It is an extraordinary occasion when hard luck exercises prejudice, and no matter the circumstances we all have suffered some form of adversity during our lifetime. For those who have experienced the heavy hand of misfortune in being accused of committing a crime while residing in or vacationing in The Bahamas, the dread of imprisonment is a common emotion suffered not only by the accused, but also concerned loved ones who become intimidated by the formalities of the local court procedures and legal colloquialism spoken by its professional attendees.  Indeed through the emotional turmoil of being accused of criminal activity while in The Bahamas, we certainly hope that this entry will provide a ray of sunshine regarding the country’s police and judicial procedures in relation to criminal procedures before trial.

Overall Legal Structure

Without a doubt the administrative and judicial systems of all countries (and in some cases its regions and cities) differ from one another, and it is safe to say that the Bahamas is no exception. As a former British colony the overall legal structure of the Bahamas derives from and follows closely with the English legal systemwhich is known as a “common law” legal system, a concept in which that many of the primary legal principals have been made and developed by judges from case to case in what is called a system of precedent, where the lower courts are bound to follow principals established by the higher courts in previous cases. Notwithstanding the creation of legal precedent within the common law system, and as practiced in most commonwealth countries the Government of The Bahamas, through the active role of Parliament also plays an important role in creating legislation and administrative policies which, with the judicial support of common law principals make up the country’s overall legal structure.

Search and Arrest

Initially there are two methods of initiating prosecution in The Bahamas, namely the arrest and charge of a suspect, which is normally handled by members of the Bahamas Police Force. Under the provisions of the Criminal Procedure Code, in making an arrest a police officer or other individual authorized to carrying out the arrest must actually touch or confine the body of the person to be arrested, unless there be a submission to the custody by word or action and may use reasonable force to execute an arrest and even greater force, should the circumstances justify the use of force which is more than reasonable in order to apprehend the offender. Powers of arrest can be carried out with a warrant of arrest or without a warrant of arrest should the arresting officer suspect under the following circumstances:

• Individuals seen by the arresting officer committing an offence against the personor property which is subject to a fine or imprisonment;

• Intoxicated, idle, or disorderly persons found disturbing the peace in any manner or guilty of any other offence against the law which may be an outrage of public decency or morality;

• any person found lying or loitering in a highway, yard, or other place by an arresting officer having good cause to suspect of having committed or about to commit any offence;

• any person whom any other person positively charges or states that he suspects of having committed any crime, and if the charge or suspicion appears to the arresting officer to be well-founded and the informant is willing to accompany the arresting officer and at the police station is willing to enter into recognisance conditioned to prosecute the charge;

• any person whom any other person charges with having committed an aggravated assault, if the arresting officer has good reason to believe that such an assault has been committed, although not within his view, and that by reason of its recent commission a warrant could not have been obtained for the apprehension of the person charged.

The power to search can be carried by an arresting police officer (or any other authorized individual) at the time of the arrest, to which all discovered articles found should be placed in safe custody. Women who are subject to an arrest must be searched by another woman (who need not be a police officer) and all searches conducted on the person require strict regard to decency. Offensive articles, such as weapons, illegal substances, or other instruments are normally confiscated and ultimately sent to the court as evidence.

Detaining the Accused

Once an individual is arrested he is taken to the nearest police station where he is detained for the duration of the investigation of the offence committed. While in police custody, the arrested individual is subject to a police interview, at which the individual may request the services on an attorney prior to the start of the interview. Once cautioned, the presiding officer will provide the accused with the option to either provide a statement in relation to the investigation or to provide answers to questions made by the presiding officer. Information provided by the accused is handwritten by the presiding officer and at the conclusion of the interview, the individual is able to verify the information written by the presiding officer and asked to sign the document.

Time Period in Custody

According to the Criminal Procedure Code, the arresting police officer must send the person arrested before a magistrate in a magistrate’s court no later than forty-eight (48) hours after the arrest, however an additional period of no more than forty-eight (48) hours can be provided (upon application to a magistrate made by a police officer of at least the rank of inspector) in circumstances where investigations are incomplete and where investigating officers:

• have to secure or preserve evidence relating to the offence;

• have reasonable grounds for believing that the person arrested will interfere with or harm the evidence connected with the offence or interfere with or cause physical injury to other persons;

• have reasonable grounds for believing that the persons arrested will alert other persons suspected of also having committed the offence who have yet to be arrested; or

• have reasonable grounds for believing that the person arrested will hinder the recovery of any property obtained as a result of the offence.

An extension can only be granted for offences specified under the First Schedule of the Bail Act and in being granted the extension, the detained person must be told the reason for the extended time period for detention and the reason must be duly noted in his custody records.

While in police custody persons (apart from the appointed legal representative) are not allowed to see the accused, however visitors are allowed to bring food, drink, a change of clothing, and reading material for the accused at the discretion of the supervising officer. Upon conclusion of the investigations the police will determine whether to prosecute the individual by ‘charging’ him with the criminal act committed.

First Appearance

Individuals who are charged with committing a crime are brought before a magistrate by the following business day. There are a number of Magistrate’s Court in New Providence located within or nearby the downtown district of the island, however to avoid any unnecessary headaches and complications visitors who wish to know the location of a court hearing should first attend the Prosecution’s Office located on Parliament St.

Guilty Pleas

At the First Appearance, the presiding magistrate will read the charges to the accused upon which the accused will be required to enter a plea of guilty or not guilty (although in some instances individuals may opt not to enter a plea at that particular time). If the individual enters a guilty plea, the magistrate will require the prosecuting officer to present the details concerning the charges to the individual who will be required to admit or deny the charges held, upon which the magistrate will impose the relevant sentence (either a fine, imprisonment, conditional release, etc.). If the magistrate imposes a fine, the accused will be remanded to police custody until the fine is paid, or if sentenced the individual will normally be sent immediately to Her Majesty’s Prison.

‘Not Guilty’ Pleas

Should the accused enter a not guilty plea, depending on the type of criminal activity for which the accused is charged, the magistrate will determine whether the matter will be heard in the Magistrate’s Court or in the Supreme Court. Summary offences are normally heard in the Magistrate’s Court while offences triable only on indictment are heard in theSupreme Court. In circumstances where a triable either way offence is committed, both the accused and Magistrate can mutually agree to have the matter tried in either the Magistrate’s or Supreme Courts.

The distinction between both courts is held by their ability to render judgment and to determine the type of sentence the accused will bear. Magistrate’s Court is known to hold faster trial proceedings as a Magistrate(s) alone will determine the judgment of the accused as well as the length and type of sentence imposed if the accused is found guilty, however the sentencing powers of a Magistrate are limited to fines not exceeding ten thousand Bahamian dollars (B$10,000.00) and imprisonment not exceeding five (5) years. Justices of the Supreme Court are able to pass any sentence authorized by law in respect of the offence committed after a guilty verdict is rendered, however judgment is determined by a sitting jury, the appointment of which along with other procedural obligations tend to make overall proceedings slower than matters held in the Magistrate’s Court.

After the accused enters a plea and the place in which the case will be heard, the magistrate will determine whether the accused is eligible for bail (which is based on the type of crime for which the individual is charged, and whether the Court is of the opinion that further detention of the individual is not justified). If eligible, the magistrate will invite the Prosecution to submit any objections to the release of the individual on bail. The court can withhold the grant of bail under the following circumstances:

• Where there are substantial grounds for believing that the individual would either:

1. Fail to surrender to custody;
2. Commit an offence while on bail;
3. Interfere with witnesses or otherwise obstruct the course of justice;

• Where the accused is charged with an offence mentioned in Part C of the First Schedule of the Bail Act;

• Where the accused is charged with an offence while already on bail at the time of the present offence;

• Where the accused must be kept in custody for his own protection;

• Where the accused is currently serving a custodial sentence imposed for a previous offence;

• Where the court is satisfied it has not been practicable to obtain all the information necessary for a proper decision on bail to be made;

• Where the accused has already failed to surrender to bail in the current case.

Subsequent to the conditions contained in the list above the court will also take into considering the following factors:

• The nature and seriousness of the offence;

• The character, antecedents (criminal history), associations, and community ties of the accused;

• The record of fulfilling bail requirements in the past by the accused;

• The strength of the case against the accused, and any other relevant issues to consider.

After granting or refusing bail, the magistrate will then schedule a Preliminary Inquiry, a court hearing in which the magistrate will determine whether there is sufficient evidence against the accused to hold a trial. If sufficient evidence is found, the magistrate will then schedule a trial of the offence committed in the appropriate court.

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.

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.

A vacation with your closest animal friend is worth the experience and when travelling to the bustling capital or the quiet out-islands settlements of The Bahamas, timely preparation is the best approach when taking your furry friend on your island getaway. Avoiding unnecessary hiccups during your travels contributes to a great holiday, and in order to achieve this we present the short guideline below:

Applying for Import Permit

If you plan on taking your pet during your Bahamas vacation it is important that you submit an application for an import permit within a reasonable time before your planned departure date as the time for approving your application may take at least a month to process. Despite the long wait, the import permit will be valid for one year from the date of issue; therefore it is advised that you permit enough time to submit your application before your trip.  You must also present the import permit upon arrival to the designated port of entry.

Approval for the provision of an import permit is granted subject to the following conditions:

• The animal must be 6 months of age or older.

• The animal must be accompanied by a valid certificate which substantiates that it has been vaccinated against rabies within not less than 1 month and not more than 10 months prior to importation.

Completion of Form (IMP/1(B)) by Your Local Veterninarian

Upon receiving your approved import permit, you will also receive a form (IMP/1(B)) for your veterinarian to confirm the age and health of your pet. This form needs to be dated no more than forty-eight (48) hours before your arrival in The Bahamas.

Veterinary Health Certificate

Upon arriving in The Bahamas you must present your import permit along with a veterinary health certificate presented within 48 hours of arrival in the Bahamas to a licensed veterinarian for an examination. This certificate should be prepared by a licensed veterinarian from the country of origin certifying that:

• if your pet is a dog: the dog(s) has/have adequate levels of immunity conferred by being actively immunized against the following diseases: Distemper, Hepatitis, Parvovirus, Leptospirosis, Adenovirus and Coronavirus or

• If your pet is a cat: the cat(s) has/have adequate levels of immunity conferred by being actively immunized against the following diseases: Feline Leukemia, Feline Rhinotracheitis, Feline Calicivirus, Feline Panleukopenia an Feline Pneumonitis.

• The animal(s) is/are free from internal parasites as determined by a negative fecal floatation examination,

• the animal(s) is/are free from external parasites.

• the animal(s) is/are six (6) month of age or older.

• the animal(s) must be presented to a Licensed Veterinarian for examination within forty-eight (48) hours of arrival in the Commonwealth of The Bahamas.

Payment of Fees

Application forms, along with cash or international money order payment of $10.00 per animal should be sent to the Director of Agriculture at the following address:

Director of Agriculture

Department of Agriculture

Levy Building, East Bay Street

P.O. Box N-3704

Nassau, Bahamas

You may also submit an additional payment of $5.00 via cash or international money order if you wish to have your approved import permit faxed to your home or office. You can call the department at 242-325-7502 or 242-325-7509, or fax them at 242-325-3960 if you have an inquiry or if you wish to follow up on your submitted application.

Customs duty

Upon arrival to The Bahamas you may be required to pay customs duty for permanent entry of your pet. Dogs, cats, cattle and horses are $10.00 plus 1/2% of the value of the animal. Yearly fees for dog licenses in New Providence, Grand Bahamas and the family islands are: $2.00 for male or spayed female, and $6.00 for unspayed females.

Don’t forget to permit yourself enough time to submit and receive your application and to have your furry pals examined by your local veterinarian prior to your departure date. We would recommend using international money orders when submitting your application and request that the approval for your import permit to be faxed rather than receiving the document via post. Also, we would recommend making an appointment to visit one of the Bahamian veterinarian clinics prior to your departure in order to avoid any complications during your stay.

(Series 2 of 3)

Hotels in The Bahamas have been one of the most important aspects of the nation’s tourism industry. In the 1920’s and 1930s during the Prohibition in the United States, guests were accommodated at the major hotels – the New Colonial, the Fort Montagu, completed in 1926, and the Royal Victoria. Hotel operators enticed travelers with sporting tournaments and other sightseeing activities at the historical landmarks of New Providence. Foreign elite were lured by the exclusive Porcupine Club on Hog Island (now Paradise Island), the posh Bahamian Club on West Bay Street and others such as the Cat Cay and Bimini Rod and Gun Clubs. The Bahamian Club, which opened in 1920, was the first gambling facility in the Bahamas.

In the 1950s and 1960s, tourists flocked to the new resorts just west of Nassau at Cable Beachand to Paradise Island in the 1960s and 1970s. With its exclusive environment, Paradise Island soon drew other major investors like Merv Griffin and Donald Trump, whose creative genius made the island of paradise one of the most popular holiday destinations of all time.

Surely, establishing a hotel in The Bahamas can easily be one of the most important milestones of your lifetime. Boasting one of the world most attractive beaches, a stable government, and friendly culture, establishing a Bahamas based resort is a sound asset that will greatly benefit the pockets of its investors in the long term. Coupled with a strong commitment by the Bahamas Government to promote the islands of the archipelago along with incentive driven legislation, The Bahamas continues to be one of the most popular destinations to establish a vacation resort.

In this series we will outline the fundamental aspects of resort development from a legal perspective. Notwithstanding the fundamental requirement to gain the approval of the Bahamas Investment Board and to acquire land needed for the resort, we will cover the relevant law associated with hotel operations along with regulations addressing the minimum standards of the hotel establishment as well as duty incentives offered by the Government of the Bahamas. We do hope that you will find this series helpful in accomplishing your dream of hotel development in paradise.

In the first series we briefly discussed the definition of a Bahamian hotel and outlined the expected fees required through acquiring a hotel license, as well as payment of taxes for each hotel guest. We will now look at the expected physical conditions and safety measures to be upheld by resort operators.

Physical Standards Established by Legislation

The subsidiary legislation of the Hotels Act provides a guideline of the standard physical condition of a hotel in The Bahamas. Known as the Hotel Regulations, it the provides a general listing of all structural fixtures and chattels held within a hotel building and also address the minimum safety standards required.

Maintenance of interior of hotels

The Hotel Regulations require that the interior part of the structure of every hotel and all contents within (i.e. fixtures and chattels) thereof and all articles used are be kept clean and in good condition, in particular:

• that the interior shall be kept free of insects, termites, rodents and other vermin;
• that all stairs are to be equipped with soundly constructed and adequate handrails; and
• all stairs, corridors and lobbies must be adequately illuminated.

The Regulations provide that upholstery of every hotel building including mattresses and all bed accessories (i.e. linen and pillows), rugs and floor coverings, and all shades and blinds are to be kept clean and in good condition. All china, glassware, tableware and other crockery provided for use by hotel guest shall be clean and in good condition, free from any cracks or chips.

Sleeping Rooms

Guest rooms of all Bahamian hotel establishments are held to strict requirements to attain minimum measurements and a quality standard in its cleanliness and upkeep. The Regulations provide for adequate lighting of all hotel sleeping rooms for its guests via interior lighting and/ or exterior lighting from the building.

Guest sleeping room are required to be no be less than eight feet in width and eight feet high, the floor area of a sleeping room (excluding all shower space, closet space and the space of any foyer or corridor leading to a sleeping room) must be:

• not less than eighty square feet for sleeping rooms intended for occupation by one person,
• not less than one hundred and ten square feet  for sleeping rooms intended for occupation by two persons,
• in any other case, not less than such amount as may be allowed by the Board.

Approval of Renovations to Hotel Building

Should the hotel operator decide to renovate or alter the structure of the hotel building the laws of the Bahamas require written approval of any public officer or authority. Hotel operators must furnish the Board with two copies of any construction plan that is submitted to such officer or authority in support of any application made for the sanction or approval of such alteration.

Maintenance of exterior of hotels

The Hotel Regulations also requires that the exterior part of the structure of every hotel to be kept clean and in good condition and repair. The Regulations specifically refers to the necessity of the provision of soundly constructed and adequate handrails,  properly maintained and illuminated for all stairs, roads, foot-paths and alley-ways, free from obstruction and adequately drained at all times.

It is mandatory for garbage held for disposal in any hotel location to be kept in a sealed plastic bag and shall be stored in such manner as to prevent the spread of offensive odors or the attraction of insects. Should the hotel decide to maintain a sewage disposal plant, the hotel must keep the garbage plant in good working order.

Mandatory Fire Prevention Policy for Hotel Establishments

Hotel operators have the legal obligation to take all reasonable precautions to prevent fire in the hotel and to ensure that all fire equipment therein in good working order. By law, fire procedures are required to be published in accordance with the guidelines provided by the Commissioner of Police, and must ensure that all employees of the hotel establishment are instructed in the hotel’s fire procedures.

Hotel fire exits must be maintained in order to provide free and unobstructed egress from all parts of the hotel, and no lock or other fastening are allowed to be installed on any such exit which prevents such egress. Fire exit routes in a hotel must be visible in such manner that hotel guests may readily know the direction of escape from any part of the hotel in the event of fire.

Every hotel must be equipped with a fire alarm system which shall be kept in good working order and tested no less than once per month, and be recorded in the logbook of the hotel. Incidents of fires occurring within the hotel establishment are to be recorded in a hotel logbook, and by law, must be signed by supervisors and other individuals in charge of the hotel operations.

All changes and amendments to a hotel’s fire procedures, as well as to the location fire exits, fire-fighting equipment must receive approval of the Commissioner of Police. Hotel legislation also provides that the duty of hotel operators to notify the senior officer of police or the local fire brigade for the district in which the hotel is situated.  Hotel legislation also prohibits tampering with or removing any fire equipment in a hotel, unless there is a lawful excuse.

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.

Every once in a while you hear the popular acronym normally associated with one of those tax haven islands in the middle of the ocean. If you happen to be a resident of one of those tax haven islands, your association of the acronym may waver slightly as the letters TIEA are often followed by tax dodgers, murky colored ‘lists’ described as being grey, black, etc., while the iron fists of the world’s superpowers hang overhead. And if you live in The Bahamas you probably heard of the term being discussed in the subject of disappearing offshore banks and other financial institutions. The question which most people ask is “What in the world is a TIEA?”

Due to the current global financial collapse, international finance jurisdictions are under increasing pressure as these crisis forces industrialized nations to seek more sources of tax revenue. As the notion of ‘tax transparency’ continues to emerging as a vital political aim, OECD Member States have began to implement defensive measures against jurisdictions that refuse to sign TIEAs and have adopted a three-tiered grading system for jurisdictions and the level of transparency that they have. The current system is that those jurisdictions which have 12 TIEAs are considered to have ‘substantially implemented the internationally agreed tax standard’. Political leaders within the US and European member states suggest that the requirements to meet the international tax standard are likely to increase in the near future.

Defining Tax Exchange Agreements (TIEAs)

A Tax Information Exchange Agreement (TIEA) is a bilateral Agreement that has been negotiated and signed between two countries to establish a formal regime for the exchange of information regarding to taxes, the purpose of which is to promote international co-operation in tax matters through exchange of information.

Model agreements on exchange of information on tax matters were developed by the OECD Global Forum Working Group on Effective Exchange of Information sometime around 2002 in order to develop a legal instrument that could be used to establish effective exchange of information. The Agreement represents the standard of effective exchange of information for the purposes of the OECD’s initiative on harmful tax practices. The Model TIEA provides that the Parties shall give “information that is foreseeably relevant to the determination, assessment and collection of such taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters.”  It allows for a two year phase between information sought in criminal tax matters, i.e. criminal tax evasion, versus the later extension to information sought in civil tax matters i.e. civil tax evasion but importantly also tax avoidance.

Limitations of TIEA Agreements

In addressing the limited powers of TIEAs, information requested by a party to a TIEA agreement can only be processed once the TIEA comes into force. In accordance  with the terms and conditions of TIEAs, powers provided by the agreement are effected by request only, and information provided to ‘Competent Authorities’ as a result of the terms and conditions of a TIEA are not handed arbitrarily or indiscriminately upon request for tax information. ‘Fishing expeditions’, a practice of which is feared by most interest groups and concerned professionals alike, are explicitly banned from practice by parties to a TIEA, as all agreements include a set of guidelines and criteria which must be adhered to by a party which request for tax information from another. Should information requested by the competent authority be declined, competent authorities have the right to enforce the terms and conditions of the TIEA by applying for a search warrant, court order, etc.

How Tax Information will be provided

Each TIEA is specific on how tax information is requested. Normally under the terms and conditions of a TIEA, parties to a TIEA agreement are obligated to provide:

• information held by banks, other financial institutions, and any person acting in an agency or fiduciary capacity including nominees and trustees;
• information regarding the ownership of companies, partnerships, trusts, foundations, “Anstalten” and other persons,…ownership information on all such persons in an ownership chain; in the case of trusts, information on settlors, trustees and beneficiaries; and in the case of foundations, information on founders, members of the foundation council and beneficiaries….”

Procedurally, the Requesting State’s competent authority must provide, in order to “demonstrate the foreseeable relevance of the information to the request” the following information:

• the identity of the person under examination or investigation;
• a statement of the information sought including its nature and the form in which the applicant Party wishes to receive the information from the requested Party;
• the tax purpose for which the information is sought;
• grounds for believing that the information requested is held in the requested Party or is in the possession or control of a person within the jurisdiction of the requested Party;
• to the extent known, the name and address of any person believed to be in possession of the requested information;
• a statement that the request is in conformity with the law and administrative practices of the applicant Party, that if the requested information was within the jurisdiction of the applicant Party then the competent authority of the applicant Party would be able to obtain the information under the laws of the applicant Party or in the normal course of administrative practice and that it is in conformity with this Agreement;
• a statement that the applicant Party has pursued all means available in its own territory to obtain the information, except those that would give rise to disproportionate difficulties.”

US – Bahamas TIEA Agreement

The TIEA agreement executed by the US and Bahamian authorities are divided into seven articles, a copy of which can be found here: http://www.oecd.org/dataoecd/20/14/35514646.pdf . For your convenience we have summarized the agreement to get feel the specific nature of the agreement and for a better understanding of the TIEA relationship between both countries:

Article 1: Definitions

This article defines the scope and objects of the agreement in general (i.e. the “Competent Authority” in the US is the Secretary of the Treasury or his delegate, while the Minister of Finance (or his delegate) is the Competent Authority for The Bahamas).   The article also addresses jurisdictional concerns such as the agreement’s interpretation of a “criminal matter”, which is understood as being “an examination investigation or proceeding concerning conduct that constitutes a criminal tax offense under the laws of the United States.

Article 2: Provision of Information with Respect to US Taxes

Provisions set forth in the 2^nd Article govern the request for the exchange of information which indicates the US will only make a request for information when the Competent Authority of the US is unable to obtain the requested information by other means. It also provides the Competent Authority of The Bahamas with the authority to obtain and provide information held by US financial institutions, agents, nominees, etc. Article 2 also limits the request made by the US Competent Authority to US taxpayers which “shall be framed with the greatest degree of specificity possible”. The requested information is required to be fit for use in judicial or administrative proceedings of the US and Bahamas, and shall include the depositions of witnesses, authenticated copies of original documents, which include books, papers, statements, records, accounts, and writings.

Requests made in respect of non US residents or does not constitute a criminal matter, the article demands that the Secretary of the US Treasury certify that “such request is foreseeably relevant or material to the determination of the federal tax liability of a taxpayer of the United States or the criminal liability of a person under the federal tax laws of the United States”. The Article also requires the satisfaction of the Competent Authority of The Bahamas that the information is forseeably relevant to the administration and enforcement US federal tax laws.

Article 3: Protection of Information with Respect to United States Federal Taxes

The 3^rd Article defines the scope of confidentiality pertaining to the tax information requested and limits the exposure of this information to departments, agencies and judicial and administrative bodies of the US government and its employees and agents involved in assessing, collection, administrating either the recovery and collection of claims derived from, the enforcement, prosecution, or the determination of appeals in respect of tax claims. The article also addresses the use of the information provided before the 1^st of January, 2006 concerning a criminal matter shall not be used in connection with any other matter without prior consent of the Competent Authority of The Bahamas and without written notice of the Competent Authority of the US.

Article 4: Qualified Intermediaries

This article addresses the application of a person in The Bahamas to enter into a Qualified Intermediary Withholding Agreement with the US Internal Revenue Service (IRS). The US Government shall certify that The Commonwealth of The Bahamas has taken significant steps towards achieving effective rules and/or procedures for providing tax information to the United States of America for both civil tax administration and criminal tax enforcement purposes, and the Internal Revenue Service of the United States of America has determined The Bahamas’ “Know Your Customer” (KYC) rules to be acceptable within the meaning of Section 3 of Revenue Procedure 2000-12.

Article 5 & 6: Convention Tax Treatment & Administrative Provisions

The 5^th Article establishes the deduction of income costs incurred in respect to attending a conference or convention held in The Bahamas or US by a US taxpayer. The 6^th Article provides the Competent Authorities to enter into agreement for the purposes of implementing the terms and conditions of the TIEA to which the article provides for thedirect communication and mutual agreement between both Competent Authorities for the resolution of disputes arising as to the interpretation or application of the TIEA, along with reimbursement of direct costs incurred in providing tax information

Article 7: Entry into Force, Effective Date, Modification and Termination

The last article of the US – Bahamas TIEA provides a schedule of enforcement of the previous articles and allows the modification of the TIEA agreement by both parties if any further TIEA models are developed by OECD or other International organizations. This article also allows for the termination of the TIEA agreement by either party at any time, providing that three months written notice is provided through diplomatic channels.

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.

(Series 1 of 3)

Hotels in The Bahamas have been one of the most important aspects of the nation’s tourism industry. In the 1920’s and 1930s during the Prohibition in the United States, guests were accommodated at the major hotels – the New Colonial, the Fort Montagu, completed in 1926, and the Royal Victoria. Hotel operators enticed travelers with sporting tournaments and other sightseeing activities at the historical landmarks of New Providence. Foreign elite were lured by the exclusive Porcupine Club on Hog Island (now Paradise Island), the posh Bahamian Club on West Bay Street and others such as the Cat Cay and Bimini Rod and Gun Clubs. The Bahamian Club, which opened in 1920, was the first gambling facility in the Bahamas.

In the 1950s and 1960s, tourists flocked to the new resorts just west of Nassau at Cable Beachand to Paradise Island in the 1960s and 1970s. With its exclusive environment, Paradise Island soon drew other major investors like Merv Griffin and Donald Trump, whose creative genius made the island of paradise one of the most popular holiday destinations of all time.

Surely, establishing a hotel in The Bahamas can easily be one of the most important milestones of your lifetime. Boasting one of the world most attractive beaches, a stable government, and friendly culture, establishing a Bahamas based resort is a sound asset that will greatly benefit the pockets of its investors in the long term. Coupled with a strong commitment by the Bahamas Government to promote the islands of the archipelago along with incentive driven legislation, The Bahamas continues to be one of the most popular destinations to establish a vacation resort.

In this series we will outline the fundamental aspects of resort development from a legal perspective. Notwithstanding the fundamental requirement to gain the approval of the Bahamas Investment Board and to acquire land needed for the resort, we will cover the relevant law associated with hotel operations along with regulations addressing the minimum standards of the hotel establishment as well as duty incentives offered by the Government of the Bahamas. We do hope that you will find this series helpful in accomplishing your dream of hotel development in paradise.

Defining a Hotel under Bahamian Law

Under previous Bahamian legislation a hotel means any building or a group of buildings enjoying common ancillary services in which accommodation is provided for reward for guests by a common management, and that the buildings contain no fewer than four bedrooms for the use of guests as sleeping accommodation, or be equipped with no fewer than ten beds for such use.

The recent amendments to the Hotels Act has now altered the definition of a hotel to include the concept of the “owner occupied rental home and owner occupied property” which is defined as “property occupied by a person who being the owner in fee simple or as a mortgager in possession, occupies and resides in such property exclusively as a dwelling house on a permanent or seasonal basis”. It seems that the minimum requirements of no fewer than four bedrooms for the use of guests as sleeping accommodation, or be equipped with no fewer than ten beds for such use, as required in the previous act, no longer apply.

Due to the recent concept of the condo hotel, the Hotels Act defines a condo hotel, as a building used as both a condominium and a hotel, thus allowing the owner to rent his unit to other visitors like any other hotel room, when the unit is not in use. Under Bahamas legislation a condo-hotel is a hotel which satisfies the following requirements:

• it shall be licensed under this Act and shall pay hotel license fees;
• it shall pay hotel guest
• it shall pay business license fees;
• it shall pay real property taxes, if applicable; and
• individual units shall remain in the hotel’s general rental pool for a minimum period of nine months per year.

Licensing a Bahamian Hotel

Obtaining a Hotel License

The Hotels Act provides the Hotel licensing Board with the authority to grant hotel licenses to its applicants wishing to operate a hotel in The Bahamas having regard to the need in the public interest to maintain an efficient hotel industry in The Bahamas. Through application made by the hotel operator, the hotel licensing board may also provide temporary licenses and play a deciding role in the, the transfer of licenses from one party to another, as well as varying any terms and conditions in which a hotel license can be held.

Under section 6 of the Hotels Act the licensing board also has the authority to establish the duration of the hotel license, which normally takes effect and expires on the 31^st day of December each year (for hotels in New Providence and Grand Bahama), and in any other case, on the thirty-first day of March, and may also provide an extension of the hotel license for further periods after the normal expiration date subject to the payment of the hotel licensing fee.

Fees Involved in Bahamian Hotel Ownership

Hotel license fees and Hotel guest tax are two types of fees involved in hotel ownership in The Bahamas. According to the Hotels Act, hotel license fees are paid to the hotel license board in respect thereof for the sum of three (3) dollars for each bedroom provided in the hotel for the use of guests as sleeping accommodation (S15 Hotels Act). This amount is applicable to hotels having:

• fewer than ten bedrooms for use of guests as sleeping accommodation or equipped with fewer than twenty (20) beds for such use in New Providence;
• in any Out Island either having fewer than twenty-five (25) bedrooms, or equipped with fewer than twenty (20) beds.

Under S16 of the Hotels Act, hotel guest taxes are paid by each guest of any hotel for the period during which the guest is provided with sleeping accommodation, at which the sum of six (6%) percent is charged of the total room rate for the period which the guest is provided with sleeping accommodation. Under legislation it is the duty of the hotel operator to collect the guest tax from its guest and make payment to the Public Treasury and, if permitted by the hotel licensing board, may be paid in installments or at such periods as may be prescribed (S17, Hotels Act).

Under Section 21 of the Hotels Act the hotel operator is required to keep and maintain financial records of the hotel, which may be inspected by the Minister or any person authorized by him in that behalf. This also includes make copies of any documents which relate or appear to relate to the financial records of the hotel. The Minister also holds the authority to request any information pertaining to the hotel operation as required by the Minister.

Default of Payment and Penalty for Operating without a Hotel License

The Hotel Licensing Board may by notice in writing require the operator of the hotel to remedy the default within such time, not being less than fifteen days, as may be specified in the notice. The Board may, where there is a license in force in respect of the hotel, by instrument in writing cancel that license, if an hotel is in default as alleged by a notice and the operator thereof fails within the time specified in the notice to remedy the default complained of by the Board.

Section 23 of the Hotels Act establishes the application of a fine for hotels operating without a license and the non-payment of hotel guest tax which includes:

• A fine of $500.00 each day of operation without grant of a hotel license (S23)
• A fine of $600.00 or, (at the election of the Minister) treble the amount of unpaid hotel tax unpaid.

Supplementary Licenses

Apart from the grant of a hotel license a hotel operator may also want to have other tourist based businesses as part of the hotel operation. Most Bahamian hotels provide at the minimum, the sale of food and alcoholic beverages, while larger hotel operations will have more operations (i.e. gambling facilities, beauty/ massage parlors, city tours, etc.) which are either contracted to local Bahamians or operated by the hotel establishment. It is important that either the contractor or hotel establishment has obtained the legal right to conduct any business services by obtaining the necessary business licenses to do so.

Determining which licensing authority to apply to will depend on the type of business the applicant will want to establish. Hotel operations wishing to operate gambling facilities must apply to the Bahamas Gaming Board in order to obtain a license, while hotel operations wishing to sell liquor must apply to the Liquor Licensing Board for an operating license.

(Series 2 of 3 to be cont.)

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.

Legal practitioners in The Bahamas are subject to strict ethical rules whose aim is to promote integrity, trustworthiness, competence, confidentiality, and the provision of honest and candid advice in the utmost good faith. They must be impartial, in that they should avoid acting where they may be subject to a conflict of interest and when acting as an advocate the legal professional must represent his/her client resolutely, honourably, and within the limits of the law, while treating the tribunal or court with courtesy and respect. Counsel and attorneys acting in other professions, businesses or occupations must not allow those outside interests to jeopardise their professional integrity, independence or competence.

Unfortunately those belonging to the country’s legal profession have suffered from a dwindling professional reputation caused by the unethical behaviour of ‘a few rotten apples’. As the number of attorneys practicing in the archipelago has already exceeded the dreaded one thousand member mark, the public outcry against the profession remains. This reality renders the importance of being informed of the disciplinary procedures for members of the legal profession before engaging in legal services.

The framework of legal profession in The Bahamas is governed by the statutory and subsidiary provisions of the Legal Professions Act, Ch.64 (“The Act”). The Act not only plays a role in the establishment and governance of the Bahamas Bar Association and the Bar Council, but also the execution of disciplinary procedures against legal practitioners who fall short of the ethical and professional standards set by the Legal Professionals Act. The Act delegates this disciplinary authority to the Disciplinary Tribunal   which includes:

• striking off the Roll or removing from the Register of Associates or the Register of Legal Executives the name of the counsel and attorney, registered associate or the legal executive, as the case may be, to whom the complaint relates;
• in the case of a counsel and attorney, suspending the counsel and attorney from practice for a period not exceeding three years;
• ordering payment by the counsel and attorney, registered associate or legal executive, as the case may be, of a penalty not exceeding one thousand ($1,000.00) dollars;
• payment of compensation for any personal injury, loss or damage resulting from the improper conduct that is the subject matter of the complaint;
• payment by any party of costs or of such sum other than on a complaint against a legal executive as the Tribunal may consider a reasonable contribution towards costs.

Making a Complaint

The Bar Council’s job, amongst other things, is to maintain the honour of the legal profession, and to promote standards of etiquette and professional conduct amongst lawyers. Lawyers must be impartial, in that they should avoid acting where they may be subject to a conflict of interest.

All individuals, whether a client, former client, or professional, are allowed to pursue a formal complaint against a legal professional to the Ethics Committee of the Bahamas Bar Council. This may be done by letter describing in detail, the events which led to the alleged misconduct. If possible the complaint should be supported by evidence and if possible, a sworn affidavit. Upon delivery to the office of the Bahamas Bar Association, the complaint is then forwarded to the Ethics Committee for review and further action.

What Constitutes Improper Conduct?

Section 29 of the Act provides a guideline on behaviour which constitutes improper conduct by legal professionals. Aggrieved clients who are contemplating reporting a member of the legal profession may apply this guideline to their particular circumstance. Although improper conduct should not be limited to the behaviour listed within the Act, the Legal Professions Act determines that the following should be considered improper conduct by a member of the legal profession:

• for the purpose of procuring his admission to practice, made a statement which is false in any material particular;
• makes while acting in the capacity of counsel and attorney a statement which to his knowledge is false in any material particular;
• knowingly or recklessly makes any statement for the purpose of an application under subsection (3) of section 26 of the Legal Professionals Act which is false in any material particular;
• contravenes any regulation under this Act as to the professional practice, conduct or etiquette of counsel and attorneys, or the keeping of accounts by them;
• employs any unqualified person, or permits any unqualified person in his employ, to engage in any business, matter or thing in which such a person is prohibited from engaging under this Act;
• takes an articled clerk despite practicing  for a period of less than 5 years;
• is otherwise guilty of conduct unbefitting a counsel and attorney; and
• for the purpose of procuring his registration as a registered associate or legal executive, produced a certificate which is false in any material particular or does not relate to himself, or made any statement to his employer relating to his qualifications for such registration which is false in any material particular;
• in any business, matter or thing in which the registered associates or legal is entitled to engage on behalf of his employer under this Act, acts in any manner which would, were he a counsel and attorney, constitute improper conduct applied to a counsel and attorney.

Role of The Ethics Committee

The Ethics Committee’s job is to filter out those complaints against lawyers which appear to lack reasonable grounds, to reprimand those lawyers that have breached the rules of conduct, and to forward the other, more serious complaints to the Disciplinary Tribunal for full hearing. An Ethics Committee is composed of three (3) to five (5) Bar Council Members. The Ethics Committee may make its determination after hearing the complainant and the lawyer complained against in separate hearings.

Role of the Disciplinary Tribunal

Based on the decisions of the Ethics Committee of the Bahamas Bar Council, complaints may be referred to the Disciplinary Tribunal which is the Court before which complaints are made fully, by the examination and cross-examination of evidence and witnesses. This is the stage at which complaints are subjected to rigorous scrutiny, when arguments are made in full, and charges of significant improper conduct tried. Once a complaint has been forwarded to the Disciplinary Tribunal from the Ethics Committee, those complaints that were previously outlined in letters are required to be incorporated in an affidavit or affidavits to comply with the provisions of the Evidence Act, which applies to Tribunal hearings as though it was a Supreme Court trial. Tribunal hearings are usually held in private in order to protect the lawyer’s reputation until an actual decision has been made. Details of the Tribunal’s decision are made public thereafter.

The Disciplinary Tribunal is composed of at least four (4) persons, one of whom, a Judge of the Supreme Court appointed by the Chief Justice, acts as the Chairman. At least one other member of the Tribunal must be from outside the legal profession and appointed by the Attorney-General, and other members must be Counsel and Attorneys of not less than seven (7) years standing, appointed by the Bar Council. Any person dissatisfied with the decision of the Tribunal (or indeed that of the Ethics Committee, or the Bar Council) may appeal to the Court of Appeal.

Knowing the Required Qualifications of a Legal Practitioner

Like any other commonwealth jurisdiction in the international community, there is a slight concern with individuals who falsely hold themselves out to be qualified professionals to both residents and visitors of The Bahamas. Reports of individuals impersonating attorneys have been rare; nevertheless visitors wishing looking to invest in The Bahamian economy should take the effort to guard themselves against the trickery of the modern day pirates laying in wait for an unsuspecting victim. You will find the various kinds of legal practitioners along with the required qualifications listed below:

Barristers

• Qualification after Completion of the Bar or as a solicitor of the Supreme Court within the Commonwealth (apart from awarded a Legal Education Certificate by the Council of Legal Education of the West Indies),
• A person is qualified for admission to practice under this Part of this Schedule if he has been awarded a Legal Education Certificate by the Council of Legal Education of the West Indies, by:

1. Holding  a degree in law from a university or institution approved by the Bar Council and the Council of Legal Education of the West Indies as being academically equivalent to a Bachelor of Laws degree from the University of The West Indies, and
2. is a person who completed the period of articleship required by subsection (2) of section 43 with a counsel and attorney in actual practice in The Bahamas and such articles began on or before the expiration of two years from the appointed day or on such later date as the Attorney-General may by order designate, and
3. has passed the examinations approved by the Bar Council and the Council of Legal Education of the West Indies for the purposes of this Part.

Legal Executives

Legal executives are trained legal professionals who often specialize in a particular area of law. Legal executives undertake a series of training courses and are required to pass qualifications in Law in the area of legal practice that they intend to specialize.

Trainees will often work at the same time as studying in order to acquire practical skills. There is, however, no direct equivalent to a Legal Executive in Scotland. Like the US they perform the similar duties to that of the legal executive, and in most cases they are unable to conduct any form of litigation. Legal executives however, are permitted to appear before a tribunal or other authority by a legal executive on behalf of the counsel and attorney in whose service the legal executive is employed.

Legal executives work under the supervision of an attorney and are fee earners, although they cannot practice on their own account. Under Bahamian legislation the work of a legal executive requires them to hold the same ethical standards as barristers and solicitors.

Section 51 of the Legal Professions Act establishes that the names of legal executives employed by counsel and attorneys upon being satisfied that the person has satisfied the prescribed qualifications and upon payment of the prescribed fee shall be recorded in the Register of Legal Executives. Individuals holding themselves as practicing legal executives without having their names recorded in the Registrar of Legal Executives are strictly prohibited and will be guilty of an offence and liable to a fine not exceeding five thousand dollars or imprisonment for a term not exceeding three years or to both such fine and imprisonment.

Registered Associate

A person is qualified for registration as an associate if he has been called to the Bar or admitted to practice as a barrister or a solicitor or as an attorney-at-law before a court of unlimited jurisdiction in any country whether within or without the Commonwealth and, having the legal right to be gainfully employed in The Bahamas.

Queen’s Counsel

Section 15 of the Legal Professions Act addresses how a practicing attorney is appointed to the member of Her Majesty’s Counsel as a Queen’s Counsel. A Queen’s Counsel is a status conferred by the crown that is recognized in the courts. He is appointed by the Governor-General upon recommendation made by the Prime Minister after being advised by the Attorney-General. In order to be appointed as one of Her Majesty’s Counsel, the attorney must file an application to the attention of the Attorney General, and upon appointment he is entitled to use the initials Q.C immediately after his respective family name.

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.

Currently one of the more popular water cooler discussions in The Bahamas stem  from the recent discoveries and testimonies of the John Travolta extortion trial where it seems that the local  politicians just can’t get away from the burning flames of international controversy. Sadly the politician caught up in the flames also happens to be a member of the Bahamas bar and had acted in that capacity during the time the alleged extortion took place:  http://www.tribune242.com/news/10012009_nmtravolta_news_pg1 .

The topic of extortion/blackmail is often misconstrued. The term is often used metaphorically to refer to usury or to price-gouging, as the term is often used loosely to refer to everyday situations where one person feels indebted against their will, to another, in order to receive an essential service or avoid legal consequences. For example, certain lawsuits, fees for services such as banking, automobile insurance, gasoline prices, and even taxation, have all been labeled “legalized extortion” by people with various social or political beliefs. Our friend Clement Chigbo has taken the time to provide a detailed description of illegal extortion/ blackmail in his recent legal commentary in the Bahamas Journal seen here: http://www.jonesbahamas.com/news/135/ARTICLE/20596/2009-09-29.html .

Despite the popular legal action surrounding the alleged extortion of John Travolta, one may ask, what acts do not constitute extortion/ blackmail? Certainly documents or other varieties of factual information concerning a celebrity or major corporation are provided to an interested party in return for some service, monetary, or any other beneficial act is done all the time, and many individuals have found themselves in similar situations as the Defendants listed in the John Travolta legal action. The question remains, how can a demand for service, payment, or any other act from an individual (or other legal entity) while remaining within the thresholds of Bahamian law?

Determining an Act of Extortion/ Blackmail

You will find the definition of extortion/blackmail in Chigbo’s published article (see reference above). In order to address the issue, we will examine the technical aspect of the definition as provided by the UK legislation. Under S21 of the Theft Act, 1968 an act of extortion/ blackmail is committed if:

…with a view to gain for himself or another or with intent to cause loss to another, he makes any unwarranted demand with menaces; and for this purpose a demand with menace is unwarranted unless the person making it does so in the belief –

(a)   That he has reasonable grounds for making the demand; and

(b)  That the use of the menaces is a proper means of reinforcing the demand.

Thus, determining whether an act may lead to extortion/ blackmail will require proof that:

(a)   A demand with;

(b)  menaces is made.

(c)   That the demand was unwarranted; and

(d)  That at the time of making the demand the individual made it with a view to gain for himself or another or with the intent to cause loss to another.

By using the factors set forth by UK precedent (which is applicable to the laws of The Bahamas), it is possible to one to determine whether they will suffer criminal liability while engaging in a potentially extortive act. By gauging their approach to the execution of their demands, it may be possible to remain within the legal threshold of the law by refraining themselves from committing all of the legal elements listed above during the execution of the act.

The Demand

The demand is a vital part of the act of extortion/ blackmail as this is a means of communicating with all parties. The demand may be in writing, by speech, or by conduct, and it need not be explicit provided that if implicit, the demand is such that “the demeanor of the accused and the circumstances of the case were such that an ordinary reasonable man would understand that a demand… was being made of him…” (R v. Collister and Warhurst, 39 Cr.App.R. 100 at 102, CCA). Furthermore the demand does not have to be communicated to the person of whom it is made (Treacy v. DDP [1971]A.C. 537, HL), as communication to a third (or fourth) party would constitute a demand.

Menaces

The demand must also be made with menaces in order to constitute extortion/ blackmail. The definition of menaces has been in continuous development since 1937, being established that the word “menace” is to be “liberally construed and not as limited to threats of violence but also includes threats of any action detrimental to or unpleasant to the person addressed. It may also include a warning that in certain events, such action is intended” (Thorne v. Motor Trade Association [1937] A.C.797, HL).

Further analysis of the definition of menace led Lord Justice Sellers in 1968 to determine that “…Words or conduct which would not intimidate or influence anyone to respond to the demand would not be menaces…, but by threats and conduct of such a nature and extent that the mind of an ordinary person of normal stability and courage might be influenced or made apprehensive so as to accede unwillingly to the demand would be sufficient (for a jury’s consideration)…” (R v. Clear [1968]1Q.B.670, 52 Cr.App.R.58, CA).

In light of the definition, an objective test is raised which would render a third person to determine (and not necessarily the victim of the extortion/ blackmail) whether an ordinary person of normal stability and courage might be influenced or made apprehensive so as to accede unwillingly to the demand. Thus, in order to remain within the threshold of the law, it is advised that one should remove himself from the possibility of ‘acting with menace’ by threatening or warning a party of any detrimental or unpleasant consequences potentially suffered when making a demand unless such actions are warranted in accordance with the law. These actions include a threat to conduct legal action for an outstanding debt, or repayment of a credit facility, as seen below.

Unwarranted Acts

As mentioned in our discussion of the term extortion/ blackmail, we indicated that  a demand with menace is considered unwarranted unless the person making it does so in the belief that he has reasonable grounds for making the demand, and that the use of the menaces is a proper means of reinforcing the demand. Thus, the essential element of the offence of extortion/ blackmail is that the accused demands with menaces when he believes he is not entitled to the thing demanded or when he believes the use of menaces is improper notwithstanding his genuine claim.

In determining the standard to be applied in relation to the issue of the defendant’s belief that the use of the menaces was a proper means of reinforcing the demand, Bingham J. indicated that “…the word “proper” is plainly a word of wide meaning, certainly wider than ‘lawful’. But the greater includes the less and not act which was not believed to be lawful could be believed to be proper within the meaning (of the subsection)… The test is not what (the defendant) regards as justified, but what he believed to be proper. And where… the threats were to do acts which any sane man knows to be against the laws of every civilized country no jury would hesitate long before dismissing the contention that the defendant genuinely believed the threats to be a proper means of reinforcing even a legitimate demand…”(R v. Harvey, 72 Cr.App.R. 139, CA).

A threat to do some harm disproportionate to the sum or property legally claimed would be strong evidence of the absence of any belief in the propriety of the threat, hence the illegalities associated with demanding payment while threats of making media reports in order to damage the reputation of another. Further evidence of unwarranted demands with menaces can be found the overwhelming disproportionate benefit demanded compared to the actual value of the item or service at hand. In the Travolta case this is found in the allegation that up to 25 million dollars was demanded by the defendants in exchange for a medical document implying that the Travolta family did not wish for their dying son to be taken to the local hospital.

In reviewing this subjective test used to determine whether a demand with menaces is warranted, one can see that the circumstances of each case will bring about varied results. However should an individual feel be in a position to make a demand with menaces, it is important that he first observe the circumstances and determine whether that demand is proper in that particular circumstance. This may include determining whether the amount payment demanded in exchange for an item which may be used to report to the local press is proportionate to the value of the item, or if a demand should be made at all.

In Withholding a Criminal Complaint

Such circumstances may also exist in situations in which criminal acts have been committed against a victim, and the victim makes a demand for payment from the defendant in return for not filing a complaint to the police. As tempting as it looks to seek compensation for injuries sustained during a criminal act, one must be mindful of Section 260 of the Penal Code which indicates that an individual who obtains any sum of money or other reward from any person by threatening, directly or indirectly, to make a complaint before a magistrate for any summary offence when no grounds exist for the complaint, or as an inducement to forbear to make the complaint shall be liable to imprisonment for six months. Therefore it is advised that the victim make complaint be made to the authorities and the victim should pursue a civil action, rather than risking imprisonment for making a demand for payment.

A View to Gain for Himself or Another or with Intent to Cause Loss to Another

The demand must be accompanied by either a view to gain or an intention to cause loss. Although the term ‘gain’ or ‘loss’ is to be legally construed as extending only to money or other property, case law has proven that there is no requirement of economic interest nor should the term ‘gain’ be limited to making a profit. This is illustrated in situations where a person makes a demand for payment of debt owed by another, as it may be construed that the individual does not make a demand to do so with a view to profit, but does so with a view to getting what he has not. Banks, credit card companies and other members of the financial industry tend to operate on this framework, as demand for repayment of loans, mortgages and other credit facilities of their clients are considered to be within the threshold of the law.

Be advised however, that the judicial courts have rendered an act to be gainful in circumstances where in demanding the repayment of a debt, the lender had obtained cash payment as opposed to a right of action in respect of the debt, as it was held that the lender was getting more than he already had (R v. Parkes [1973] Crim.L.R 358, Crown Court (H.H.J Dean Q.C.)).

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.

(Series 2 of 2)

The Bahamas foundation truly is a hybrid corporate medium, and is a great option to a trust in the right situations. It holds applications as an individual vehicle or as a part of an overall structure, and when used fittingly, can be an extremely useful tool.

Foundations have their origins in civil law countries, where the Church was considered to be a “Divine Foundation” and had the legal capacity to manage assets with which it was endowed. These public foundations were charitable organizations created by individuals for the benefit of society as a whole. Foundations were initially conceptualized for communal purposes.

WHAT IS A FOUNDATION?

The Foundations Act 2004 defines a private foundation as an entity established by a registered foundation charter (the “Charter”). It is a legal entity, is resident and domiciled in The Bahamas and is able to sue and be sued in its own name (s. 3).

First, assets are transferred by the founder (the “Founder”) to the Foundation by way of an endowment, they cease to belong to the Founder and do not become the property of any beneficiary until they are distributed. The Foundation manages the assets, investing them or otherwise, in accordance with the objects or purposes specified in the Charter by the Founder (s. 3).

The Foundation can be used as a corporate vehicle for the holding of private assets endowed on the Foundation for the benefit of the individual or classes of persons. The Foundation may, if necessary for the proper management of the assets, buy and sell assets and engage in any other administrative activity not prohibited by law; however, business transactions must be secondary to the main purpose of the Foundation (s. 4).

Establishing a foundation is often a preferred choice for individuals who do not feel comfortable using a third party trustee and wishes to maintain an element of control over the assets transferred to the foundation.

ESTABLISHING A BAHAMIAN FOUNDATION

A Foundation Charter (or alternatively a duly executed will) must exist in order to establish a Foundation in The Bahamas. It is the foundation’s governing document and, as with a trust deed or articles of association of a company, the Foundation Charter sets out the parameters within which the foundation must be managed and governed.

The Foundation Charter deals with founder retained powers; appointment and removal of the foundation’s officer(s), foundation council members, protector(s), beneficiaries; investment powers; dispositive provisions and provisions regarding the amendment and revocation of the charter. Such provisions and other legislative guidelines to the construction of the Foundation Charter are found in section 6 of the Foundations Act which includes provisions such as:

• the name of the foundation with the word foundation” in English or in a foreign language  (at the discretion of the Registrar) as the last word of the name; the name of the foundation is restricted by the Act; it cannot include certain terms such as “limited”;
• The name and address of the Founder or, the number and place of registration of the legal person and the address in The Bahamas for service if the Founder is a legal person;

• the endowment of the assets to be the initial assets of the foundation upon registration and a statement of those assets;
• a statement as to whether the foundation was established for an indefinite period or for a definite period;
• the name and address in The Bahamas of the Secretary to the foundation (the “Secretary”) which must also serve as the address of the registered of the foundation

• a statement that the foundation’s total assets are not less than US$10,000.00 or the equivalent in another currency; and
• the signature of the founder or the signature of the authorized person(s) (in case of a legal entity) in the presence of a notary public or the Secretary.

The Foundations Act also creates the option for the Foundation Charter to be supplemented by the addition of foundation articles which can be used for the regulation of any governing body of the foundation. In addition, the foundation articles can provide for the identification of initial, future beneficiaries of a foundation, or remaining beneficiaries upon a winding up of the foundation. More importantly the foundation articles may address the distribution of assets made or to be made by governing bodies of the foundation.

REGISTRATION OF A BAHAMIAN FOUNDATION

Like the incorporation of a Bahamian company, a Bahamian foundation requires the reservation of the foundation name with the Registrar General prior to the submission of the required documentation. Upon reservation the Registrar will confirm that the Foundation name is valid for use and has been reserved for a period of 90 days.

Required Documents for Submission

An application for registration of the foundation need not to include the Foundation Charter and/ or foundation articles, however the application should include a statement signed by the Secretary of the foundation or any licensed financial service provider representing the Foundation which contains extracts from the charter of the foundation as follows:

• Name of the foundation
• Date of Charter and Articles (if any)
• Summary of the foundation’s purposes
• Name and address in the Bahamas of the foundation for service of documents
• Name and address of the Secretary
• Name and address of the Foundation Council
• Address of registered office
• Value of initial assets, and
• Period for which the foundation will be active
• A list of the name(s) and address(es) of the Officer(s) of the foundation

In submitting the statement, the application for registration should also include a statutory declaration certifying to the Registrar General’s Office that:

• The Foundation Charter contains a statement that the value of the assets of the foundation may not be less than $10,000.00 or the equivalent in any other currency

• All of the requirements of the Foundations Act in respect of the registration of the foundation have been complied with The Foundation charter or articles may, but need not, be filed with the Registrar General’s Office to complete the Registration process.

• Upon approval of the documentation required by the Registrar, a Certificate of Registration will then be issued specifying the name and number of the foundation, and herein recognized as a legal entity of The Bahamas.

GOVERNANCE OF A BAHAMIAN FOUNDATION

As with a trust or company, the Bahamian foundation has a slate of key positions that can, or indeed must be filled. The main players are:

The Founder(s)

As mentioned earlier in the series the Founder plays an important part in the establishment of a foundation as he is responsible for the transfer of his assets to the legal ownership of the foundation by way of endowment or will. Prior to Registration, the Founder(s) must appoint at least one person (natural or legal) to be an officer of the foundation. In establishing the foundation the Founder may reserve powers as provided by the foundation charter, and he is also able to be a part of the foundation council, and as a foundation nominee. The Founder is also able to determine the length of time in which the foundation will exist.

The Foundation Council

The existence of a Foundation Council will depend on whether the foundation charter provides for one to be established. It may consist of two or more natural persons, a legal person and one or more natural persons, or a legal person by itself. The Foundation Officers are required to follow the instructions of the Council. The foundation council must ensure that the Foundation complies with the provisions of the Foundation Charter, the foundation articles and the all Bahamian foundation legislation. It also has the power to access the books, records and accounts of the foundation and has further right to:

• be informed of all meetings of the Officers;
• attend and be heard but not vote at meetings of the Officers;
• be included in the circulation of the foundation’s business documents when                    they are circulated to the Officers;
• be informed of any delegation of powers to Officers;
• appoint financial auditor(s) for the foundation accounting records.

The Foundation Officers

The Foundation Officers, in the absence of the Council, are the governing body of the foundation, of which their duties are primarily administrative rather than fiduciary in nature. An Officer of the Foundation may be a legal person. The Act lists those persons who cannot be Officers, such as an undischarged bankrupt. Furthermore Foundation Officers and Auditors of the foundation (and related parties) are not eligible to be appointed as members of the Foundation Council.

Officers are required to exercise reasonable care and skill in the conduct of the affairs of the foundation, including exercising due care and skill in the management and investment of the foundation assets, and must act in accordance with the Foundation Charter and Articles. No officer of the foundation shall be personally responsible for any liability of the foundation unless the liability is incurred as a result of his own gross negligence, willful default or misconduct, fraud or dishonesty. A court also has discretion to relieve an officer from liability.

The Secretary

A Secretary must be appointed in respect of the foundation and must be either a licensee under the Financial and Corporate Service Providers Act or a trust company under the Banks and Trust Companies Regulation Act. If a person ceases to be Secretary, any liability incurred by him while acting as Secretary is still enforceable against him by the foundation. Like a corporate secretary of a company the foundation secretary has a traditionally known variety of functions pertaining to the governance of the foundation which includes legislation compliance, ensuring that all fees are paid up to date, and communicating with the Foundation Council/ Protector/ Protectorate Committee on meetings held by the Foundation Officers.

The Protector/ Protectorate Committee

Should its existence be provided for by the foundation charter The Protector/ Protectorate Committee can play an active or passive role in the governance of the foundation, such as the protector’s ability to appoint and remove members of the Foundation Council. Governance powers as delegated by the Foundation Charter may provide for the necessity of the Protector/ Protectorate Committee’s consent for decisions made by the Foundation Council on behalf of the foundation itself.

The Beneficiary

Generally speaking a beneficiary is a natural person or legal entity which receives benefits such as assets, payments, etc. from a benefactor, in this case the foundation. A beneficiary who has an interest in some or all of the Foundation’s assets must be notified in writing by the Foundation Officer of his interest and is entitled to receive information on request from the Foundation regarding the fulfillment of the objects of the Foundation and to inspect and copy the constitutional documents of the Foundation. Audit report and any minutes of any meetings of the officers of the Foundation Council or any other supervisory body are entitled to be inspected by the beneficiary.

Akin to beneficiaries holding vested interest in a trust, should the Foundation not supply the requested information or allow inspection of the documents by the beneficiary, the beneficiary may apply to the court for an order of compliance.

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.

Two weeks ago a snugly built church on the Charles W. Saunders Highway was bulldozed by Arawak Homes Ltd. after receiving a court ruling confirming ownership of the property to the well known development company. In no time the building was demolished, the remains of which have become a focal point of frustration amongst the religious factions and its followers in New Providence. While some church leaders call the church demolition an event that marked the “darkest day” in the history of the church in The Bahamas http://www.tribune242.com/09172009_pastorsofprayer_features_pg26, others fear that at more churches in our nation’s capital face possible demolition for occupying property that they do not legally own http://www.jonesbahamas.com/news/45/ARTICLE/20527/2009-09-17.html, and now the prominent Bahamas Christian Council have now called for an end to land manipulation indicating that “every possible effort must be made to avoid any re-occurrence of this most unfortunate event” http://www.jonesbahamas.com/news/45/ARTICLE/20508/2009-09-15.html.

Although the event is as common as a blue moon, calling the church demolition as the darkest day of the history of the church holds embellishing overtones; the real issue arising from this unfortunate occurrence involves the means in which fraudulent activities within real estate acquisitions can be eliminated from our island once and for all. As the saying goes, “Piracy may have expelled from The Bahamas, but the pirates never left…” Certainly the concept of land acquisition and ownership in the Bahamas is mentioned hand in hand with deception.

The event has highlighted the urgent need for the introduction of land registration procedures which would assist in confirming the legal ownership of property in the Bahamas. It not only brings forth the issue concerning liability within our legal profession, but also the conduct of legal professional during the dispute resolution process. On the surface it seems that attempts at negotiating the settlement of legal ownership of the property had broken down, and therefore the negotiation process should be reviewed. In similar cases, the amount pertaining to the settlement of the land ownership disputes would equate to the value of the land prior to the construction of the building structure, but such negotiations would not put a community based building structure at risk of being demolished.

The regulations proposed within the country’s arbitration bill may greatly assist the settlement of disputes of this nature. We propose that the planned arbitration legislation should also be exercised hand in hand with country’s real estate disputes and quieting title actions. If there is one aggravation that the citizens of our precious islands suffer from, it is the wearisome state of our judicial system. Thus it is our hope that the arbitration legislation will hold dynamic characteristics which will bring back the public confidence within our judiciary.

While we wait for our prayers of legislative changes to manifest and the church’s pastor weighs his legal options http://www.tribune242.com/searchresults/09162009_canaanchurch_news_pg1 (we believe that any further action by him will only result in monies wasted), there are ways of protecting one of the most important investments in your lifetime. This calls for the property title search on the property for sale and a cause list search on the current owner of the property.

In briefly discussing both search procedures, a property title search is used to determine an unbroken chain of ownership of land for the advised length of time of 30 years.  A property search can also determine easements, covenants, and other hereditaments which may be present on the property including possible judgment and security liens brought on by banks and other lending facilities. A cause list search will determine whether the former or current owners of the property are subject to any judgments or orders by the judicial courts of The Bahamas. In case of the property’s previous owners, judgments and/or court orders may affect the property should the judgment/ court order be imposed during the time the owner had legal possession of the property. Should the property be sold while under a court judgment/ order it may render the property unmarketable, and should deter any legal professional from advising on its purchase. In addition, uncertainties found during the title search and cause list search are often remedied by discovery of a recorded affidavit or a court document filed within the Supreme Court registry.

Other ways of avoiding disasters with property transactions include the following:

Property sold at a significantly decreased value

Particularly during these times of a troubled economy, land owners may reduce their asking price for property. On the other hand dishonest individuals are known to claim to own the property and request a ‘quick sale’ on the property without allowing you to undertake the necessary investigations to confirm the ownership of the property. As the current law does not make it mandatory for vendors to produce evidence of proper title, it is absolutely necessary for the purchaser to conduct a title and cause list search in order to confirm that the property fit for sale, in order to avoid these problems.

Suspicious deeds/ documents for the property

Hand written conveyance deeds, one page sales agreements, production of power of attorney documents and other non-traditional documents claiming to hand over possession of property are signs of irregular land transactions and should be approached with caution. At this point the potential purchaser should seek the involvement of an attorney before taking any further steps within the transaction.

Property known to be inherited by its current/ previous owner

It is a common occurrence for property to be possessed through inheritance; however the beneficiary must undertake the necessary procedures in order to legally possess the property such as probate actions and/ or the administration of the estate of the previous owner. Should there be no evidence that the alleged land owner has not undergone these procedures, we would advise that the purchaser refrain from taking any further steps in the transaction without the advice of an attorney.

Property sold within areas known for having unmarketable title

Unfortunately the subdivision in which the former church was located held a notorious reputation as a problematic area of unmarketable parcels of land. As other subdivisions holding the same reputation exists, it is advised that such areas are approached with caution, and it is absolutely important that a detailed property title search is conducted in order to assist your decision. In normal cases, an attorney/ search clerk will advise the potential purchaser of the repute of the subdivision and depending on their findings, will provide a detailed explanation of their discovery.

Property located in Subdivisions in which no approval was   granted

The laws of the Bahamas Government indicate the requirement for approval prior to the establishment of subdivisions, and therefore it is important that the purchaser is made aware of the grant prior to committing to the purchase of any lot of land within these areas.

Property sold by individuals with financial difficulties

If it is known that the current vendor of the property has struck bad luck with his creditors, it is certain that they will seek court judgments on the vendor, and therefore placing a lien on his assets, including legally owned property in his possession. A cause list will determine whether any legal action has been taken against the vendor, and will therefore assist a purchaser’s judgment in pursuing the purchase of the property for sale.

Property known to be adversely possessed

Purchasers should also be aware of property which has claimed to be ‘squatted on’ or adversely possessed land. In these cases a purchaser should look out for a certificate of title from the Supreme Court, as adversely possessed property are subject to quieting title actions by the vendor. A grant of a certificate of title will serve as proof that the property is fit for sale.

Property located in close proximity of crown land/ public  industrial areas

Be aware of these parcels of land as crown land and public industrial areas are owned by the Bahamas government and are often granted long term leases to an applicant. In this case it is important to investigate the title of the property prior to committing to the purchase.

Property known to be/ in close proximity to generation property

Frequently applied to large acreages of land and beach front properties in the family island, such property is reserved by the Bahamas government for family whose ancestors originate from those particular areas. Oftentimes it is difficult or impossible to show evidence that the property is fit for sale, and in most cases, vendors will often give an account of the family history in order to sanctify his rightful ownership to the property. As advised in the paragraphs above, seek the assistance of a commercial attorney, particularly one familiar with the area in which the property is located and request a title search. Such folktales and family history do not constitute proof of ownership and should be approached with caution.

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.