Fractional Ownership News

Environmental group questions law on Bermudan fractional real estate

Fractional ownership of property by overseas residents is causing controversy in Bermuda, reports the Royal Gazette.

Environmental pressure group The Bermuda Environmental Sustainability Taskforce says the island's government is exhibiting double standards when it comes to foreigners owning Bermudian fractional property.
Chairman Stuart Hayward said that while the government was requiring some mixed-status couples, where one person is Bermudian and the other is a foreigner, to apply for a licence to own a property on the island it was allowing foreigners to purchase fractional and leaseback tourism units.

"We feel compelled to highlight the apparent contradiction between what the government says, as stated by government ministers, and what is actually practised, as in policies for foreign ownership of fractional housing units. While the fundamentally discriminatory aspect of the above law is outside our mandate, BEST finds that government's rationale for this Amendment Act is contradicted by policies put forward by government in the Bermuda Plan 2008 that both enables and sanctions taking land out of Bermudians' hands," he said.

"A careful reading of the Bermuda Plan 2008 reveals that the Development Applications Board can approve commercial and tourism development on conservation-land zoned for Recreation, as well as on land zoned Residential 1, the most densely populated residential land in Bermuda. What many Bermudians may not realise is that tourism development includes fractional ownership units, a type of condominium that allows ownership-in-perpetuity by non-Bermudians who do not reside full-time in Bermuda, that is, ownership that need never revert to Bermudian hands. This appears to present a contradiction between what the government is saying and what it is doing as far as retaining Bermuda land in Bermudian hands,” he added.

Mixed-status couples have until June 22 to comply with the law — which requires some Bermudians married or living with a foreign partner to get a $1,375 land licence. The penalties for those in breach of the law are a jail term of up to five years and/or a fine of up to $1 million.

Licences are needed where foreigners provide financial assistance for the acquisition of property. Shadow attorney general Trevor Moniz has said government should extend the deadline while others have said government should consider changing the law altogether.

www.royalgazette.com

27/04/10

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