Real Estate Division

2007/2008 Chairman’s Report

Co-Chairpersons: Susan Thompson & Beth Gosling

Bermuda’s economy continues to gallop along and with it the property market. Sales and rentals have been uniformly buoyant but subject to and certainly fueled by the continued high demand of the public aided by very competitive financing options and a largely depleted pool of available properties. The later part of 2006 to the beginning of 2007 was relatively quiet with prices of properties remaining steady with no significant movement up or down. By late spring we saw a resurgence of interest, particularly in condominiums and the luxury home market, with this trend carried through the summer. The general comments I have been hearing from agents are that there are a lot of people shopping around but they are very savvy to property values and less likely to jump at the first property they see.

Our division has had a relatively quiet year but I am happy to report some of our activities and initiatives on behalf of our membership;

Throughout the past year we have hosted a number of information seminars open to Chamber members some of the topics presented were ; Financing a purchase, Simplifying the Buying process and Know about Condos. Some of these sessions were well attended and some were not however, I would like to thank the committee participants who took the time and effort to present.

In 2006, we initiated a series of Chamber News articles that ran monthly in the Island Property News with executive committee members contributing. These articles were also intended as information vehicles to give the public an insight to our industry and what affects it. This initiative got off to a great start and with enthusiasm however after about 6 months or so members ran out of steam and the decision was made regretfully, to give up the article.

On July 18th our division was given a presentation by John Meadows of the Land Title Registry Office of the mechanics of initiating a land registry in Bermuda and the progress that he and his team have made in bringing it into fruition. It is a daunting undertaking and will take a number of years before there will be a system up and running that will be openly available for the public’s use. It is quite amazing that as sophisticated as Bermuda is that up until now we have not implemented a land registry system but then, look how long it took for TCD to computerize their records. As you are all well aware we currently operate under English Land law and the deed system. It is an imperfect system that is rapidly becoming obsolete. There are numerous advantages and benefits to the community and I urge any of you unfamiliar with this initiative to visit the Land Title Registry Office website and read their Public Consultation Presentation document.

With the lead up to the General Election we have seen as would be expected; “election jitters” with buyers and sellers holding off to “after the election”. Although this is not unusual, per se, we can point directly to a prime reason for this uncertainty and has in large part if not completely to do with the following:

On June 22, 2007, Government got our collective attention by enacting the anticipated amendments to the Immigration Act. I say that it was anticipated because unlike the preemptive policy changes of February 2005, Government sent an advance copy of their proposed amendments to the Bermuda Bar Association for comment. Our division was then forwarded a copy of The Bar Association response. In a nutshell, the Bar Association pointed out various problems and potential issues of discrimination against Bermudians that could arise from some of the amendments (amongst other matters)and advised caution and more consultation with the Bar Association before tabling these amendments. How much, if any more, consultation took place on this matter before June 22nd, is unknown to this division. What we do know is that these amendments managed to confuse lawyers, bankers and real estate agents, not to mention the general public. Lawyers are unclear as to who they can and cannot convey property to, bankers are being asked to certify the source of funding for purchases and the real estate agents, who are the frontline soldiers, are running around showing property to people who can’t buy it! Susan and I have been inundated with calls from real salespeople, clients and prospects all seeking clarification of what PRC’s could and could not buy, who Bermudians could and could not sell to and the hottest topic of all; the non-Bermudian spouse issue. Susan wrote to Dr. Martin Brewer of the Immigration Department seeking clarification on many of the ambiguously worded sections of the amendments so we could best advise our members. Lawyers, Bankers and Real Estate agents repeatedly called for clarification by way of a policy statement which normally follows legislation. Finally, this explanatory statement, entitled Guidance Notes for Part VI of the Bermuda Immigration and Protection Act 1956 and related policy for the acquisition of land by restricted persons was issued mid October. We should have become immediately suspicious that it takes 44 pages of guidance notes to navigate 36 pages of legislation.

The major problem we have been facing is confidently informing the public as to their right to buy or sell real estate and to be able to point to a source of information which is reliable for answers. Lawyers have been polled and have been understandably guarded in their responses. They err on the side of caution with their clients, discouraging formation of trusts and in some instances advising clients to dissolve their existing trusts even if they would be deemed legitimate if scrutinized. Bankers are weighing their fiduciary obligation to their clients against the imposition of fines for failing to disclose what quite rightly should be confidential information.

One agency has made it office policy to ask purchasers for documentation of their Bermudian status before they have them execute a sales and purchase agreement. I am beginning to think that George Orwell was as time traveler and he came to the future (being Bermuda 2007) and we were the inspiration for 1984.

I wish to inform the membership that Susan and I, after 3 years have made the decision to step down as Co-Chairs of this division. It is both of our intentions however, to remain on the executive committee.

We initiated the concept of co-chairing with our tenure and highly recommend that it be continued as it divides the varied duties and responsibilities (many of them laboriously administrative) of the Chair. We would like members of the executive to consider stepping up to take over from us as it is a responsibility that each and all of us should participate in. Additionally, we encourage non-executive committee members to join the executive and participate and contribute to the matters which affect our industry.

I would like to thank the committee members for their attendance and participation of the executive and give a special thank you Fiona Lines our coordinator. Also, thank you Susan for her hard work and the excellent administrative resource you provide this division.

Lastly, it is with sadness that I must mark the passing of one of our associates, Patrick Mayers. Patrick always comported himself professionally, with honesty and sincerity. He was a gentleman and he will be missed. I am certain that I speak for all members in extending our condolences to his widow, Maria who is with us today, and to his family.

The newly elected Chairman for 2008/2009 is Buddy Rego.