Lawyers grapple with property licence rules for mixed-status couples
Lawyers are struggling to advise clients about legislation which requires some Bermudians married or living with foreigners to get a licence for homes they own.
Bermuda Bar Council member Harry Kessaram told The Royal Gazette "various problems" had arisen with the Bermuda Immigration and Protection Amendment Act since it was passed three years ago.
He said the issues for the most part affected "bona fide Bermudian families, one or more of whose number are non-Bermudian".
Those who need a $1,375 licence only have until June 22 to apply or face a jail term and/or a $1 million fine, as reported by The Royal Gazette last week. Many readers have told us they are confused by the law and unsure whether it applies to them.
Attorneys are in the same boat, according to Mr. Kessaram, who specialises in property law, estates and trusts.
"Lawyers dealing with the Act are having difficulties providing clear advice to their clients, especially in non-Bermudian spousal cases," he said.
The legislation — designed to restrict the amount of land owned by foreigners — stipulates that a licence is required if a non-Bermudian provides financial assistance for the acquisition of land or property.
HSBC Bermuda has been telling its mortgage customers that a licence may be needed if a foreign partner pays household bills. But chief immigration officer Rozy Azhar said last week that wasn't the case.
She said financial assistance meant if any of the following applied: both persons were signatories on a loan application for the property; the bank took the income and assets of both parties into consideration when deciding to grant a mortgage or loan; or both incomes were required to maintain the home.
The Act also refers to "any other direct or indirect provision of value to or for the benefit of another person, group of persons or entity".
Mr. Kessaram said: "That expression is so all encompassing and the penalties for breaching the Act so severe, that lawyers are erring on the side of caution and, if they are in the slightest doubt about the provisions of the Act (as they often are), they are advising clients to apply for a licence.
"This in turn is leading to a logjam of applications at [the Department of] Immigration and some lawyers are experiencing inordinate delays in getting their licence applications approved."
Ms Azhar said yesterday the turnaround time for licence applications was about a month.
But she added: "Unfortunately, over 90 percent of the applications for all types of land licences currently received from lawyers are incomplete and the 'inordinate delays' occur when we have to follow up constantly with requests for additional information.
"Needless to say, even the complete applications will be delayed because of the additional work required to follow up with lawyers, some of whom have been submitting applications for land licences for years.
"As a result, effective immediately, we will be returning all applications that are not submitted completely and refunding the application fee.
"We will also inform their clients that the application has been returned to the relevant lawyer. We will be informing the Bar Association of the change in the process."
Ms Azhar said a similar policy already in place for work permits had shortened processing times.
Mr. Kessaram claimed the Bermuda Immigration and Protection Amendment Act confounded the rule of law as it was not clear and certain in its intent and application and sent out the wrong signal about the Island as a jurisdiction.
The Cox Hallett Wilkinson consultant revealed that a committee of conveyancing lawyers had been formed to look at problems with the Act and was willing to work with Government to make it more workable.
"The legal community was appreciative of the need for the Act but at the same time had concerns when it came into effect," said Mr. Kessaram,
"Those concerns have grown now that more flaws with the practical application of the Act have come to light and are still coming to light."
An HSBC Bermuda spokeswoman said the bank sent out a general letter warning mortgage clients of their obligations under the law because of the "unique nature of each of our individual customer's situations".
"If a Bermudian customer is receiving a substantial amount of financial assistance each month from a non-Bermudian to pay utility bills so that the Bermudian borrower can pay his mortgage, then a licence could be required under the Act," she said.
"In the circumstances, HSBC Bermuda acted responsibly and in our customers' best interests, in accordance with the provisions of the Act."
l Minister brushes off complaints about restricting second home ownership for some couples – Page 8