Residents with non-Bermudian spouses who jointly inherit a second property will have three years in which to sell the spouse's share of the land, under a new Act.

Under the Bermuda Immigration and Protection Amendment Act 2007 — which aims to protect the Island's small land mass from foreign ownership — Permanent Resident Certificate holders also have to comply with strict guidelines on property.

As from June 22, 2007, they are restricted to buying licensed land or condominiums in designated developments from a developer.

The Bermuda Immigration and Protection Amendment Act 2007 restricts Bermudians married to foreigners to one licence if in a second purchase, the spouse is to contribute or benefit from rental income or occupation of that property.

The exception to the rule is 'hardship' cases and foreign spouses granted 'Bermudian' status after ten years of marriage.

For the past 30 years, it has been Government policy to issue only one property licence to non-Bermudian husbands and wives, but Ministers say the new Act is needed to combat loopholes and 'fronting' — a practice whereby foreigners have obtained property illegally using Bermudians as a 'front'.

Government claims 37 percent of residential land in Bermuda is already owned by non-Bermudians under licence. However, the Act has been criticised as "discriminatory" by members of the public, some of whom claim it breaches the Human Rights Act.

Government has now clarified various aspects of the Act, as to how it will impact on mixed status couples and Permanent Resident Certificate holders.

It has also issued a reminder notice to non-Bermudian spouses to get their licences for property purchases before June 22 validated by the Registrar-General.

There is no fee and people simply have to produce the licence and property deeds at the Registry-General. The licence will be stamped, copied and then handed back.

If a property licence is no longer required, the Registrar-General must also be informed.

Under the Act, non-Bermudians have three years — until June 22, 2010, to register land ownership. Failure to do so will result in the owner being unable to sell it to another non-Bermudian.

Chief Immigration Officer Dr. Martin Brewer said: "It means it can only be transferred to Bermudians. Non-Bermudians are prohibited from buying land that is not licensed land."

The Government notice states: "The purpose of this validation is to ensure that the Department of Immigration has a correct count of the acreage of all land in Bermuda held by non-Bermudians.

"It is safe to say that over the past 100 years not all transactions between Bermudians and non-Bermudians have been correctly reported to the Registrar-General."

Dr. Brewer said: "We know that between 1907, when the Aliens Act 1907 was enacted, and the enactment of the Aliens Act 1926, no account was kept of land transferring from non-Bermudians back to Bermudians.

"We also know that records kept before about 1968 are not sufficiently detailed to identify parcels of land still held under licence.

"The numbers involved are unknown, hence the need for validation of licences."

He added: "Mixed-status couples were getting around the policy that restricted non-Bermudians to one property under licence by keeping the non-Bermudian off the deeds of conveyance for additional properties."

Under the Bermuda Immigration and Protection Act 1956, each parish has a ceiling on land owned by non-Bermudians. This is 400 acres under licence — a third of the land in the parish, and 2,000 acres in Bermuda in total.

The Royal Gazette asked Government whether the 400-acre limit was not outdated now, given the nature of modern immigration, the global economy and that the 1956 Act is more than half a century old.

Dr. Brewer said: "Far from being outdated it is critical if land is to remain available for Bermudian ownership. Part VI of the 1956 Act is all about protecting land in Bermuda for Bermudians.

"During the (three-year) moratorium, all parcels of land owned by non-Bermudians under licence will be identified.

"If the acreage limits are exceeded then no more unlicensed land can be sold to non-Bermudians until sufficient land comes back into Bermudian hands to bring the foreign-owned acreage below the limits."

Dr. Brewer also clarified how the Immigration and Protection Amendment Act 2007 will impact on non-Bermudians.

RG: If a mixed status couple inherit a second property will they then have to sell it off?

Dr. Brewer: "If they both inherit the property jointly they have three years in which to dispose of the non-Bermudian's interest in the land. If the Bermudian inherits the property as sole owner then there is no need to sell.

"The Bermudian could buy out the non-Bermudian spouse's equity in the land; but how likely is it that a Bermudian and the non-Bermudian spouse will inherit jointly?

"The Bermudian's family are almost certainly going to leave land in Bermuda to the Bermudian in the Bermudian's sole name.

"If the non-Bermudian spouse is left land in Bermuda in a will, and the non-Bermudian already has a licence to hold other land in Bermuda, then the non-Bermudian has three years in which to dispose of the inherited land."

RG: If a divorced Bermudian marries a non-Bermudian — would he or she then have to dispose of his or her other properties from the first marriage?

"It is the non-Bermudian who is restricted to one parcel of land under licence, not the Bermudian."

RG: If a mixed status couple wanted to rent out a portion of their property eg. as a studio flat — would this be allowed?

"The conditions on a licence which is held by the non-Bermudian spouse of a Bermudian only comes into effect if the non-Bermudian becomes sole owner of the property.

"As long as the couple remain married to each other and own the property jointly, then the conditions on the licence have no effect and the couple is therefore free to rent out a portion of their property."

RG: Exactly what changes does the June 2007 Act bring in for Permanent Resident Certificate (PRC) holders wanting to own property?

Dr. Brewer: "The previous policy of permitting Permanent Residents to acquire condominium units anywhere in Bermuda, other than those sponsored by Government, was not taken forward into the new legislation. Permanent Residents, like other non-Bermudians, are restricted to acquiring licensed land or condominiums in designated developments directly from the developer.

"The privilege under the old policy was that a Permanent Resident could buy a house with an ARV (Annual Rental Value) between $63,600 and $153,000 from anyone, including Bermudians.

"Permanent Residents, like all non-Bermudians, have always been restricted to holding or acquiring one parcel of land under licence. This rule has not changed."

He added the $63,600 ARV minimum, over which PRC holders can purchase houses, remains unchanged, as does the $153,000 ARV level over which non-Bermudians can buy houses. There is no limit for condominiums.

RG: Why has Government changed some conditions for PRC holders?

Dr. Brewer: "Given the introduction of new classes of restricted persons by the 2007 Act, special concessions for Permanent Residents could no longer be justified."

Anyone with any questions on non-Bermudian property ownership is invited to email Dr. Brewer at: mbrewer@gov.bm.

Guidance notes on the 2007 Act are available under 'Topics — Land Acquisitions' at: www.immigration.gov.bm.