Drafting of contracts and exchange of contracts once agreed
Agency: Lawyer’s office
The contract stage, which can last between 1 and 5 days, depending on the complexity of the transaction, would include the following steps:
- The Seller’s lawyer prepares a draft Agreement for Sale and submits it to the Buyer’s lawyer for approval.
- The Seller’s lawyer forwards the final Agreement for Sale (in duplicate) to the Buyer’s lawyer for execution.
- The Buyer’s lawyer returns a signed Agreement for Sale (and deposits part of the payment, usually 10% of the purchase price).
After the contract stage, the Buyer’s lawyer would conduct the due diligence included in procedures 2, 3, and 4. As part of the due diligence, the Buyer’s lawyer may forward requisitions. Once the due diligence is completed, the buyer’s lawyer forwards the draft Conveyance to the seller’s lawyer for approval.
- The Bahamas Bar Association has a sliding scale of fees for property transactions, which is based on the valued of the property:
- 2.5% of the value of the property is payable on the first B$500,000
- 2% of the value of the property is payable for that part which is in excess of B$500,000, but does not exceed B$1,000,000
- 1% of the value that is in excess of B$1,000,000, but does not exceed B$5,000,000.
Time and cost: 1 day, BSD 27,684.31
- 2.5% of the value of the property is payable on the first B$500,000
- 2% of the value of the property is payable for that part which is in excess of B$500,000, but does not exceed B$1,000,000
- 1% of the value that is in excess of B$1,000,000, but does not exceed B$5,000,000.
Lawyer or his clerk checks for encumbrances at the Registry of records (regarding any mortgages on the property
Agency: Registry of Records
Searches are conducted by search clerks or lawyers. Documents recorded at the Registry of Records are available on microfilm up to 2003. From 2003 onwards documents recorded have been scanned and may be accessed online.
When the parties hire a large law firm, the firm usually does this Documents search, together with the Court Cause List search of Procedure 3 and the Company Search of Procedure 4, in house. The firm does not charge an extra fee for these searches, i.e. it is included in the conveyance fee. When an independent party is hired to conduct the searches, the fee is 300-350 USD per lot searched
Time and cost: 45 days, Cost included in lawyer’s fees (Procedure 1)
Lawyer checks for judgments against the property at the Supreme Court
Agency: Supreme Court
This search is conducted to check if there are any judgments affecting the property, since charges imposed by judicial decisions could be levied on the property, regardless of who the owner is.
Time and cost: 1 day, Cost included in lawyer’s fees (Procedure 1)
Lawyer checks for other companies using the same property at the Company Registrar
Agency: Company Registry
Searches are done at the Companies Registry only if a company owns or previously owned the property. Searches are done to ensure that the company was existing and duly incorporated during the property ownership period and to ensure that any prior conveyance was executed in accordance with the Articles of Association.
Time and cost: 1 day, Cost included in lawyer’s fees (Procedure 1)
Real property tax status enquiry with the Valuation office of the Ministry of Finan
Agency: Department of Inland Revenue
Starting January 2015, it is required to submit a certificate of good standing with property taxes signed by the Chief Valuation officer of the Inland Revenue Department. If the seller did not pay these taxes in the past, the new owner will be liable to satisfy this debt. In addition to this Procedure, the buyer’s lawyer might also choose to make an inquiry with utility companies (water, electricity and phone/cable). Such inquiry could be conducted within two weeks.
Time and cost: 1 day, Cost included in lawyer’s fees (Procedure 1)
Payment of Stamp Duty
Agency: Public Treasury
Stamp duty is paid at the Public Treasury. According to the Stamp (Amendment) Act of 2018, effective July 1st, 2018, the rate of stamp duty is 10% of the property’s value for all property transactions valued at more than $100,000. No Value Added Tax is required.
Time and cost: 1 day, BSD 151,843.1 (10% of the value of the property)
Lodge the conveyance for recording at registry of records
Agency: Registry of Records
It generally takes between two and three months for the Registry of Records to record a property transfer and return the supporting documentation after it has been filed for recording. To file the transfer instrument for registration, the affidavits of the witnesses to the conveyance must be notarized. This Procedure is not necessary for the validity of the conveyance, but it is a requirement under the Registration of Records Act (Ch. 187 Statute Laws of The Bahamas, 2000 Edition) to record the transfer. Any licensed notary public can do it at a cost of BSD 30.00 to BSD 50.00, and in most cases, lawyers have a notary public license, in which case they may do it themselves. In this case, the fee is included in the lawyer’s overall fees charged in Procedure 1.
Time and cost: 75 days, BSD 4.5 (BSD 4.50/page)
