Bermudians married or living with foreigners have two months to get a licence for homes they own and which their partners financially contribute to or benefit from.

Locals must obtain a licence for such residential properties before June 22 or face prosecution under the Bermuda Immigration and Protection Amendment Act 2007. Those who fail to comply with the legislation — designed to limit the number of non-Bermudians who own land here — could end up with a five-year jail term and/or a fine of up to $1 million.

Banks, including HSBC Bermuda and Butterfield, are sending letters to mortgage customers notifying them of the legal requirement. The licence costs $1,375 and is needed for first homes, as well as additional properties obtained before June 22, 2007. Since that date, the legislation has prevented mixed-status couples from having more than one property.

Even where a home is solely in the Bermudian partner's name, a licence is required if their partner gives financial assistance or benefits from the property.

An HSBC customer who received a letter this week told The Royal Gazette it took her by surprise and that she was still unclear as to whether she needed the licence.

The woman, who asked not to be named, is married to an expatriate but he is not a co-owner of her condo, though he lives there and shares the bills.

HSBC's letter states that a foreign spouse who pays for household bills, such as electricity, cable or water, could be deemed to be giving financial assistance.

But chief immigration officer Rozy Azhar told this newspaper yesterday: "Simply agreeing to split the household expenses, as occurs in most partnerships, does not necessarily, by itself, constitute providing financial assistance."

The HSBC customer said: "Basically, I'm annoyed. The law was never made clear to me. I was never directly informed by the bank, or by Government, prior to the letter, and I've yet to be directly told what I must do to be in compliance.

"Aside from that, the notion of having to purchase a licence because my husband isn't Bermudian — despite the fact that the house is only in my name and won't necessarily be left to him should I predecease him — is ludicrous."

Ms Azhar said a letter about the licences was sent with land tax bills to homeowners in 2008.

An HSBC Bermuda spokeswoman said a standard letter was being sent to all mortgage holders reminding them of their obligations under the Act.

"These obligations include obtaining a licence in the event that they receive financial assistance relating to the mortgaged land from a person that does not possess Bermudian status," she said.

"The Bermuda Immigration and Protection Amendment Act 2007 does not differentiate between first, second or subsequent homeowners in this respect."

A Butterfield spokesman said: "Per the Bermuda Immigration and Protection Act 2007, Butterfield are proactively informing our valued clients about this new legal requirement."

Ms Azhar said: "The Department of Immigration did not advise banks to send out the letter, but we commend them for being proactive in sending letters to their customers, particularly in anticipation of the deadline of June 22, 2010, when the deferral period during which persons who require licences must apply for them without penalty, comes to an end."

Former Immigration Minister Derrick Burgess announced in July 2007 that all foreigners who held an interest in land here "including as beneficiary of a constructive land trust" would need a licence before June 22 this year.

When a non-Bermudian contributes towards mortgage payments or benefits from rent received for a property, a constructive trust is created with their Bermudian partner.

Ms Azhar said: "If a non-Bermudian spouse or partner provides financial assistance to their Bermudian spouse/ partner to purchase a property, then the non-Bermudian may be entitled to an equitable interest in the property.

"The Bermudian must then apply for a licence as a constructive trustee for the non-Bermudian's equitable interest."

She said the acid test as to whether financial assistance was being given was if any of the following applied:

* Both persons were signatories on the loan application;

* The relevant bank took the income and assets of both parties into consideration when deciding whether to grant a mortgage or loan; or

* Both incomes are required to maintain the home.

• Anyone needing to clarify whether they need a licence should contact Ms Azhar on 295-5151 x 1443 or mazhar@gov.bm or Marita Grimes on 295-5151 x 1393 or magrimes@gov.bm.