You may have wondered who pays attention to those Notices of Proposed Acquisitions of Land which often appear in the weekly Government Gazette, sandwiched between the various official appointments and other announcements.

Almost certainly they do not escape the notice of those who are in any way involved in the real estate industry.

Real estate agents and property attorneys look upon the notices as a pretty good guide to the buoyancy of the market when it comes to the sale of properties in Bermuda to non-Bermudians.

That is because the publication of a Notice means that a non-Bermudian has applied to the Immigration Department for a licence to acquire property.

The licence, required under the Bermuda Immigration and Protection Act, is applied for once a sale and purchase agreement has been signed between buyer and seller.

Such applications, which among other things require a banker's reference as well as two personal references from referees who have known the applicant for at least three years, invariably take up to three months to be processed.

It is for this reason that property attorneys in Bermuda will almost always include in any sales agreement, which features a non-Bermudian buyer, a special condition that gives the buyer at least three months to apply for and obtain a Licence to Acquire.

The actual completion of the purchase is, as a consequence, usually fixed at 30 days from the date of issue of the Licence to Acquire.

The sales agreement normally requires the buyer to make the application `with all due diligence and dispatch' and that `all reasonable efforts be made to obtain the Licence to Acquire'; in short, to proceed without delay upon the signing of the sales agreement.

The Immigration Department will want to be sure that the property qualifies for purchase by a non-Bermudian under Government policy. To qualify, houses -- and for the purposes of this article, condominiums, which are treated differently, are excluded - must have an Annual Rental Value (ARV) of $126,000 or greater. There are an estimated 278 such properties in Bermuda.

There is a recent exception to the minimum ARV requirement where the non-Bermudian buyer is the spouse of a Bermudian, and together they wish to purchase the property.

In the case of a strictly non-Bermudian purchase, the Immigration Department will check to see if the minimum ARV has been met by reviewing the Land Valuation List.

Government policy also requires that Bermudians be given `a fair opportunity' to first acquire the property. This requirement is usually met by forwarding to Government copies of the `for sale' advertisements for the houses with details on where and when they appeared.

A fee of $1,097 must accompany a prospective buyer's application for a Licence to Acquire. Where applicants are successful, the fee is applied in payment of the next fee which non-Bermudians must pay.

Since 1998, that payment has been set at 22 percent of the value of the property. This payment, of course, is in addition to the stamp duty that must be paid on the actual deed by which the property is conveyed.

In the case of a $2 million house purchase, the non-Bermudian purchaser would be required to pay a $440,000 licence fee and $89,000 in stamp duty on the conveyance.

That adds up to a handsome total of $529,000 for Government's coffers; and this sum is of course in addition to the $2 million paid to the seller. The 22 percent licence fee is not paid where a non-Bermudian spouse buys with his/her Bermudian spouse.

Under the recommended scale of fees of the Bermuda Bar, legal fees would amount to around $11,500 -- $10,500 for the conveyance of the property and $1,000 for the Licence to Acquire.

It is no wonder that successive Governments have been able to state without contradiction that the policy on the sale of homes to non-Bermudians ensures that only the highest-valued properties are available, and they are attractive only to very wealthy people.

Once they have acquired property, non-Bermudian owners may by law only sublet or rent the property in very limited circumstances and for limited periods of time.

There is also a prohibition on sub-division except in very narrow circumstances. These are usually spelled out in the conditions of the Licence to Acquire.

*** Attorney John Barritt is Head of the Property Department at Appleby Spurling & Kempe. Copies of Mr. Barritt's columns can be obtained on the Appleby Spurling & Kempe web site at www.ask.bm.

This column 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.

LAWYERS LEG