FREQUENTLY ASKED QUESTIONS
Questions on Bahamian Real Estate Law
Q: What is an Agreement for Sale?
It is a contract between the Owner of the property and proposed Buyer that sets out the terms and conditions of the sale/purchase of the property.
Q: What is a Gross Agreement?
It is an Agreement whereby the Seller and the Buyer are responsible for the respective Legal Fees. The Seller and Buyer will share the Stamp Duty.
Q: What is a Net Agreement?
It is an Agreement whereby the Buyer is responsible for the Sellers and the Buyers Legal Fees calculated. The Purchaser will be responsible for all the Stamp Duty.
Q: What is Stamp Duty?
It is the sum payable to Public Treasury on completion of the transaction. It is calculated on a percentage depending on the consideration of the transaction.
Q: What is Real Estate Commission?
Real Estate Commission is the sum payable to the Realtor as a result of introducing the buyer and seller to the sale/purchase of the property. It is equivalent to a “Finders Fee”.
Q: What is a Title Search?
It is the investigation of the Vendors title to ensure a good and marketable documentary title. It also reveals any outstanding loans or Court Action which may affect the transaction.
Q: What is a good and marketable title?
This is a requirement by the Vendor to produce evidence of his ownership of the property by way of documents. Evidence of such must be produced for 30 or more years. Other acceptable documentary title includes a Crown Grant or a Certificate of Title which do not require evidence of 30 year title.
Q: What is Real Property Tax?
This is tax calculated and paid at the Public Treasury depending on the type of property subject being sold. It is calculated on all commercial, rental properties and also on various residential properties. This is paid on by the Seller before completion of this transaction.
Q: What is the “Completion Date?”
Completion date is the date agreed to by the Seller and Buyer whereby all provisions of the Agreement will be performed by them and completed on or before that date.
Q: Why should a deposit be paid?
Deposit is paid by the Buyer at the same date the Agreement is signed. The Seller will then sign the Agreement upon evidence of the deposit being paid.
Q: What are maintenance fees?
These are fees that are common in Condominium Association or Home Owners Association for example; gated communities. The fees pertain to common areas within these types of development.
Q: What is ‘Joint Tenants’?
Joint Tenants are when two or more persons purchase property. The surviving tenant is recognized by the law to be the sole owner upon the death of the other (s).
Q: What is ‘Tenants-in-Common’?
When two or more persons own property together and should one die the deceased person’s interest will be dealt by his Estate.
Q: What is the ‘Right of Way’?
It gives a buyer or his visitors the right to use the private roads within a Subdivision. A Seller can only past this right if he or she obtained it at their date of purchase.
Q: What are Restrictive Covenants?
These covenants permit the development of a parcel of land particularly Subdivisions subject to the approval of the Ministry of Works.
Q: What is a Mortgage?
A Mortgage is a loan document between the Purchaser and their bank. It contains the obligations by the Purchaser in particularly the repayment of the loan.
Q: What is a Conveyance?
This is a document between the Seller and the Buyer which transfers the ownership of the property in accordance with the Agreement for Sale.
Q: What are requisitions on Title?
These are questions on title as a result of the title search which are raised with the Seller or their Lawyer.
Q: What is an Appraisal?
It provides a precise value of the property and is conducted by independent Appraiser; this is usually requested by the Purchaser.
Q: What is Stamp Duty exemption?
This is an application to the Ministry of Finance by first time Purchasers with respect of obtaining their portion of Stamp Duty exempted. This pertains to the purchase of residential properties or a vacant piece of property will the intention to construct a residence.