While government ministers concede that foreign real estate agents are infringing on what the law says is exclusively Bahamian territory, both the current and former ministers of Financial Services and Investments have said the Bahamas Real Estate Association (BREA) must also play a role in addressing the matter.
Sitting minister Vincent Peet told the Journal that the BREA and the government clearly have an obligation to address this problem.
“The government has to lead, but the association also has an obligation to help police the market to ensure that if they find anybody who is not a Bahamian involved in [selling Bahamian real estate] to report them because they can be dealt with according to law,” the minister said.
“There’s no legal authority for any foreigner to sell land in The Bahamas: that’s controlled by the regulations. And so, clearly, the government will do its own policing, but obviously the government is not able to police every incident.”
BREA past president Pat Strachan has insisted that the government is responsible for a state of affairs in which local real estate agents are being robbed of potential six figure commissions during a real estate boom.
“[The government] comes up with these flimsy excuses that they can’t stop people from selling property on the Internet. That’s a bunch of hogwash,” Mr. Strachan told the Journal.
Some observers have noted a very clear loophole in the Real Estate (Brokers and Salesmen) Act 1995, which is the law of the land regarding real estate sales.
It is believed that those who drafted the act could not have imagined that Internet sales would become so prevalent as they are today, because there is nothing in the act that prevents or even addresses Internet sales, or prevents anyone from not using a broker if they wish to sell a home or land.
If an owner wanted to simply put her home for sale online, and bypass the local realtors completely, the law contains no provisions preventing the owner from doing exactly that.
The BREA had undertaken a benchmark study of how other jurisdictions dealt with the problem last year. This study was supposed to have aided then Minister of Financial Services and Investments Allyson Maynard-Gibson in having amendments to the Act drafted to protect the exclusive rights of Bahamian realtors.
Mrs. Maynard-Gibson, now attorney general, confirmed that this study had yet to be delivered.
“When I was Minister of Financial Services, the (Bahamas) Real Estate Association – then headed by (Pat) Strachan – indicated to me that they would be responsible for benchmarking other jurisdictions to examine what in fact happens in other jurisdictions in these circumstances,” Mrs. Maynard-Gibson said.
She insisted that the government is “very clearly” committed to ensuring that when real estate agents are used that Bahamians should participate in the transaction, either by being a sole broker, or by co-brokering.”
“I can say that I have not yet heard from Mr. Strachan or the Real Estate Association, and I will also say that if they are still minded to work together with the government as partners – as did persons in the financial services sectorï¾…in a true public/private sector partnership – that we can get this matter addressed very easily,” Mrs. Maynard-Gibson said.
“So I would welcome the Real Estate Association to come to the table as they said they would, and participate with us in getting the amendments that they are asking for done, having benchmarked other jurisdictions.”
Mr. Strachan acknowledged that Mrs. Maynard-Gibson was correct in her assessment of the situation.
“But let me just say it’s not a simple process,” he added. “Our attorneys are working on it, and Mrs. Maynard-Gibson should have it within a month.”
Mr. Strachan explained that the BREA is “in the process” of completing that study, and would send it on to the attorney general in “no more than a month.”
Minister Peet, meanwhile, encouraged BREA members to report violators, so that when those matters come before the National Economic Council or the Investment Board those particular sales will not be approved.
Attorney General Maynard-Gibson pointed out that punishment for violating the 1995 Act is a matter for the BREA to address. She said the act points out the way that foreigners encroaching on what is supposed to be exclusively Bahamian territory should be dealt with.
“And the way they are dealt with is by the complaint being made to the Real Estate Association, investigated by the Real Estate Association and, if necessary, disciplinary action being taken by the Real Estate Association – so the ball is entirely in the court of the Real Estate Association,” she said.
Mrs. Maynard-Gibson said that it would be a very rare instance in which this encroachment would be a criminal matter – the act empowers the association to discipline the developers who, having been granted a developer’s license by the association, are required to follow the law.
Mr. Strachan said the BREA is working with the Florida Real Estate Commission (FREC) to address the illegal activities of Florida real estate agents selling Bahamian property.
“We are collecting names of foreign agents who have been selling Bahamian real estate illegally and submitting (those names) to the Florida Real Estate Commission,” Mr. Strachan said.
“So you see, we are not only hoping that this government, which has been dragging its feet, does what needs to be done. We have been working on the other side also.”
Mr. Strachan said that the FREC is disciplining those agents whose names come up through the BREA reports.
The government is not the only stakeholder Mr. Strachan holds culpable for the loss in potential revenue.
“In order for real property to be transferred it has to be done by a Bahamian lawyer. So the lawyers know what is going on, but they don’t care because they are getting their fees anyway,” he claimed.
Mr. Strachan explained that the amendments are aimed at addressing the sale of Bahamian land where an agent is used, and that agent is a foreigner.
“What we are hoping is [that] once we have completed these proposed amendments, the government will amend the Real Estate Brokers and Salesmen Act to include language – and [our lawyers] are in the process of putting the language together – that will say that the foreign agent, with his prospect, has to deal with a local agent.”
The BREA gives developers what is called a “developer’s license.” This license is the same, it is said, as if one owns a subdivision – the owner of that subdivision simply divides the lots and sells them.
Once the government has approved that developer’s project, and he has a developer’s license from the BREA, the developer has permission – and legal authority – to sell his land.
By: Quincy Parker, The Bahama Journal
