By NEIL HARTNELL
Tribune Business Editor
The Government may receive an unexpected revenue windfall from rental property landlords, who are now rushing to comply with Business Licence Act amendments.
But, while the Christie administration may enjoy a surprise gain, some landlords - especially those with a government tenant - are finding the struggle to obtain a Business Licence is having a direct impact on their top and bottom lines.
David Morley, principal at Morley Realty, told Tribune Business that amendments to the Business Licence Act made two years ago now made clear, for the first time, that rental property landlords required a Business Licence.
He added, though, that many of his clients were experiencing difficulties obtaining the document due to a combination of the Business Licence Unit being “overwhelmed” by the number of applicants, plus the constant “moving of the goalposts” in terms of the paperwork/criteria to receive one.
This, Mr Morley explained, was more problematic for landlords with government tenants due to the Vendor Verification Number policy the Ministry of Finance has implemented.
All private sector entities doing business with the Government require such a verification number, but to obtain one they first need...... a Business Licence. With the latter application possibly stalled, and no Vendor Verification Number forthcoming, Mr Morley said it has been a struggle for some impacted landlords to obtain due rent from the Government.
“The difficulty we’re having is with the whole issue of Business Licences,” Mr Morley told Tribune Business.
He explained that uncertainty over whether landlords with rental income properties needed a Business Licence had existed from the Act’s inception, and was only clarified by the amendments two years ago when the Government consolidated its licensing regime into one.
“You have circumstances where landlords did not historically have Business Licences,” Mr Morley said. “The way the Act is written now, anyone with a rental property they’re getting income from has to pay the Business Licence fee.
“I told John Rolle [the financial secretary] and Michael Halkitis [state minister for finance] that the increase in revenue due in the next year from rental income properties is something they never probably Budgeted for.”
While the Government’s coffers may receive a boost, the new Business Licence requirement - and difficulty in obtaining one - has created problems for some landlords.
“The Government recently introduced this policy where anyone paid by government has to get a vendor verification number,” Mr Morley explained.
To obtain this, a current Business Licence is among the requirements. “If you have a landlord who has the Government as a tenant, they will not get any payment until they get a vendor verification number,” the well-known realtor added.
“It was a policy change. Landlords coming down to the Ministry of Finance to pick up a rent cheque are given a hard time until they show a vendor verification number.
“But landlords are saying: ‘Just because you changed the policy, you don’t have the right to withhold rent under the contract’. How do you force that on government? You’re caught by the short and curlies again.
“That, in itself, is an interesting situation. It’s ongoing, and a pleasant one for the Government. It’s part of the Government’s policy to make the Bahamas a smaller country. You can’t hide anywhere these days.”
Not so for the landlords. Based on feedback from his clients, Mr Morley said the Business Licence Unit appeared “overwhelmed’ in trying to process applications, and seemed unsure of the criteria it needed to apply to rental landlords.
“Every time you go there they are moving the goalposts, asking for something else,” he told Tribune Business.