'Legal Landscape' - Tourist accommodations and hotel residences

Darren Donnithorne and Stephanie Matthews from Marshall Diel & Myers Limited Property & Estate planning team answer your property related questions and issues in this monthly edition of 'Legal Landscape' with Marshall Diel & Myers Limited.

Question: If it is passed as law, how will the Bermuda Immigration and Protection Amendment Act 2015 affect tourist accommodations and hotel residences?

In our previous article we provided a thumbnail sketch of the principal amendments created by the Bermuda Immigration and Protection Amendment Act 2015 (the “Act”). You will recall that the Act was approved by the Senate in March this year. If the Act is approved by the House of Assembly (it is expected that it will be tabled at the next sitting of the House in May), it will likely become law shortly thereafter. 

Our previous article discussed some of the effects of the Act on Non-Bermudian Purchasers and Permanent Resident Certificate Holders (“PRC Holders”). In this article, we take a look at the effects of the Act on Tourist Accommodation and Hotel Residences.

Current Position

In addition to certain freehold property and condominiums, Restricted Persons (primarily defined as PRC holders and other non-Bermudian individuals) can also purchase properties designated as either a “tourist accommodation” or “hotel residences”. These properties are essentially fractional or whole ownership properties located within the grounds of a hotel. At present, these properties can only be purchased by Restricted Persons if they are designated as “tourist accommodation” or “hotel residences”’ and listed in Parts 2 and 3 of the Bermuda Immigration and Protection (Designation of Eligible Condominium Units, Tourist Accommodation and Hotel Residences) Regulations 2011. We would be happy to provide a copy of these schedules upon request.  

In addition, properties designated as “tourist accommodation” are subject to occupancy limits. If only one property is owned, then a Restricted Person may only live there for 90 days per calendar year and if multiple properties are owned, then a Restricted Person may only reside there for 120 days per calendar year (provided total occupancy does not exceed 6 months in any 12 month period). 

New Act

Under the new Act, the above stated Regulations will be repealed. This means that if properties meet the basic requirements to be considered “tourist accommodation”’ or “hotel residences”, (primarily that the property be situated within the grounds of a hotel), they will be eligible for purchase by Restricted Persons. Further, the occupancy restrictions will be removed for tourist accommodations. 

This means that limits will no longer be imposed on the length of time that a Restricted Person may occupy such tourist accommodation in any one calendar year. However, the minimum ARV requirement to determine the eligibility of Restricted Persons to purchase such properties will still apply.  

As discussed in our previous article, under the Act, those ARV thresholds will stand as follows: 

  1. For Non-Bermudians, the new Act reduces the ARV threshold to $153,000, where it stood prior to a change in the law in 2012.  It also states that for a condominium to be available for purchase by a non-Bermudian, it must have a minimum ARV of $32,400.00.
  2. For PRC Holders, the new Act reduces the ARV threshold to nil for PRC Holders with respect to both freehold and condominium properties.  

The removal of the current restrictions in respect of “tourist accommodation” and “hotel residences” may assist with mobility in this area of the real estate market.

It remains the case that careful attention must be paid by all purchasers to the type of property being purchased and the procedure involved. We now wait to see if the new Immigration legislation is passed and we will provide further updates as appropriate, so please do keep an eye out for our future articles. We look forward to helping Bermudian Purchasers, non-Bermudians Purchasers and PRC holders successfully navigate the purchase of property in Bermuda.   

This article was written by Darren Donnithorne (Senior Associate & Head of the Property and Estate Planning Team) and Stephanie Matthews (Associate of the Chartered Institute of Legal Executives). This column is for general guidance only. It should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.

Got Questions? 

If you have any property questions or issues, please contact us at darren.donnithorne@law.bm or stephanie.matthews@law.bm. We would be happy to work with you to help you navigate the legal landscape in Bermuda, and you may even find your question featured on propertyskipper.  We look forward to hearing from you!  

 

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