As we made final preparations to launch our commentary on the popular Planning and Subdivision Bill, 2009, our plans were postponed by the announcement that the Bahamas Government had postpone the passing of the Bill by legislators who had been barraged by the public outcry of the country’s professional elite. Only recently it was decided that the legislature would re introduce the Bill to parliament this year, revealing the amended version for review by the public by a reasonable date.
Without a doubt you should expect to see a substantially amended version of the original Bill to be re-introduced. Should you feel uninformed about this important debate we are happy to provide an outline of the origins and present day concerns within the development of this important legislative instrument, which we hope will provide clarity and an opportunity to ‘have a say’ on the upcoming amended version:
Creating the Planning and Subdivision Bill
Land transactions in The Bahamas have always held their fair share of disputes and complaints concerning the out of date methods of transferring ownership from the hands of one party to another. The plea for the establishment of a land registration system seems to have fallen on deaf ears while the current system shows its numerous legal deficiencies almost on a daily basis. One of the more prominent deficiencies within the real estate industry Bahamas stems from the planning and approval process of subdivisions, currently governed by the Private Roads and Subdivisions Act (Ch.256) and the Private Roads and Subdivisions Act (out islands) (ch.257) both which regulate the approval of the formation and sale of subdivision lots throughout the islands of the Bahamas.

Unfortunately both Acts have suffered from the lack of enforcement for decades as the disregard contents of its legislative authority had affected the legitimacy of land transactions, and have made a significant contribution to the long standing congestion of the Bahamian commercial courts. Evidence of such circumstances are found in the matter of Oceania Heights Limited and Willard Clarke Enterprises Limited et. al (Cl 548 of 2000) which involved the sale of property prior to the provision of ‘final’ subdivision approval by the Minister, the agreement for sale involved in the conveyance of the subject property to the Defendants were held to be ‘void ab initio as being illegal’; the presiding judge emphasizing the fact that:
“…The law must remain such that the obvious wishes of the parliament are to be upheld…To enable the Defendants to succeed in what really was a scheme (once the attorney got involved) would be to defeat the very legislation itself and to make a mockery of the well intentioned acts of the parliament…”
Section 5 of the Private Roads and Subdivision (Out Islands) Act (Ch.257) was made central to the judicial reasoning of the decision held in the Oceania Heights Limited case, which bans the sale of the property within unapproved subdivisions or subdivisions provided with ‘conditional’ approval by the Minister. Nevertheless, despite the stipulations of both Subdivision Acts, a number of cases involving the sale of property within unapproved subdivisions emerged as unscrupulous developers refused to adhere to the legislation. This, along with other planning and environmental problems associated with the land development has prompted the Bahamas Government to develop the Planning and Subdivisions Bill, 2009.
Objectives of the Planning and Subdivision Bill
The main objectives and purposes of the proposed Planning and Subdivision Bill had intended to supply badly needed upgrades to existing out of date legislation which regulated land development along with eradicating a number of concerns involving the acquisition, physical development, and sale of property throughout The Bahamas. In his contribution to the Parliamentary debate on the introduction of the Bill, Minister of the Environment, the Honorable Earl D. Deveaux outlined a number of problematic concerns surrounding the country’s land development policies which over time had become a target of exploitation and deliberate ignorance. Details surrounding the problems with land acquisition, development, and sale can be found on page 7 of the Minister’s contribution to the Parliamentary debate on the Planning and Subdivision Bill (click here), as outlined below:
- The sale of lots which lacked subdivision approval;
- The failure of fulfilling obligations of property developers upon receiving approval to sell lots in order to pay for property infrastructure;
- The provision of building permits for unapproved subdivisions;
- The provision of building permits for subdivisions developed without Installed Infrastructure;
- The lack of utility services in subdivisions after development
- Inadequate subdivision fees;
- Uncompleted subdivisions and the inability to complete the development of family island subdivisions;
In reviewing the objectives of the Planning and Subdivision Bill, one can establish the intention of the Bill to involve the proper administration of subdivision development by the Town Planning Committee and Department of Physical Planning along with the protection of its purchasers and present/future residents with Bahamian subdivisions. The Bill also requires land developers to conduct Environmental Impact Assessments (EIA) prior to obtaining subdivision approval along with higher penalty fees for developers who are in breach of the new legislation.
Identifying the Problems
Like the origins of most recent legislative instruments, the Planning and Subdivision Bill is no exception to criticism and amendment. Rather than being interpreted as a failed attempt to bring structure to a troubled land development initiative it should be considered a significant attempt to modernize the administration of land development within The Bahamas and a rare attempt by the Bahamian Government to involve the local public in the development of the Bill’s regulations. In reviewing the first version of the Planning and Subdivision Bill you may find the chief problems within the first draft of the Bill to include the following:
Larger risk borne by the Developer
The most popular opinion held by critics of the Planning and Subdivision Bill is the notion that the Bill itself holds the land developer at a disadvantage. Like a prize fighter entering a boxing match with his strong arm tied behind his back, the ‘bureaucratic red tape’ comprising of added application approval processes, town meetings, and other procedural regulations impede on the financial strategies used by land developers for the proper and efficient physical development required by the Town Planning Committee. In the course of obtaining financial support from local banking and financial institutions, lengthy delays in the provision of subdivision approval can lead to unprofitable land development projects and an almost impossible fulfillment of debt.
The sale of subdivision lots within a land development have always been the appropriate method used both in financing debt and for the placement of utilities and roads within the subdivision. In its present state, the Planning and Subdivision Bill will require land developers to install utilities and services for each lot along with constructing a main road prior to the construction of building structure on the subdivision lot. And with the prohibition of any compensation for financial loss resulting from the revocation of subdivision approval, passage of the Bill provides a significant risk held by land developers.
In addition, clause 56 of the Planning and Subdivision Bill, which prohibits the sale of lots within a subdivision without receiving approval from the Town Planning Committee, may cause substantial difficulties for most land developer to see any financial benefit stemming from subdivision development.
Risk held by Financial Institutions
Financiers of land development projects may also find themselves facing significant financial risk as the Planning and Subdivision Bill allows for the imposition of charges on a subdivision development by the Town Planning Committee which, subjected to subdivision approval, may potentially surpass other bonds a land developer may have lodged in order to guarantee the installation of infrastructure within the subdivision.
This imposition may affect lenders seeking priority in making claim for assets in the event that a land developer is unable satisfy its debt as this priority will likely be held by the Bahamas Government. The ability of the Town Planning Committee to impose this charge would not only affect the country’s mortgage industry, but also the marketability of the property as purchasers will refrain from buying land to which a charge has been lodged.
Further Risk Held by the Purchaser
Land developers are not the only ones seeing an increased risk in subdivision development. As it stands, clause 70 of the Planning and Subdivision Bill may be interpreted as having the effect of dispossessing a lot owner of legal ownership of a lot of land within a subdivision where subdivision approval has been revoked.
Although there exists legal recourse in obtaining compensation for Purchasers who have been wrongly guided in purchasing property within unapproved subdivisions (i.e. in taking legal action against their legal representative and/ or Vendor) the Planning and Subdivision Bill fails to properly establish a practical remedy for those involved in “hoodwinking” the Purchaser into purchasing lots within unapproved subdivisions, nor does it provide for a Purchaser to confirm the provision of approval of a subdivision by means of an appropriate and reliable method.
Lack of Zoning By-laws and Land Use Development Policies
In normal situations legislation is drafted to supplement existing regulations in order to bring into effect its legal function, not the other way around. As suggested by most critics, the very “meat” of the Bill was found to be lacking, due to the fact that the Bill required all applications for subdivision approval to be compliant with National Land Use Development Policies and Zoning By – laws. Therefore, in order for the Bill to fulfill its purpose, the Land Use Plan and other National Land Use Development Policies must be in place.
Although it seems critical that subdivision development should be used to supplement land development policies and regulations, the details of the Subdivision Bill should not focus on land use policies that have yet to be implemented within the laws of The Bahamas.
Imposition of Increased Expense in the Sale of Land
The position of some critics to the Planning and Subdivision Bill may cause an increase of at least 30% for the cost of land within The Bahamas if passed. Although we are unable to confirm the accuracy of this increase, it is certain that lots within approved subdivisions will increase due to the realized expense suffered by the land developer in the course of subdivision development. This may be due to the overall increased level of capital required by the land developer and more stringent conditions imposed by financial institutions wishing take on increased risk in its involvement in a land development project. Such circumstances may also cause an increase in overall construction costs.
Further constituting increased land prices is the added process and procedures involved in the subdivision approval process which will cause further delay in land sales. Such circumstances may cause a significant increase in the price of subdivision lots.