The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Top realtors yesterday admitted to concerns that a US Embassy advisory would negatively impact the industry, with the market paying for a minority of “get rich quick” schemes.

George Damianos, head of Damianos Sotheby’s International Realty, told Tribune Business that the Embassy’s real estate advisory was no cause for “panic”, even though he conceded it might give US developers and home buyers pause for thought about bringing their investments to the Bahamas.

And Carla Sweeting, the Bahamas Real Estate Association’s (BREA) president, said this nation was not unique when it came to property “scams”, and was likely far better than many other nations.

Emphasising that she was speaking in a personal capacity, and not for BREA, Ms Sweeting added that the US Embassy often tended to go “overboard” with some of its advisories.

She conceded, though, that she was concerned over the advisory and its potential impact, especially for Family Island realtors who relied heavily on second home purchases by international buyers for their livelihoods.

Disclosing that the BREA Board would likely discuss the US advisory within the next few days, Ms Sweeting said: “It’s unfortunate, but it happens anywhere.

“You can get scammed anywhere in the world on real estate transactions, and they [the US Embassy] tend to go overboard with some of their positions.”

She added: “I am a bit concerned about it because I don’t want it to negatively impact those members in the Family Islands in particular, who rely on second home owners.”

Mr Damianos, meanwhile, added: “I think in general it will have an impact on the Bahamian real estate market. There’s no question in my mind it will have an impact.

“It is a concern, there’s no secret about that. Things do go on, things happen. And because it does happen the whole market may get a little reprimand because the US government puts that on their website.

“If I was a US investor willing to invest $2 million in the Bahamas, I would be concerned and want to find out what the details are.”

Mr Damianos likened the US embassy advisory, and its impact, to a travel warning and the likely reaction of the Ministry of Tourism.

“Unfortunately, in the Bahamas we have got rich quick schemes,” he told Tribune Business, pointing out that the majority of real estate transactions in this nation were good.

“The majority will get a bad rap for the minority,” Mr Damianos said. “The best we can hope for in the Bahamas is giving the correct guidance to investors.”

The US Embassy advisory appears to have been heavily influenced by the debacle surrounding the Exuma-based Oceania Heights project, where at least 17 investors have abandoned their six-figure property purchases amid ongoing difficulties in obtaining good title to their real estate.

Among the problems likely experienced by foreign buyers are failures by Bahamian attorneys to pass on their Stamp Duty payments to the Treasury, thus preventing their deeds/conveyances from being recorded - an obstacle to receiving good title.

Other issues are incorrect title opinions rendered by attorneys, something that is usually covered by their indemnity insurance. Quieting Titles challenges to their purchases also unnerve foreign buyers, as do the lengthy - and costly - process of seeking legal redress through the Bahamian court system.

Mr Damianos agreed with the US Embassy that the best defence for international real estate purchasers was to use reputable attorneys and realtors in completing their transactions.

In its advisory, the US diplomatic mission urged: “It is important that US citizens work with a trusted attorney to make sure there is clear title to their property or proof that the sale was properly recorded or documented with the Real Property Tax Department.........

“Even with title insurance, US citizens still encounter large issues. US citizens have reported losing large sums of money after ‘purchasing’ property in the Bahamas, only to discover that the seller did not have clear and/or indisputable ownership of the property.”

The US embassy warning added: “Court proceedings related to rightful ownership can be costly and time consuming. There are civil disputes regarding fraudulent real estate deals that have gone for many years.

“When selling a property, similar issues arise. If a deal seems too good to be true, it usually is. Prospective purchasers are advised to check the veracity and status of the prospective seller’s ownership with a trusted attorney and/or title agency.

“A prospective purchaser may request that the Registrar General’s Office for Deeds and Documents verify the name under which a deed is registered. A prospective purchaser or seller may contact the Business Licence/Valuation Unit to check for any discrepancies in ownership of property, assessment for taxes and when taxes were last paid.”