Bahamas Information Desk: (202) 319-2660
Bahamas Real Estate Association: (809) 325-4942
Bahamas Consulate: (212) 421-6420 / (305) 373-6295
Bahamas Commercial Real Estate Office: (809) 322-1181
Bahamian Government Publications Office: (809) 322-2410
The transaction terms including listing duration and sales price are not formally recorded and may be obtained only through the consent of the buyer or seller. Broker’s fees are fixed nationally and may be determined once the sales price information has been attained. Although property titles must be formally registered with the Bahamian Registry of Records, a compensation form is not necessary for proper registration.
Bahamians are usually exempt from real property tax on unimproved property in New Providence and on improved or unimproved property in Grand Bahamas and the Family Islands. Hotels and light industries are exempt from property taxes for ten and fifteen years, respectively, from their inception and Freeport free-trade zone licensees are exempt until 2015.
Property that is needed for public use is subject to government seizure. A government appraiser will asses the seized property value and, based on this valuation, the government will reimburse the current residents. According to The Escheat Act, the Court must grant the Crown right to escheat for each individual estate. A property possessed owner without a will or any living relatives will be subject to government possession. Government auctions are one method used for redistributing the properties seized via escheat back to the private residential community. Government police power is used to deter property crimes like fraud, arson, damage, and burglary. In the case of Tenancy at Sufferance, a landlord can summons the police and have the tenant removed immediately. It is not required to obtain a court order before removing the tenant, yet most landlords will bring the tenant to court and sue for uncollected rent. Occasionally the tenant will summons the landlord to court if s/he feel they were unjustly evicted. However if it can be determined that the tenant personally received proper notice of rent due and possible eviction if payment is not made than the landlord will not be convicted. The fee simple estate is the only form of ownership in the Bahamas, although the owner holds feudally of the Crown, the supreme owner. The fee simple ownership applies to houses, buildings, and any division thereof (condominiums). An attorney will be hired by the buyer of property to determine the validity of the title and check for encumbrances to the title. Once the attorney’s professional opinion has been rendered, the sales transaction will take place and fee simple ownership will commence. Title insurance is neither required or used in the Bahamas as a means of ensuring good title currently. Life estates and defeasible fee estates do not exist. Fee tail estates are rarely created in the Bahamas, however one presently existing fee tail estate may become fee simple via The Estates Tail Barring Act.
Tenancy for a Period is the most common form of leasehold estate. The term of the lease including a list of tenants is required to enforce the contract. Building expenses and rental rates are subject to negotiation before the lease closing. Tenancy from Period to Period is allowed in the Bahamas but it is rarely practiced. Tenancy for a period is by far the most popular form of leasehold estate. Tenancy at Will is allowed in the Bahamas but is also rarely practiced. When a deed of trust is used as a mortgage instrument, foreclosure may occur without direct intervention and participation with the court.
Severalty: Individuals are entitled to the unique ownership of parcels of land. Two or more people are entitled to own real property as common tenants. All owners of the common property must participate in the creation and destruction of the tenancy in common to make the transaction valid. Joint tenancy, typically used among married tenants, is accepted for intestate tenants. A detailed description of the conveyance process is printed under the category conveyance after death.
Limited partnerships, trusts, and corporations may own real estate. Special tax incentives may be reaped by corporate real estate ownership. Under the Under Immovable Act of 1981, no foreign-owned Bahamian companies may own Bahamian real estate unless special permission is granted by the Investments Board.
Title & Contracts in Bahamas:
Title legislation is described in the Conveyancing and Law of Property Act. Although not required to own good title, a deed should be signed, sealed and delivered by the seller to the buyer in front of at least one witness who need be used to sign an affidavit of proof for the deed to be recorded in The Registry of Records. Deeds recorded must bear a stamp to signify the payment of property duty which is equal to 3% of property value, based on ad valorem price, up to $20,000 property value, 4% up to $50,000, 6% up to $100,000 and 7% of property valued over $100,000. According to the Bahamian Inheritance Act, all property will be traced to the last purchaser and estate will be granted to the nearest descendant, patriarchy and primogeniture apply by the ranking of the descendants. The nearest male paternal will receive the estate if no descendants exist. Dower exists in Bahamian legislature but may be denied by the widow if she chooses. The "uses to bar dower" conveyance will deny the dower from attaching to the land. Providing the male fee simple owner dies intestate (without a will), according to the Imperial Act, The Statute of Distributions, 22 & 23 Charles 11, c. 10 via c. 2 in 1799, the widow will receive one-third of his personal estate and the children will receive the other two-thirds. If the married couple did not conceive children, than the widow will receive a moiety (half) of his personal estate while the rest will be dispersed among the next of kin. The husband will receive the entire personal estate if he should lose his spouse who died intestate.
The Widows of Intestates Act grants the real and personal estate if the same is greater than B$150(sic) and less than B$200. If the amount exceeds B$200, than the widow will receive B$200 and charge for the equivalent value on real and personal estates with interest applied from the date of the death of the intestate at 4% per year until payment is rendered. The Married Women’s Property Act states that women have the same rights to ownership of real and personal property just as men do, and husbands and wives may convey whatever amount of real and personal property they wish to each other. Adverse possession for 60 years is the minimum amount of time needed to acquire a good title against the Crown, and, according to the Real Property Limitation Act of 1874, 20 years is the minimum amount of time needed to acquire a good title against an individual.
The Registry of Records is the name for the Bahamian public records office. Priority real estate titles are kept here for easy attorney access. However, a title need not be registered to be valid. Abstracts of past title quality should be included with the title in the Registry of Records. A break in the chain of title owners or missing abstracts will reduce the marketability of subject property. Title insurance is not required or used in the Bahamas. Quality of titles are assessed by attorneys and, from this, the transference of title will occur. The historic system for the registration of ships is not employed in the Bahamas, rather a title should only be filed in the Registry of Records. The attorney hired to assess the quality of a title will determine whether encumbrances exist which ultimately reduce the attractiveness of the property and hinder the marketability of the title.
Form of agreement, conditions for signature, and other contract provisions are covered in The Hire-Purchase Act of 1974. The conditions for signature establish the criteria for performance according to a specified parameter. Lack of performance will cause a breach of contract and in most cases the dispute will be resolved in court.
Individuals under the age of 18 cannot legally sign a real estate contract just as mentally challenged individuals cannot, as a contract will be void if either of these criteria can be established. Many of the real estate firms hire local listing companies and also research their own listings in-house. The Registry of Records publishes a pamphlet detailing the information needed for proper registration. Attorneys will typically be used to customize contracts and forms to the needs of the individual firms. Attorneys are hired privately by real estate firms to create the property contracts subject to brokers merely filling in the name, dates, monies, and addresses.
Property Taxes:
Ad Valorem is described as low, and is the only form of a direct taxation. Real property tax is payable on occupied buildings at the rate of 2s. 6d. in the pound of assessed rental value. Only a stamp duty totaling 1% of the property value must be paid at the transference of title. For owner-occupied housing, tax rates are .0075 of market value for first Bahamian $50,000 and .01 of market value for balance over B$50,000. All other property: .005 of market value on first B$50,000, .01 for properties valuing B$50,000 -B$100,000, and .015 of market value for balance over B$100,000.
Closings are handled by the real estate broker. 10% of the property value is held in escrow during the closing process until finalization occurs. Individuals under the age of 18 cannot legally sign a real estate contract just as mentally challenged individuals cannot, as a contract will be void if either of these criteria can be established. Finalization usually occurs within 60 days, whereas 45 days is typical for closure. A buyer has two weeks to attain financing after a contract is signed. If financing is unavailable to the buyer, the funds held in escrow will be returned and the contract will be nullified.
Land Use & Control:
The local government will typically determine the use of its lands, in accordance with federal zoning codes. Public council meetings are held regularly to discuss and decide future zoning plans. All of the subdivision regulations are determined, dictated, and enforced by the Bahamian Ministry of Housing. All construction is subject to government official safety inspection, dictated by the Ministry of Housing, in order to attain a right to occupancy permit.
The Rate of Interests Act protects mortgagors from outrageous interest rates. An annual interest rate of 20% is the maximum amount permitted for loans in excess of B$100, 30% being the maximum interest rate for loans totaling less than B$100. This Act will not apply to loans in foreign currency or by institutions licensed under The Banks and Trust
Companies Regulations Act, 1965. Registration of a mortgage provides priority of title.
Typical mortgage terms are currently 80% loan-to-value-ratio, 101/2% interest, and 15-25 years. One percent of the loan amount must be granted to the state for the stamp duty.
The bank assumes first priority at the creation of a mortgage lien. The law allows for statutory mortgage foreclosure.
Short-term and medium-term loans are available through banking institutions operating in the local market, long-term capital loans are available through insurance companies and pension funds, and venture capital and development financing is available through The Bahamas Development Bank. Banks, insurance companies, and savings & loans are all issuers of mortgages to residential and commercial buyers. There are about 400 banks in the Bahamas. The major financial lenders are The Central Bank of the Bahamas and The Bahamas Development Bank.
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