The Tribune

By RASHAD ROLLE

Tribune Senior Reporter

rrolle@tribunemedia.net

QUICK action by parliament might be needed to address the consequences of a new Privy Council ruling that says conveyances of land without subdivision approval since January 2011 are null and void, according to attorney Christina Galanos.

Hundreds could be affected by the new ruling she said after representing the respondent in the case.

She said: “From what I understand there are some subdivisions that were not granted subdivision approval and many, many persons bought properties in those subdivisions from 2011 and on without subdivision approval. All of those conveyances are null and void. It also affects banking transactions because every bank that is holding land as collateral or those conveyances as collateral, all of that is null and void.”

The case emerged when Malik Momin took legal action against February Point Resort Estates Ltd. Mr Momin entered into an agreement with February Point Resort Estates on February 18, 2009 to buy a lot in a subdivision in Exuma for $895,000.

Mr Momin, a US citizen, paid the full price by February 2013, but a dispute broke out between the parties. Mr Momin argued he was entitled to get his money back because he did not receive a valid conveyance because the defendant did not obtain the subdivision approval required by the Planning and Subdivision Act 2010. The defendant, on the other hand, argued that according to section 62(2) of that law, its conveyance was not null and void even though the necessary approval for the subdivision had not been obtained.

Section 62(1) of the Act says: “Any conveyance made after the Act comes into effect regarding lots not granted prior Subdivision Approval shall be null and void.”

Section 62(2) says: “Notwithstanding subsection (1), where the beneficial owner of a lot in a subdivision prior to the commencement of this Act, conveyed or agreed to convey land within the subdivision but failed to obtain - (a) the approval of the Town Planning Committee in accordance with section 8 of the Private Roads and Subdivision Act; or (b) the approval of the minister in accordance with section 4 of the Private Roads and Subdivision Act; and section 4 of the Private Roads and Subdivision (Out Islands) Act), such agreement to convey or conveyance shall not be null and void due to the failure to obtain the approval under subparagraph (a) or (b) and any person who obtained title to a lot within the subdivision shall not be prejudiced by the failure of the owner of the subdivision to obtain the necessary approval under sub-paragraph (a) or (b).”

At the Supreme Court, Justice Indra Charles ruled in favour of the defendant and its interpretation of the above clauses. The Court of Appeal, however, unanimously overturned her verdict.

According to the Privy Council’s judgement, the Court of Appeal found that Section “62(1) of the Act makes it clear that post-Act conveyances of lots, where there has been no subdivision approval, are null and void.” Section 62(2) of the Act, meanwhile, “makes clear that pre-Act conveyances and agreements to convey lots, where there has been no subdivision approval, are valid and not void.” The Privy Council accepted this interpretation.

Ms Galanos admitted that most conveyances where subdivision approval had not been granted are unlikely to be challenged as in the Exuma matter.

However, she said: “What’s gonna happen is when those purchasers now move to sell their land, the new purchaser will be looking to them and say listen, we need subdivision approval. We can’t buy from you and really the purchaser is going to say to them, what you have is null and void, that conveyance that you’re holding on to say you own the land and can sell it to people, that’s like a blank sheet of paper.”

Ms Galanos said the government might have to pass a law to deal with the ramifications of the ruling.

“Another way around it,” she said, “is that developers might get subdivision approval. They might not be so inclined to do that because subdivision approval is extremely expensive because you have to put all of that infrastructure in. You have to put the infrastructure in for light, for phone, for water, all of that, and that can run you into millions of dollars depending on how big the subdivision is.

“But another fix is for those developers to get subdivision approval and then do re-conveyances now that subdivision approval is had. Let’s say a developer gets subdivision approval today and tomorrow he does a reconveyance to those people he conveyed to when he didn’t have subdivision approval. Either parliament will have to fix it, or the developer will have to get subdivision approval.”

Ms Galanos says attorneys called her yesterday confused about the ramifications of the new ruling because they were dealing with conveyances that passed “in 2012, 2013, 2014” with no subdivision approval.

“They’re like what we’re supposed to do and I’m like I ain know,” she said. “This is major. I predict parliament is going to have to act because every lending institution that would’ve lent out money on certain conveyances, all of that is null and void, the entire transaction is null and void according to the ruling so I imagine that this is something that parliament is gonna want to fix and they’re gonna want to fix it quickly.”

Ms Galanos tied the ruling to the challenges Olympian Ramon Miller is facing after being given land by the government and not having the necessary infrastructure.

“That’s the problem Ramon is having,” she said. “That’s the Olympian who they sold the property to and they ain put the infrastructure in yet, you see he has to use his generator to power his building.

“That’s the essence of not having subdivision approval. When you don’t have subdivision approval, people purchase the land but there is no way to get them phone, there’s no way to get them water, there’s no way to get them electricity. That is what makes subdivision approval so important and the problem was happening so much until parliament said listen, it’s against the law to convey property without subdivision approval because it was too much of a headache. People were buying land and then coming back and saying I don’t have a way to get things and that’s why parliament made it a criminal offence and the Privy Council has come along now and said it’s actually null and void too.”

 Attorney General Ryan Pinder said his office is reviewing the ruling.

 “We are reviewing the ruling broadly to understand its implications on conveyancing in The Bahamas,” he said.