Bahama.

It has recently been stated by the Minister of the Environment that “The Government has determined to delay the coming into force, the implementation of the Planning and Subdivisions Act, until October 1st.” – The Tribune, Business Section, Monday July 5th, 2010.

In the interim a summary of key provisions under the Act follows:

1. Objects and Purposes:-

Among others the foremost object and purpose is to provide for a land use planning based development control system led by policy, land use designations and zoning.

2. Definitions of Mention:-

“Minister” unless specified, means the Minister responsible for the Environment.

“Land Use Plan” means a policy document showing existing and future planned land uses including lands to be protected from development.

“Development” means the carrying out of any building operation, engineering orother operations in, on, over or under land; the clearing of land, the severance or subdivision of land into four or more lots; or the making of any material change in the use or otherwise of any land or building, structure or part thereof and includes outdoor uses, an addition to, or the constructing, erecting, placing, relocating, altering or replacing of, a building or structure or part thereof.

“legal non-conforming use” means the use of any land, building or structure, including that lawfully under construction or for which a building permit is in effect, that is not permitted by existing zoning, if such use existed on the day the zoning was enacted.

“Severance” means the division of not more than four new lots from an existing lot, the adding of land to an existing lot, the making of lot line adjustments. In addition, rights of way and easements also require land severance approval.

“Subdivision” in relation to land most significantly means the division of a parcel of land, into five of more new lots, parcels or tracts from an existing lot in any division of which provision is made for the reservation of land for the construction of access roads, rights-of-way or easements if required.

“Zoning” means provisions that divide land into zones, prescribe the purpose for which land, buildings and structures in any zone may be used, prescribe the design standards allowed for development, and prohibit the use of land, buildings and structures for any other purpose.

3. Structure and Administration:-

Administration under the Act shall be carried out by a Town Planning Committee, a Department of Physical Planning and a Subdivision Appeal Board. The definitions of which follow below:-

Town Planning Committee (“the Committee”) - shall consist of seven (7) members holding office for a period of three (3) years. The Minister may after consultation with the Committee give such general direction to the Committee as to the exercise and performance of its functions as appear to the Minister to be requisite in the public interest and the Committee shall give effect to such direction. Each decision of the Committee shall be published on the Official Government Website and in the case of a Family Island on the Family Island Administrator Notice Board or other prominent place.

Department of Physical Planning (“the Department”) – shall consist of a Director and such other officers who shall be subject to the general direction and control of the Minister.

There shall be a Policy and Planning Division and a Development Review Division. A Register shall be kept by the Director of all applications, decisions, revocations or modifications of approvals, notices served, agreements made,
buildings of special or historic value, and approved Subdivisions and Severances. The Director shall be the technical adviser to Minister and chief executive officer and technical adviser to the Committee and shall have the authority to approve applications that meet planning and zoning standards and to enforce the provisions of the Act. The Director also has the right to enter premises to ensure there is no contravention of a provision of the Act or Approval.

Subdivision and Development Appeal Board – shall apply the procedures of Section 65 of the Act on hearing appeals; against any decision of the Committee relating to a development application, where the Committee fails to make a decision within four (4) months of receiving a complete development application, against an order of the Minister made under the provisions Section 24, against a decision of the Committee to extinguish the effect of a
restrictive covenant, against the decision of the Committee by any person who has an interest in the matter. An appeal from a decision of the Subdivision Appeal Board will be to the Supreme Court but only on a point of law and the Supreme Courts decision shall be final and binding.

While an appeal is pending no development may proceed on any land which is the subject of an appeal.

4. Land Use and Development Controls

In preparation of Development one should be familiar with application criteria considerations inclusive of the requirement for site plan approval and the provision of environmental impact statements, applicable land use plans
inclusive of secondary land use plans, all applicable zoning bye-laws and Orders as well as areas that are designated of architectural interest.

Criteria for Consideration of Applications – on submission of a development application the Committee shall consider; the health, safety, convenience and welfare of the present and future inhabitants, conformity to the Land Use Plan, the Zoning Bye-law, conformity to National Land Use Development Policies, the suitability of the land for the proposed Development, conservation of natural resources, preservation of natural resources and environmentally sensitive lands, flood control, adequacy of utilities and services, restrictions or proposed restrictions (if any) on the land or buildings and structures proposed to be erected thereon and the restrictions (if any) on adjoining lands, the adequacy of community services, the proposed grades and elevations of roads and adequacy of road links, dimensions of proposed lots in a subdivision, amount of land to be dedicated for public
purposes, population density of area, percentage of land to be cleared, height of surrounding buildings, coastline encroachment and previous applications submitted for subject land.

Areas of Architectural interest – located in the set boundaries of downtown Nassau defined in the Act shall be subject to special architectural policies in the Land Use Plan in order to protect historic building types and styles. Additionally, other areas of architectural interest or historical value on any island may also be made subject to special architectural policies in a Land Use Plan in order to protect historic building types and styles across the Bahamas. Environmental Impact Statements – shall be submitted to the Department as part of any proposed type of Development that may have significant effects on the environment due to its nature, size or location or when the Development is of national importance, or of regional impact.

Land Use Plans – prepared by or for the Department (after consultation with interested parties and at least one public opportunity where questions and suggestions may be presented) shall be available for every Island of the Bahamas and shall contain among other aspects, maps, schedules tables and other descriptive matter that illustrate written statements on goals and objectives and land use policy and land use designations from residential and industrial to conservation and tourism with existing and planned road and utility corridors taken into consideration and even areas that should not be developed.

Secondary Plans may also be prepared bringing greater detail to specific areas. All Development approvals (save legal nonconforming land uses) and zoning shall be in conformity with the Land Use Plan which shall be available with all current amendments for viewing and purchase at the Department of Physical Planning and posted on the Official Government Website. If a draft Land Use Plan has not received final approval by the Minister, the Committee shall in considering any application for development be guided by the prescriptions of the draft Land Use Plan.

Zoning Bye-laws – shall be adopted by the Committee for each Island of the Bahamas and approved by the Minister which shall zone all land and allow for existing uses, prohibit and regulate the use of land and erecting of buildings and structures except for such purposes as set out in the bye-laws and shall recognize and incorporate all zoning orders issued by the Minister. In the absence of a Zoning Bye-law for a particular Island, a generalized zoning code shall be adopted by the Committee in conformity with the governing Land Use Plan.

Zoning Orders – made by the Minister may prescribe areas where new buildings or Development may or may not be permitted, areas that are to be environmentally protected, identified for the purposes of agriculture, forestry, fisheries and may also provide development controls on specific areas.

Zoning Orders shall be in conformity with the Land Use Plan and any National Land Use Development Policies and if in conflict with a Zoning Bye-law shall prevail to the extent of such conflict.

Restrictive Covenants – in existing Developments will be impacted through the subsequent zoning of such land by the further restriction or addition to the uses already existing under a Deed or Conveyance which may even change the restrictions and uses permitted. After zoning all new restrictive covenants shall be in conformity with the zoning and cannot further restrict nor permit uses or restrict the ability of the land being developed than set out in such zoning.

Legal non-conforming use – of land or a building or structure on such land that has been zoned contrary to its current use shall nevertheless continue so long as such legal non-conforming use does not cease, expand its physical presence, sustain damages to more than half its physical size less foundation or is not sold or leased.

Site Plan Control – approval is required for all Developments unless exempt by the Minister, and the Committee must approve all plans before commencement showing the location, massing and conceptual design of the exterior
of all buildings and structures to be erected, the existing grading and proposed alteration in contour and elevation of the land, servicing facilities, vehicular facilities, pedestrian facilities inclusive of those with disability, storage and waste facilities, lighting facilities and boarder and landscape facilities.

Bonus Zoning – is an incentive that can be provided; authorizing the increase of height and density of a Development otherwise than permitted in a Zoning Bye-law in return for provision of additional facilities, preservation of important areas or any other public benefit deemed suitable by the Committee.

Parkland, recreational and open space dedication – will as a condition of Site Plan or Subdivision approval for residential purposes be necessary and must consist of acceptable land representing no less than five (5) percent of the total land developed.

Development Charges, Agreements and Performance Bonds may also be necessary and entered into in accordance with the Act on submission of application to the Committee.

5. Approval Authority

No person shall commence or carry out any Development of land, without having first applied for and obtained where applicable the approvals required under the Act. Any laying out of roads or water pipes, the clearing or filling in of land or preparatory construction without the required approval shall be in contravention of the Act.

Approvals - that may be required for the Development of land from the Committee include, Land Use Plan Amendment Approval, Zoning Bye-law Amendment Approval, Minor Variance Approval, Site Plan Approval, Architectural Design Approval (for buildings or land that lie within the set boundaries of Nassau as defined in the Act), and Subdivision Approval or Severance Approval. A Notice of Zoning Compliance is also required from the
Director and no construction can start without also having obtained a valid building permit under the Buildings Regulation Act (Ch. 200).

Conditions or Amendments – may be imposed by the Committee on approvals; for Land Use Plan Amendment, Zoning Bye-law Amendment, Minor Variance, Architectural Design, and Severance and on Preliminary Support of
Application for Site Plan or Subdivision. The Committee may also refuse approval giving written reasons, or defer consideration pending further information from the applicant or the Department. Persons who commence Development without final approvals are subject to being order to cease Development, to demolish the building, effect alterations or restore it to its original use and condition.

Failure to meet conditions and time lines may result in approvals lapsing or being revoked and any decision of the Committee is final unless appealed to the Subdivision and Development Appeal Board.

No Approval required – for the uses of land as listed in the Third Schedule to the Act or in instances where the Development of land includes the carrying out of works for the maintenance, improvement or alteration of the interior of the building, or the carrying out of works within the curtilage of a dwelling house for any purpose ancillary to the use of the dwelling house or when it is on the Governments behalf or other statutory undertaker for the maintenance of roads, sewers, water mains, pipes, cables and for the carrying out of agriculture (not including the breeding or keeping of livestock) or forestry.

6. Subdivisions:-

Subdivisions must have received Subdivision Approval before any lots can be sold and all Developers must sign in advance an acknowledgement of this condition. All lots within a Subdivision must conform to the standards of the Zoning Bye-law and all roads shall be of such width as required by the Land Use Plan.

A Subdivision Approval - shall be given after submission of a complete application and after all conditions of Preliminary Support of Application have been met. In addition to specific conditions, the owner shall have to provide a bond or bond insurance for a sum fixed by the Minister responsible for Public Works and shall enter into an agreement with the Minister responsible for Public Works for the proper constructions and provision of roads, electricity, water, telephone, and other utilities throughout the subdivision to the specifications approved by the Committee.

No building or structure within a Subdivision shall be allowed to commence on any tract within the subdivision until; the road providing access from such tract out to the Public Road has been formed and graded, all lots have been marked out on the ground and set with markers and all utilities and services are available for hook up to each lot in the Subdivision.

Title to Subdivision lots - conveyed after the commencement of the Act will be null and void without prior Subdivision Approval.

The Act however makes provision to protect the title interests of persons whose conveyance of a lot was made prior to the commencement of the Act.

7. Private Roads:-

No alterations or work may be done to an existing private road until written approval has been received from the Minister responsible for Public Works and the Minister for Public Works may enter agreements with any private individual or association to construct, maintain and operate private roads or any other private services or works within the road allowance.

8. Penalties:-

There are penalties under the Act on summary conviction ranging from five thousand dollar ($5,000.00) fines for obstructing a person acting in the execution of the Act, to a general ten thousand dollar ($10,000.00) fine for anyone who contravenes a provision of the Act where no other specific penalty exists and also a twenty thousand dollar ($20,000.00) fine or one year imprisonment for anyone who contravenes the provisions relating to Subdivision Developments.

Conviction – for an offence against the Act gives power to the Magistrate to make such order prescribed by the Act or in lieu of or addition to such order, make such order as the circumstances of the case may require. Failure to comply with such order will enable to Minister to enter the subject premises and carry out the terms of the order at the expense of the owner.

Expenses incurred by the Minister in carrying out the terms of a Magistrate’s order or expenses incurred by the Minister responsible for Public Works in completing the proper construction of any roads or the installation of required services and utilities in a Subdivision may form a first charge on all property of the owner wheresoever situate.

The information contained in this post is provided for the general information, but is not intended to constitute legal advice. Clients and the general public are encouraged to seek specific advice on matters of concern. This guide can in no way serve as a substitute in such cases.  If you require specific advice you should consult a Bahamian Real Estate Attorney.  You may contact a Bahamian Real Estate Attorney by clicking here.