Realtors are suggesting that current real estate legislation leave them vulnerable to outside competition resulting in the loss of millions of dollars in potential business.
President of The Bahamas Real Estate Association (BREA), Pat Strachan, is calling for The Real Estate (Brokers and Salesman) Act, 1995 to be amended to include more opportunities for local real estate agents.
“I believe the Act is filled with many loopholes,” said Mr Strachan.
The current law allows foreign owners of property developments in The Bahamas to sell real estate on their terms. Additionally, they are allowed to pay commissions on sales to overseas persons and entities.
“What are we? Second class citizens in our own country?” Mr Strachan asked.
Because of the perceived loopholes, he felt that real estate agents were being robbed out of their right to sell Bahamian property and said this resulted in the loss of potential earnings of millions of dollars.
According to Mr Strachan, BREA is in the process of preparing proposed amendments to the current real estate act. The association is hoping the government will respond favourably by first passing a bill that will eventually enact the amendments.
A leading real estate attorney said new legislation sometimes missed key elements, and admitted that real estate agents are at a disadvantage where there is room for various interpretations of some sections of the law.
“I think most laws you try to anticipate as much as possible and draft it as tightly as possible, but it’s inevitable that you don’t catch everything and there may be ways to interpret different things,” the attorney said.
One of the main amendments BREA would like to see incorporated into the law would allow local agents to be included in the sale of property developments such as time-shares and condos owned by foreigners.
Our attorney source agreed. “We need to preserve opportunities for Bahamians and Bahamian realtors. It cannot be a closed shop,” he said.
Mr Strachan said the Minister of Financial Services and Investments, Allyson Maynard-Gibson, was receptive to BREA’s move to have the act amended. “She has been very supportive and understands our position. She has put the ball in our court and we’re working on those amendments,” Mr Strachan disclosed.
BREA would have to meet a two-month deadline if their proposed amendments are to be tabled in the House of Assembly when it convenes in October.
Mr Strachan also believed other officials that have the power to do something are taking a hands off approach. He said they were responsible for issuing “carte blanche” to the foreign sales principals. Mr Strachan is clearly frustrated with foreign developments that he believes are not adhering to good real estate ethics.
He recently challenged the sale of condos on the Atlantis property and said it was unfair that a 4 per cent commission on each sale is being paid to agents outside the country.
“When you multiply those figures, you’re talking a lot of money. We’re missing out on this big time,” said Mr Strachan.
Atlantis spokesperson, Ed Fields, responded however that the owners of the property were not acting outside their limits.
A few months ago the BREA president also questioned a foreign developer over an ad that appeared in a local daily to hire real estate agents who were not required to have licenses.
The real estate attorney source said there must be some measures taken to protect opportunities for real estate agents. “We do have to make some noise in order to have some reasonable compensation and a reasonable balance.”
But until any real estate legislation amendments are passed, if ever, Mr Strachan proposed this solution: “[Foreigners that own developments here] ought to bring their buyers into the country and refer those buyers to a licensed real estate agent licensed by the real estate board. The listed agent sells the product and pays the foreign agent a referral fee and the licensed agent collects the majority of the commission.”
Although some may argue that as a black and white suggestion, most realtors agree on the grey area of the situation- that foreign developments are leaving them in the cold.
“You look around and you see real estate developments going on all throughout The Bahamas. Real estate is moving and the market is booming,” Mr Strachan said.
But the million-dollar question is who is feeling the effects of that boom. “How much of that money is trickling down to the persons licensed to sell real estate?” Mr Strachan asked.
He firmly believes it is a situation that is absolutely wrong.
By: BARRY WILLIAMS, The Nassau Guardian
