NASSAU, BAHAMAS — A historical Privy Council judgment handed down yesterday has made any conveyances from January 2011 to date, of land in subdivisions that do not have subdivision approval, null and void.
The ruling confirmed the interpretation of section 62(1) of the Planning and Subdivisions Act, 2010.
The 2010 act repealed the Private Roads and Subdivision Act (ch 256) and the Private Roads and Subdivision (Out Islands) Act (ch 257).
While it was already a criminal offense to sell or convey land without subdivision approval, the latest judgment from the highest court makes it clear how the execution of conveyances after the new act came into force should be handled.
Attorneys Christina Galanos and Obi Pindling have been dealing with the litigation of the matter on behalf of their client Malik Momin.
Momin, who is a United States citizen, entered into an agreement with February Point Resort Estates Ltd, a Bahamian company, on February 18, 2008, for the sale of a lot in a subdivision on Exuma for $895,000.
While the full price had been paid as of February 2013, a dispute arose between the parties over whether Momin was entitled to the return of the money he had paid because the developer had not obtained the subdivision approval required by the 2010 Act and, by reason of section 62(1), there could be no valid conveyance to him.
A Supreme Court ruling on the matter decided in favor of February Point Resort Estates Ltd.
However, that decision was reversed by the Court of Appeal.
The matter was appealed before the Privy Council.
The court case questions “if the necessary planning approval for a subdivision has not been obtained, what effect does that have on an agreement to sell a lot (and the conveyance of a lot) in the subdivision?”
The Privy Council dismissed the appeal.
“Lest there be any doubt, we see no good reason to grant February Point Resort Estates Ltd any further indulgence in terms of obtaining the necessary subdivision approval and, therefore, February Point Resort Estates Ltd should now repay to Malik Momin the purchase price paid plus interest,” read the ruling.
Both Galanos and Pindling touted the success of the ruling, insisting that it was “satisfying” to have secured the win at the highest appellate level in the country.
Galanos noted that she has already received dozens of calls from colleagues advising her that their clients have been in similar instances.
Pindling said they anticipate the domino effect of the ruling will be rather significant.
“We have no doubt that there are thousands of conveyances which are infected by this. Not only are the individual landowners are affected, but you also have banks who would have issued mortgages on the security of these conveyances or the collateral these banks are holding for these mortgages.”
Galanos indicated that homeowners who may be impacted by the ruling would have to have those conveyances regularized either through reconveyance, a quieting, or an act of Parliament.
Pindling advised that “Parliament also has the option to go back and again amend the law so as to amend the conveyances that fall into this category.”
The pair further urged homeowners who have purchased property since 2011 and beyond to check to see whether subdivision approval was in place at the time of the purchase.
Additionally, for those who are about to purchase property, they advised buyers to make sure subdivision approval is in place, and request a written verification that the approval is in hand and available.
