Only recently the Ministry of Public Works & Transport released this public notice reminding all builders of the need for the Ministry to inspect and approve of construction projects prior to receive an Occupancy Certificate. According to the notice, the provision of an engineer’s report is not considered a substitute or replacement of the mandatory inspections, only a mere aide of assurance and quality control.

For those who are not familiar with Bahamian construction regulations, contractors who have been hired to construct a building (or the owners of the building) are first required to apply for a permit from the Ministry of Public Works for its construction, and upon its completion the builder/ property owner is required to apply for an Occupier’s Certificate. In order to be approved for an Occupier’s Certificate however, the Buildings Control Officer is required to carry out a thorough inspection of the premises in order to ensure that the construction has met appropriate standards in accordance with the Bahamas Building Code.

Under the general rules of the Buildings Regulations Act, builders are required to give 48 hours notice in writing to the Buildings Control Officer before the works are at a stage where mandatory inspection is required to be carried out in accordance with the Building Code. Failing to do so could result in the Builder being required to cut into, lay open or pull down so much of the building, works or fittings as in the opinion of the Buildings Control Officer that will prevent a proper inspection from being carried out to ascertain whether or not the country’s Building Code and all approved plans have been complied with.

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MINISTRY OF PUBLIC WORKS & TRANSPORT BUILDING REGULATIONS ACT, 1971

NOTICE

INSPECTIONS OF BUILDING OPERATIONS

The general public is reminded that Occupancy Certificates shall only be issued where buildings have received the mandatory inspection approvals during the construction in accordance with Section 11 (1) of the Buildings Regulations Act, Chapter 200. All builders must show proof of having requested and received structural, plumbing, electrical and mechanical approvals where applicable for each building constructed. Failure to secure the required inspection approvals will require the builder to cut into or lay open portion or portions of the building to ascertain compliance with Section 10 (2) of the Building Regulations Act.

The general public is further advised that an engineer’s report submitted in lieu of the required stage inspections will not be accepted as having met the requirements for an Occupancy Certificate and therefore shall not be construed as a substitute or replacement for the mandatory inspections of Section 10 (1) of the Buildings Regulations Act.

Engineer’s reports shall only be considered as an aide of assurance and quality control of a building project to the owner, the architect and the Building Control Division.

Craig G. Delancy

Building Control Officer

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Inhabitants of Grand Bahama were caught off guard yesterday (29/03/2010) when a lethal tornado ransacked portions of the island. Three people have been reported dead and several others injured who were employed at the Freeport Container Port. Already plagued by a sluggish economy and two deadly hurricanes further infrastructural damages have occurred, this time causing damages to at least 6 container cranes and a number of buildings. Without a doubt the infrastructural injuries to the container port will operate at a reduced capacity which may also result in reduced wages for its workers. And as the political fingers find their way to find fault, lawyers secretly dabble with words such as ‘foresight’, ‘causation’, ‘remoteness’ and other legal gobbledygook.

Sadly, fortune seems to have walked away from the country’s second major city, with hotel closures, high unemployment levels, and manufacturing companies opening and closing due to the island’s elevated energy costs. Low lying areas of the island have been prone to constant storm surges and flooding, and every year the island’s inhabitants brace themselves for the hurricane season more so than those living in the central and southern islands. Rest assure however, when they figure out how to kick start the island’s industrial engines you will be sure to see a more prosperous report roaring out of the future Caribbean tiger.

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As if the reputation of the Bahamian lawyer has not suffered enough, according to this report by the Nassau Guardian, the former President of the Bahamas Chamber of Commerce suggests that local banks should establish facilities for funds intended to be held in escrow, the suggestion made on the ‘rise in court cases involving money held in escrow and the lawyers tasked to oversee it’. This crisis is seen primarily in commercial transactions in which monies paid expenses are held in escrow by attorneys representing both parties, who are held responsible for making the appropriate disbursements to the vendor and supplemental expenses attached to the property (i.e. stamp duty fees, real property tax, utilities).

Traditionally, local attorneys have held monies in escrow in order to ensure that the appropriate disbursements are made prior to payment, and in order to ensure that their legal fees are paid for the all necessary services provided for the transaction. In dealing with any legal action or commercial transaction, clients should either receive notice of the intended disbursement from their attorney, or obtain a summary of all expenses to be paid (i.e. commercial transactions).The use of escrow funds other reasons apart from the benefit of the client however, is a serious breach of fiduciary duty held by the attorney and will normally lead to disciplinary actions exercised by the Disciplinary Committee of the Bahamas Bar Association.

Ultimate control of an escrow account however, may exist in circumstances whereby the attorney and client become joint signatories to a designated account, the arrangements of which can be made by the local bank or financial institution. This ensures the complete communication and review of the disbursements made between an attorney and a local client, but may prove more tedious for foreign clients, and unacceptable by attorneys from larger law firms. Foreign clients who hold concern for funds held in escrow by a local attorney for commercial transactions should speak to their attorney to determine whether separate payment of the consideration for the property and payment for expenses (i.e. government fees, legal fees, etc.) could be paid separately and directly to the respective parties. The attorney may agree to this, save for the direct payment of the deposit, which would be required to be held in escrow by the attorney in order to ensure that legal fees are paid. Bear in mind that there are no set rules concerning escrow arrangements between the client and their legal representative.

The suggestion of local banks and financial institutions providing an escrow facility may prove to be beneficial, but issues of confidentiality, ‘institutional red tape,’ and increased risk of third party liability automatically become immediate hurdles for this kind of service. Perhaps the call for greater swift disciplinary penalties for dishonesty and fiduciary negligence are a better suggestion for this concern.

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Last Thursday the Tribune reported the brazen performance of a shot gun wielding driver who trapped two men in their vehicle after suspecting one of them of being the culprit of a previous hit and run incident (you can view the report here). Surely the event reminds you of a heart pounding scene from your favorite action packed movie, but in actuality a fine example of an act of arrest made by an ordinary citizen, commonly known as “citizen’s arrest”, the power of which is granted by Section 103 of the Penal Code (Ch.84).

According to this section, any person may arrest and detain another person who has committed a felony, and may use any force which is necessary for his arrest, detention or recapture (even kill him) if he cannot by any means otherwise be arrested, detained or re-taken. In using necessary force, the accused must have notice or believe that he is accused of a felony avoids arrest by resistance, flight, or escape from custody. For this reason, it seems as if the heroic citizen who bore witness to the hit and run incident may have acted within the limits of the law.

Perhaps what really brings out excellence in maintaining law and order in The Bahamas is through those that are just fed up with the criminal insurgency that is slowly crippling our island economy. Just maybe, the part of the answer to this stubborn issue of crime in this country lies through more awareness of Penal Code S103, establishing training programs that will serve to properly instruct the average citizen on how to safely and properly arrest an offender without legal ramification. This along with the provision of CCTV technology in all neighborhood subdivisions just may curb the criminal appetite, but certainly action is far better than none at all.

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As the recession takes a toll on the Bahamian economy, the Bahamas Government is extending a helping hand to homeowners by extending the real property tax surcharge waiver up to the 30^th of June, 2010.

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GOVERNMENT NOTICE

MINISTRY OF FINANCE

PUBLIC NOTICE

Real Property Tax – Surcharge Waiver Extended

The Ministry of Finance advises the general public that effective immediately the Waiver of Surcharge against all properties is extended to 30^th June, 2010 as provided herein:

• 100 per cent waiver for owner occupied properties with a market value of up to Two hundred and fifty thousand dollars ($250,000.00).
• 100 per cent waiver for owner occupied properties that exceed Two hundred and Fifty Thousand dollars ($250,000.00).
• 50 per cent waiver for other properties.

Section 21B Revival of Surcharge

If after December 31^st, 2009 any other property tax remains outstanding in respect of;

(a)   Owner – Occupied Property with a market value of up to two hundred and fifty thousand dollars ($250,000.00)

(b)  Owner – Occupied property which exceeds two hundred and fifty thousand dollars ($250,000.00)

(c)   Other Property

The owner of such property shall be liable to pay a new surcharge of five percent (5%) of such tax per annum, reduced from TEN PERCENT of such tax per annum.

For additional information regarding this matter, kindly contact the Real Property Tax Office, Frederick House, Frederick Street, at telephone (242) 325-1171 or the Administrator’s office in any Family Island.

This month marks our first year operating the LEX JUSTIS blog. Thank you for taking the time for visiting us, especially to our returning visitors who numbers grow on a daily basis. As we bear witness to the ever-changing temperament of the practice of law in this unique culture of The Bahamas, we will continue to push forward in promoting innovation and increased interaction with our clients worldwide.

We would like to introduce our new category entitled “LEGAL BISCUITS” containing current, informal summaries of the legal comings and goings taking place in The Bahamas. Expect to see our normal legal commentaries every two weeks, while biscuit entries should take place on a weekly basis. Bookmark us or join us in Face book or Twitter today!

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Time shares have always enjoyed a profitable niche within The Bahamas. Widely known for hosting high quality accommodations and service within its vacationing facilities, the time share business has increasingly crystallized its presence all throughout the burgeoning islands of the archipelago. The flexibility and cost effectiveness offered by time share resorts have played beneficial role in the success of its business model since its inception in the 1960s and in The Bahamas, more than 28 time-sharing projects with more than 900 time-share units and more than 48,000 unit weeks operating in the islands since establishment of the Vacationing Plan and Time-Sharing Act came into force in the year 1999. It is estimated that timeshare resorts inject about $87 million annually into the Bahamian economy, and employs in or around 1,000 persons.

PRE-SALE REQUIREMENTS

Escrow fund

Prior to entering into any contract, the developing owner must both establish and maintain an escrow fund with a financial institution (known as an ‘Escrow Agent’) doing business in The Bahamas which must be approved by the Minister of Finance by way of written notice published in the Gazette. Proceeds of all on-site sales of timeshare interest must be paid into this account upon receipt of payment. In lieu of the establishment of an escrow fund, the Bahamas Investment Authority may accept an alternative guarantee from the developing owner, which may include a surety bond, letter of credit or even a company assurance issued by the developing owner or its parent company, provided that the BIA is satisfied that the developing owner or its parent company is financially sound.

Disbursements from the Escrow Fund

In accordance with the Vacation & Time Share Act, upon submission of a supporting affidavit by the timeshare developer, Escrow Agents are permitted to make disbursements from the escrow fund in the following circumstances:

• To the purchaser: on the cancellation of his contract within the statutory seven (7) day period, the total amount of all payments made by the purchaser less any contractual reimbursements;
• To the developing owner: on the cancellation of a purchaser’s contract within the seven (7) day cancellation period, the proportion of any contractual reimbursements the purchaser has actually received prior to the effective date of cancellation;
• To the marketing agent (or a developing owner acting as the marketing agent): pursuant to both  a written agreement between the developing owner and the marketing agent and upon the expiration of the seven (7) day cancellation period of a purchaser’s contract, no more than thirty-five per cent (35%) of the gross amount realized from the sale of the time-sharing interest of that purchaser for the purpose of paying the costs of marketing the time-sharing project;
• To the Sinking Fund: upon the expiration of the cancellation period of a purchaser’s contract, no less than five per cent (5%) of the gross amount realized from the sale of the time-sharing interest of that purchaser to be paid into the time share’s sinking fund.
• To the Trust Fund: the remaining balance of the proceeds must be deposited into a trust fund.

Sinking Fund

Sinking Funds are required to be established for the purpose of making any repairs, alterations or replacements necessary to the premises of the time share project as a result of defects in materials or the construction of the premises. Legislation require developing owners to establish and maintain a sinking fund with an approved financial institution, into which 5% of the on-site and off-site sales proceeds are to be deposited until the sinking fund contains no less than 5% of the total construction costs incurred on the time share development. Payments made to the sinking fund may be repaid to the developing owner any time following the expiration of three years after the completion of the construction of the time share project.

In lieu of the sinking fund, the BIA may accept from the developing owner an alternative assurance, including a surety bond, letter of credit or even a company guarantee issued by the developing owner or its parent company. However the sinking fund may not be used as collateral security in support of any loan or any other financial obligation of the developing owner.

Trust Fund

Time share legislation also requires the developing owner to establish a trust fund with an approved financial institution from the remaining funds derived from the amount required to be deposited within the time share’s sinking fund. Similar to the conditions of the sinking fund, a developing owner shall not be entitled to use the funds held in the sinking fund or the trust fund as collateral security in support of any loan or other financial obligation incurred by him.

Trustees of the trust fund can make disbursements to the developing owner on proof of the issuance of a certificate of occupancy with respect to the completion of the time share project or to a purchaser of a time share under a judgment obtained by him in a court of The Bahamas for breach of contract in connection with his purchase of a time-sharing interest. Disbursements can also be made upon application to the court by an interested party for the sake of completing a time share project in circumstances where a developing owner fails to complete the time share project in accordance with the terms and conditions of his license or in circumstances in which the license of a developing owner is revoked by the court.

In lieu of the trust fund, the Bahamas Investment Authority may accept from the developing owner an alternative assurance, including a surety bond, letter of credit or even a company guarantee issued by the developing owner or its parent company (provided that the authority is satisfied that the developing owner or its parent company has a net worth in excess of US$25 million and is otherwise financially sound).

POST-SALE REQUIREMENTS AND SUPPLEMENTAL APPLICATIONS

Insurance

Developing owners must provide and maintain for the benefit of all purchasers and their guests public liability insurance in respect of the accommodations and facilities to be used in an amount of at least US$1 million, and all other physical assets of the time share project of an insurable nature insured against loss or damage in an amount not less than the replacement cost of such property. The developing owner may delegate or assign the responsibility of acquiring the necessary insurance coverage to the managing agent, however the developing owner will remain jointly and severally responsible for such compliance until either: the timeshare project is completely sold out, the developing owner no longer retains any estate, right, title or interest in the timeshare project, or the developing owner has divested itself of the developing owner’s license.

Occupancy Tax

Each occupant of any time share property (who is not a purchaser or guest of a purchaser) must pay an occupancy tax for each period in which the occupant is provided with sleeping accommodation at such time-share property, for the amount of six percent (6%) of the total room rate.

Exemptions Under the Vacation Plan and Time Share Act

Under Bahamian legislation, developing owners may seek exemption from custom duties for building material and other amenities for time share projects comprising of at least 50 units in New Providence and 25 units in the Family Islands. Other requirements can be found here.

Exchange control approvals

The Bahamas has an exchange control regime in place which provides for the regulation of the holding of Bahamian and non-Bahamian dollar currency or securities denominated in Bahamian or non-Bahamian currency.

Under the Exchange Control Regulations Act 1956, a Bahamian citizen, a holder of a certificate of permanent residence and a holder of a work permit are deemed residents for exchange control purposes. A person or entity deemed a non-resident for exchange control purposes includes any person that falls outside the term ‘resident’, or a person who would be deemed a resident but is designated a non-resident by the Exchange Control Department of the Central Bank of The Bahamas. When a person is deemed a non-resident for exchange control purposes that person may not deal in Bahamian currency, securities denominated in Bahamian dollars or shares in a company deemed resident for exchange control purpose without the prior written approval of the Exchange Control Department.

In case of a time share development an application by the developing owner, marketing agent and managing agent should be made to the Exchange Control Department of the Central Bank of The Bahamas for approval of:

• Non-resident persons/ entities for exchange control purposes to own shares in an international business company that will own the property or operate the timeshare project or a domestic company;
• the repatriation of dividends to non-resident owners; and
• the company’s operation of foreign currency bank accounts and an external Bahamian dollar account for the payment of local suppliers and service providers.

With respect to foreign purchasers of time share units or any other real estate investments, application should be made for ‘approved investment status’ to the Exchange Control Department of the Central Bank of The Bahamas, which can be achieved by submission of a letter of application to the Central Bank. This designation will facilitate the conversion of Bahamian currency to a foreign currency of choice on the sale of a purchaser’s time share interest to a person who may only deal in Bahamian currency.

Business License

Developing owners, marketing and managing agent must obtain a business license from the Business License Department of the Ministry of Finance in order to carry on business in The Bahamas. The grant of this license to a non-Bahamian is entirely within the discretion of the Minister of Finance and may be subject to such terms and conditions as he sees fit. All Licensees are subject to an annual business license fee, which is computed on a scale. Thereafter, the annual business license fee is calculated in accordance with Section 4(1) of the Business License Act.

Registration under the Real Estate (Brokers and Salesmen) Act

In accordance with the Real Estate (Brokers and Salesmen) Act 1995, any person who engages in the practice of real estate business (which includes the sale of deed-based time share interests) must be licensed under the act. This requirement represents an additional step that must be taken before the developing owner is in a position to proceed with the sale of the time share development.

Immigration work permits

Pursuant to the provisions of the Immigration Act, it is unlawful for a foreign person to engage in any gainful employment in The Bahamas unless, among other things, he is in possession of a valid work permit. This restriction applies even if the person is in The Bahamas for a very limited period of time in connection with a specific job. Details pertaining to obtaining a work permit in the Bahamas can be found in our previous post found here.

Registration of trademarks

The developing owner, marketing agent and managing agent may wish to consider registering any trademarks or trade names in the Registry of Industrial Properties. Application for the registration of a trademark is made to the Registrar General in a statutory form provided by that office. For more information you may view our previous post.

Mario L. McCartney [esq.], B.A [Hons], LLB [Hons.] practices as Founder and Principal of the Chambers of LEX JUSTIS, a boutique law practice in Nassau, New Providence, The Bahamas. While presently engaged in general legal practice, Mr. McCartney’s specialty lies in debt recovery and offshore financial and corporate services, and is currently registered as a Compliance and Anti-Money Laundering Reporting Officer (CMLRO) for his Chambers. Mr. McCartney is also the present editor and main contributor of LEX JUSTIS blog site and welcomes all opinions and comments to his articles.

For further information on all legal services provided by Mr. McCartney please visit the LEX JUSTIS website @ www.lexjustis.com or email him at mmccartney@lexjustis.com, mario.l.mccartney@gmail.com.

The private ownership of firearms has always maintained its place within The Bahamian culture as both a privilege and as a protectorate. For the recreational hunters, a trip to the pine forest of the outer islands in search of wild boar, raccoons, and local gaming birds will require the use of a hunting rifle, while the pump action shotgun is a common favorite amongst local business owners in the major island cities of New Providence, Abaco, and Grand Bahama where burglary, assault, and other trespasses to property and person are a rising concern, and committed by individuals who are in illegal possession of an revolver, assault rifle or other firearms prohibited by The Firearms Act.

Applying for Gun License

Regardless of its use, Bahamian law does make provision for the ownership of certain types of firearms within the Firearms Act, which can be obtained by the grant of a gun license authorized by the Commissioner of Police. Firearm license application forms can be found here , the submission of which should include the following:

• Two color passport size photographs;
• Bill of sale for both firearm and gun safe purchased by the applicant;
• Applicant’s driver’s license, Passport, and National Insurance Card;
• Non – Bahamian applicants are required to produce proof of legal status in The Bahamas (i.e. certificate of permanent residency, work permit, etc.);
• In circumstances where proof of firearm purchase cannot be obtained, a letter must be written stating where the firearm was purchased and how long the firearm was in your possession;
• Application fee of $50.00 for shotguns and $100.00 for rifles.

Although the application provides for the submission of the bill of sale for the firearm and safe, do not expect to simply purchase your weapon from the local gun shop and cart your weapon home if you are not in possession of a Gun License. If it is your first application, the firearm dealer will ask for payment of a deposit on both the firearm and a safe in order to provide a bill of sale for your gun license application. Full payment for the firearm is expected once your application has been approved, upon which you should be able to possess your new firearm.

Discretionary Thresholds

As stipulated by the Firearms Act, the Commissioner may grant a gun license to an applicant if he is satisfied on good and sufficient evidence that the applicant is a ‘fit and proper’ person. Although the Firearms Act remains silent on the factors which constitute “good and sufficient evidence,” this legislation provides that individuals of intemperate habits, of unsound mind, or of any other unfitted reasons to be entrusted with a gun will not be granted a license by the Commissioner.

Notwithstanding the discretionary power held by the Commissioner, one may expect for persons who are mentally incapacitated or applicants holding previous criminal convictions involving violent acts will not be granted a firearm license. Reports lodged by members of the community (i.e. domestic violence, assault and battery against another) or current criminal investigations involving the applicant being involved in a violent act may also hinder the individual’s application, which may result in further provision of evidence to support the applicant’s character, or the implementation of conditions on the Gun License, Special License, or Firearm Certificate at the discretion of the Commissioner. Therefore it is advised that applicants knowingly under any form of criminal investigation, subjected to a lodged criminal complaint to the police, or previously diagnosed with a mental illness, should submit character references when submitting their application.

If the Commissioner refuses to grant or renew the provision of a Gun License, Special License or Firearm Certificate and the applicant may appeal the decision of the Commissioner to the Licensing Authority who may either confirm, vary, or revoke the decision made. The decision of the Licensing Authority is final, and in accordance with the Firearms Act, may not be called in question in any court.

A Note on Revolvers, other High-Capacity Firearms, and Ammunition

Generally, only members of the Royal Bahamas Police Force and the Royal Bahamas Defense Force are allowed to carry revolvers and other types of firearms (i.e. automatic rifles, assault rifles, canons, etc.) and ammunition associated with this form of weaponry. However the Licensing Authority holds the authority to permit the use of revolvers to Bahamian residents through the provision of a Special License (for revolvers) or a Firearm Certificate (for high powered weaponry). The Licensing Authority may also vest its powers to the Commissioner of Police to grant, reject, or revoke the provision of Special Licenses or Firearm Certificates. If you plan to submit an application for a Special License or Firearm Certificate, expect to present the same documentation as required for a Gun License application.

Similar to a Gun License the Commissioner does have the authority to implement conditions on the Special License or Firearm Certificate at his discretion, nevertheless it is casually suggested that the privilege of holding a Special License or Firearm Certificate are reserved for members of the professional and political elite.  As the roaring debate on whether business and home owners should be eligible to own a hand gun continues into the unknown, it seems as if Bahamian legislation has struck a balance allowing residents to own some form of firearm for recreational or as a means of protecting themselves.

Time shares have always enjoyed a profitable niche within The Bahamas. Widely known for hosting high quality accommodations and service within its vacationing facilities, the time share business has increasingly crystallized its presence all throughout the burgeoning islands of the archipelago. The flexibility and cost effectiveness offered by time share resorts have played beneficial role in the success of its business model since its inception in the 1960s and in The Bahamas, more than 28 time-sharing projects with more than 900 time-share units and more than 48,000 unit weeks operating in the islands since establishment of the Vacationing Plan and Time-Sharing Act came into force in the year 1999. It is estimated that timeshare resorts inject about $87 million annually into the Bahamian economy, and employs in or around 1,000 persons.

Function and Powers of Time Share Regulators

Vacation and time share developments are regulated by the Bahamas Investment Authority (BIA) in which the Prime Minister sits as its Chairman. The BIA serves as both regulator and as a central advisory for persons of international community willing to invest in the designated economic areas reserved for foreign investment. In accordance with the Vacationing and Time Share Act, all persons or corporate entities engaged in constructing or developing, marketing, selling or managing a time share project in The Bahamas are required to obtain a license from the BIA. Along with the power to grant licenses for development projects, the Vacation and Time Share Act provides the BIA with the authority to conduct a number of additional functions which include:

• Implementing conditions for the grant of a license;
• Approving the transfer of  a license;
• Revoking or suspending the grant of a license;
• Determining the financial abilities of all applicants;
• Authorizing the inspection of time share facilities;
• Providing an exemption of customs duties for the construction of time share facilities;
• Impose and enforce penalties;
• Suspend licenses granted to managing agents;
• Appointing an interim managing agent for time share facilities

Pre-sale Requirements

Conditions for Grant of Approval of Time Share License

As previously mentioned those individuals involved in the construction, marketing, selling, or managing a time share development in The Bahamas are required to be licensed as a developing owner, marketing or managing agent. Licenses granted by the BIA remain in effect throughout the life of the time share project and at the discretion by the BIA. It is important to note that the time share developers should refrain from taking any action which could in any way be interpreted as advertising, marketing or selling time share interests in The Bahamas without authority approval; otherwise, it may face severe penalties under the act, including jail for the principals and substantial monetary fines.

In constructing time share facilities, the applicant must satisfy the BIA that it has the financial ability to complete the development with all of the requisites necessary for its proper operation. In addition to this obligation, the BIA will not grant a developing owner’s license unless satisfied that purchasers of the timeshare interests will have a right to occupy and use those accommodations and facilities for certain periods, not in excess of six (6) months in any year over a period of years not exceeding forty (40) years.

Generally speaking, whether the applicant wishes to construct, market, manage, or sell a time share in The Bahamas are required to satisfy the BIA that the time share development has made provision for, a summary of which can be found here .

Licensing Fees

Licensing fees currently range as follows, depending on the number of units in the timeshare project:

Developing Owner License Fees

Where project consists of:

• not more than 10 units ………………………………………………………….. $1,000.00
• more than 10 but not more than 20 units …………………………………..$2,000.00
• more than 20 but not more than 50 units …………………………………..$3,000.00
• more than 50 units …………………………………………………………………$5,000.00

Marketing Agent License Fees

Where project consists of:

• not more than 10 units …………………………………………………………….. $    500.00
• more than 10 but not more than 20 units ……………………………………..$1,000.00
• more than 20 but not more than 50 units ……………………………………. $1,500.00
• more than 50 units ………………………………………………………………………… $2,500.00

Managing Agent License Fees

Where project consists of:

• not more than 10 units ……………………………………………………………… $   25.00
• more than 10 but not more than 20 units ………………………………………$   50.00
• more than 20 but not more than 50 units ………………………………………$   75.00
• more than 50 units …………………………………………………………………….$100.00

Appointment of a Managing Entity

The Vacationing and Time Share Act provides that a managing agent must be appointed by the time share developer prior to the first sale of a time share interest., The developing owner will be considered the managing agent of the timeshare plan in the absence of an appointment or upon resignation of a managing party, unless and until it clearly provides in the public offering statement that a different party will serve in such capacity, who has acknowledged in writing that it has accepted the duties and obligations of serving as the managing agent. The developing owner will continue to be jointly and severally responsible for the obligations of the managing agent unless and/or until:

• the time share project is completely sold out;
• the developing owner no longer retains any estate, right, title or interest in or to the time share project; or
• the developing owner has voluntarily divested itself of its license.

Statutory Duties Held by the Managing Entity

The managing agent has a legal duty to manage and maintain all accommodations and facilities within the time-share project along with providing to all purchasers an itemized annual budget which includes all estimated revenues, expenses, and collecting an assessment of all common expenses held by the time share plan. The managing entity must also ensure that all books and financial records are maintained in accordance with International Accounting Standards and are made available for inspection by any purchaser or any authorized agent of such purchaser. Other statutory duties held by the managing agent include:

• scheduling occupancy of the time-share units, when purchasers are not already entitled to use specific time-share periods, so that all purchasers will be provided the use and possession of the accommodations and facilities of the time-share plan with respect to which they have purchased;
• performing any other functions and duties which are necessary and proper to maintain the accommodations or facilities as provided in the time-share plan and as advertised; and
• the managing agent shall maintain among its records and provide to the BIA upon request a complete list of the names and addresses of all purchasers and owners of time-sharing interests.

Right to Deny Delinquent Purchasers

The managing agent of any time-share plan have the statutory right to refuse the use of the time share accommodations and facilities to any delinquent purchasers (or parties claiming under the delinquent purchaser) who fail to provide payment of any assessments made by the managing agent. According to the Vacationing and Time Share Act, a purchaser is considered delinquent in the payment of a given assessment upon the expiration of sixty (60) days after the date the assessment is billed to the purchaser or sixty (60) days after the date the assessment is due.

Public Offering Statement

The act requires the developing owner to file with the Bahamas Investment Authority a public offering statement that contains all of the pertinent documents used in connection with the time share development, including all sales, marketing, and registration materials to be used in jurisdictions other than The Bahamas. The public offering statement is subject to the BIA’s approval, unless the authority provides an exemption from this requirement which can be obtained via application. The BIA may grant either a partial or complete exemption if it is satisfied that the applicant is financially sound, and that the foreign jurisdiction in which such time share project is advertised, marketed and sold, provides adequate legislative protection for time share purchasers. The BIA will require that this protection will be extended to any  purchaser who purchases their timeshare interests as a result of the marketing within the foreign jurisdiction.

The public offering statement must be given to each on-site purchaser prior to the execution of the purchaser’s contract. In applying for the approval for the grant of the time share license, the developer must file with the Bahamas Investment Authority a detailed public offering statement containing numerous disclosures regarding the timeshare development. The Vacationing and Time share Act has established a number of statutory requirements which must be included in every public offering statement, the details of which can be found here .

Time Share Agreement

The developing owner or its managing agent must apply to the registrar of vacation plans and time-sharing for the purpose of registering each purchaser’s rights in the Register of Time-Sharing Interests within sixty (60) days of execution of the purchaser’s time share agreement, and holds a duty to inform the Registrar of changes in the ownership of time share interests. The contract must be submitted and approved by the Bahamas Investment Authority, and upon its execution, the developing owner holds the obligation to provide each purchaser with a certificate or other evidence of such purchaser’s time share interest within sixty (60) days of the execution of the contract in a form approved by the BIA. Legislative commitments held by the time share developer may be delegated to management agent provided that the developing owner will remain jointly and severally liable for compliance with this requirement.

The Vacationing and Time Share Act provides an outline of conditions which must be included in a purchaser’s time share agreement including the disclosure of the purchaser’s seven-day rescission right, and any variation to the conditions of the time share agreement require the written approval of the BIA. In accordance with the Vacationing and Time Share Act each seller shall utilize and furnish each purchaser with a fully completed and executed copy of a contract pertaining to the sale which shall include the following information which can be found here .

Non-disturbance Clauses

At present, the Vacation and Time Share Act proscribes any foreclosure, exercise of power of sale, or any right or remedy under a mortgage or other debt instrument covering all or any portion of the time share project. The Act also prohibits the extinguishment or impairment of any purchaser’s interest in the time share project, regardless of whether the mortgage is given or filed for record prior to completion of any such development. If the time share developer finances the acquisition of the property on which the time share development will be located pursuant to a mortgage, or any other debt instrument encumbering the time share property, a non-disturbance clause must be included in the underlying debt instrument for the sake of protecting the interests of time share purchasers.

(To be Continued…)

Mario L. McCartney [esq.], B.A [Hons], LLB [Hons.] practices as Founder and Principal of the Chambers of LEX JUSTIS, a boutique law practice in Nassau, New Providence, The Bahamas. While presently engaged in general legal practice, Mr. McCartney’s specialty lies in debt recovery and offshore financial and corporate services, and is currently registered as a Compliance and Anti-Money Laundering Reporting Officer (CMLRO) for his Chambers. Mr. McCartney is also the present editor and main contributor of LEX JUSTIS blog site and welcomes all opinions and comments to his articles.

For further information on all legal services provided by Mr. McCartney please visit the LEX JUSTIS website @ www.lexjustis.com or email him at mmccartney@lexjustis.com, mario.l.mccartney@gmail.com.