A $1.5 million waterfront property illegally purchased by expatriates is now owned by the Bermuda Housing Corporation.National Security Minister David Burch announced the home, Laughing Waters, would be rented back to the expatriates who once owned and occupied the home.The family will pay $10,000 a month for the next five years for the property, located on Middle Road, Southampton near Five Star Island.Senator Burch said the Government had acquired the house at no cost, and the rental income would be used to address broader housing needs.The expatriates acquired the property through the illegal practice of fronting a scheme where a non-Bermudian gains an unlawful interest in Bermuda land by using a local “front”.Sen Burch yesterday would not name the expatriates who had purchased the property nor the Bermudian who served as their front in the sale.The Royal Gazette went to the Southampton home yesterday. No one was home at the time and several of the shutters were closed.In 2007 the Government amended aspects of the Immigration and Protection Act so that expatriates required a licence for any property they owned.Those who are not compliant with the December 31 licensing deadline face a five-year jail term and/or a fine of up to $1 million.Yesterday Sen Burch said: “The conveyance of this property to the Bermuda Housing Corporation has been facilitated through a negotiated short term lease to its former owner and in this unique case the yield to the people is an additional property through which this Government’s housing policy can be furthered. The rental proceeds will be used to support BHC’s overall housing plan.“Is it unconventional? Yes. Is it unorthodox? For sure. Is it worth it? Absolutely.“In simple terms the Bermudian people are the new owners of a $1.5 million dollar property at no cost to the Bermuda taxpayer a perfect gift for Christmas.”He said Chief Immigration Officer Rozy Ahar, who is tasked with pursuing this issue, first flagged the Laughing Waters case up in 2007.“She wrote to the trustees of the Laughing Waters house and said ‘I believe this is a case where you have acquired land for restricted persons unlawfully, so provide me with the documentation or off to court we go’,” Sen Burch said. “I am not aware of all the details in this case but clearly we got to the point where everybody agreed ‘ok, you got me’.”He added that the settlement was better than the alternative.“I know a smart a** would say ‘why would you enter into an agreement with these people who broke the law?’ but in this climate high-end properties are going begging all around the place.“So I say yes. This is a settlement. I am not going to prosecute you. You are not going to jail and you are not going to be involved in a lengthy legal battle with the Bermuda Government you cannot possibly win.”Sen Burch said he hoped yesterday’s announcement would spur others to consider similar arrangements or prepare for litigation.He said there were approximately 20 cases where the Government believed fronting had occurred one is ready to go to court in the New Year, while two others are close to that point.“What I am hoping will come out of today’s exchange, because there is a whole lot of other people who aren’t lawful and they have got ten days to get legal, I am hoping we could see more of this. I suspect you will see January 4 us going to court for others.”With ten days left before the licensing deadline, a National Security spokeswoman said 100 licence applications had been processed since December with an additional 70 still “in various stages of processing”.She added that it was likely half of the 70 would be concluded by the end of the year.