Opinion: Famous On Companies & Real Estate
[Opinion column written by Chris Famous]
In keeping with OBA’s pattern of bowing to the Chamber of Commerce, they have initiated the selling of Bermudian property to exempt companies via amendments to the Companies Act 1981.
“Create clear rules to allow foreign exempt companies, which meet certain criteria, to purchase residential properties.”
- Chamber of Commerce Budget Wish List – February 17th, 2014
OBA Throne Speech promise:
“Issues with holding, acquiring and conveying land will be clarified and streamlined through amendments to the Companies Act 1981 and consequential amendments to the Bermuda Immigration and Protection Act 1956.”
- Throne Speech – November 2013
ARV Limit altered?
Currently, non-Bermudians are only allowed to purchase property with a grant of a license by Government. Non-Bermudians are not permitted to purchase undeveloped land and ownership is restricted to condominiums [in designated developments], and homes with an established minimum Annual Rental Value [ARV].
The minimum ARV for houses is $177,000 and $32,400 for condominiums. This typically translates to a selling price for qualifying homes and condominiums of approximately $3.5m and $700,000 respectively.
This amendment may very well result with these controls being relaxed in the future, and allow for exempt companies to purchase property in Bermuda regardless of property value.
OBA Cabinet Control
Under these new amendments, the OBA cabinet alone will have supreme control over decisions pertaining to restricted business activity and corporate land holding. This means that it will not be brought to the HOA to be voted on by both OBA and PLP MPs.
The OBA is also seeking to grant themselves the right to amend past and future decisions made regarding land holding by local companies.
What does this mean for Bermudians?
- Bermudians could face higher rents, as the supply of apartments is reduced.
- The trickle-down effect generated from guest workers paying rent is about to be turned off permanently.
Consider how much money will not get into the economy once the number of renters in the locally-owned property market is cut significantly. Many Bermudians could potentially lose their tenants as they will be instead housed by employers.
In January 2014, the Bermuda Monetary Authority estimated that as of Q3 2013 non-performing loan balances rose to an unprecedented level of 11.7%. How many Bermudians will face possible foreclosure as a result of this amendment? Arguably, banks could be less inclined to re-finance mortgages if there was a potential to sell these properties to exempt companies.
Lock, Stock, and Barrel
Through this amendment, exempt companies could potentially become Bermuda’s largest property owners. Currently 38% of our 6,000 acres of residential-zoned property is available for purchase by non-Bermudians.
Some estimates are that this cap has already been surpassed. Compare this to our population profile of 79% Bermudian and 21% non-Bermudian; there is already an imbalance.
Stand up or sell out?
Bermuda’s limited land must be protected for our future generations. With this OBA amendment, Bermudians run the real risk of becoming second-class citizens in our own country. The selling off of our lands will have long-term social, economic and cultural implications that will irreversibly change our community. Once this legislation is passed, amendments to the Bermuda Immigration and Protection Act 1956 will follow suit.
The OBA is all about selling out our land, jobs, and our birthright. They are not protecting Bermudians.
“And If I have to make it easier for rich white people to own land in Bermuda that is fine!”
- MP Bob Richards’, House of Assembly, March 1, 2013
- Chris Famous
Won’t be investing in Bermy any time soon, way too many risks involved.
Might have a punt on buying up land in St. Kitts though. Thanks for the hot tip Chris:)
oh yea baby…buy up “their” birthright. Mr. Famous is totally cool with that.
Does anyone listen to this person anymore ? Why is this piece entitled OPINION…all it is is typical PLP criticism with no useful backup info whatsoever…waste of space he is !
Who in the heck is this guy Famous, Famouss, Famousss and who cares???
He is a bias P.L.P supporter using scare tactics in an attempt to instill fear in them, “that can’t think for themselves”
For such a xenophobic person that apparently is against any foreign presence in Bermuda, why does he constantly advocate for foreigners to buy up property in St. Kitts?
The author has advanced this idea as a means to boost the St. Kittian economy, but then decries the selling of local luxury properties that no average Bermudian could afford in the first place. Why does he feel that he can speak on what St. Kittians actually want while at the same time telling us exactly what Bermudians don’t want?
So in essence he is advocating for foreigners to take advantage of St. Kitts commercial immigration policy, but then cries about how bad it will be for BDA?
A serious disconnect going on here. But I am pretty sure the author will have some roud about way of explaining his blatant hypocrisy.
Given that we’ve already seen the positive impact selling real estate to commercial entities has on the island (see the sale to ACE / XL of the site of the old Bermudians hotel—a move which was introduced and supported in 1997 by the PLP), this column smacks of scaremongering without regard to economic realities. Famous seems to forget that only those properties available to high net-worth individuals will be available for sale to corporations. And that land ownership will be capped at sons fixed percentage. Again, scaremongering without regard to realities.
Yes, the PLP has all the answers now that they’re the Opposition. Yet, during their time in government, Bermuda went into terrible debt and companies no longer wanted to be on the island, taking many jobs with them.
But couldn’t that just be from the recesion? It seems like a HUGE coincidence that the mass exodus stopped when the OBA were elected. Could it be that the OBA may know how to run the country better?
With these concessions why would they leave??????????????????
Exactly the point of havign them! They’re here and we have jobs!
Bermuda’s land should be accessible to our future generations. If a company buys a house, can not a Bermudian of the next generationthen make an offer to buy the house?????
This column is a load of crap. He is just making stuff up out of thin air. It’s a wonder anyone publishes this sh!t.
If you don’t like it here Chris, go back to St Kitts. I’m sure it’s all perfect there.
Soooo Suzie Q, what say you to those Bermudians that rely heavily on rents from IB tenants? Many will / could be affected greatly by this law.
The Banks and Real Estae agents were the beneficiaries of the last boom and they are about to celebrate again.
If you rely heavily on rents, then you speculated on buying that property. there is always the risk a tenant will leave and if that is the case you have to deal with it.
There will be no impact for the vast majority.
Those Bermudians who rely heavily on rents should be rejoicing that companies are being encouraged to locate and stay here.
As usual this has gone way over your head.
Let me explain in much simpler terms.
Past IB boom: IB Company rents very nice homes & condos for top employees from Bermudians. Bermudian landlords profit & are happy.
Future IB boom (IF LUCKY): IB Company buys very nice homes & condos & allows top employees to stay in them rent free while here. No profit for Bermudian landlords No happiness.
You don’t get it or you don’t want to get it , which one is is it?
Contrary to Famous’ usual scaremongering – i.e. “This amendment may very well result with …. controls being relaxed in the future (allowing) exempt companies to purchase property in Bermuda regardless of property value” – the Government has already said that there will be no change to the ARV values available for purchase to non-Bermudians.
If no additional properties will be available for sale to non Bermudians (individuals or corporate entities) just what is your point Jonah?
So here is a scenario. Exempted Company X buys a property with an ARV above whatever bracket is set. They then knock it down and build 50 condos on the property and house all of their overseas employees there instead of paying a housing allowance, as it is cheaper (long term) to do so. (Look at ACE’s day care centre on Woodbourne Ave. if you want an example of how this scenario could be construed). I don’t often agree with Mr. Famous’ viewpoint, but this is another example of a situation that needs to be managed and monitored.
Sorry “construed” is the wrong word. Delete “be construed” and put “play out”.
Nobody will stay in provided corporate blocks for any length of time. You would have to be an IDIIOT to think they would want to be stuck next door in blocks with people they work with.
WAKE UP and stop scare mongering
If they are young, single professionals, corporate housing sounds brilliant. No rent etc. I’d do it. We’re not talking about a slum here. If they are nicely appointed and well kept it will be no different from the places they came from, eg. New York, London etc. (Except they might even get a “private” beach. I’m not saying that I agree or disagree with the policy, it’s just I hope that scenarios such as these have been considered, as they are possible. Many expats are here to make money – nothing more!
They will make money to be spent in our economy, they will ultimately pay taxes, healthcare premiums, purchase goods and services which will benefit Bermuda.
The Government and Planning has to approve any sale or development. At the moment we have surplus condo’s on the market, a ton of properties that people cannot sell and cannot pay mortgages for. I think that the consideration would be for the sale of these properties before any new development is authorized.
One would expect the development possibilities you mention would need approval. So yes, monitoring.
But as long as they meet the requirements of the Bermuda Plan 2008, then DAB has few if any grounds on which they can object.
No unless those requirements are changed and updated. As they most likely will be under the new legislation.
A company might buy a multi million dollar house and turn it into condos for single unmarried employees? Complete rubbish. It’s nonsensical, a bit like building 60 ugly condos on a prime South Shore beach would be. Oh wait…..
Jus’ Askin’, you really do not know anything about the property development restrictions applicable to non-Bermudians, do you?
That aside, even if one was to knock down a residential unit with a high ARV and replace it with 50 units, the new units would each have a much lower ARV making them unavailable for ownership by non-Bermudians in any case….
The PLP gave out tons of SDOs that promised to sell off Bermuda’s land to foreigners and now they’re complaining?!
What short memories.
Right?
No they just want the sinecures of office that they take as their due.
Mazumbo, The Dark Knight Returns, Coffee or whoever you choose to be today, Chris…….when you gonna have some real solutions?
When you gonna push for the PLP to join the 21st Century?
No one can simply buy a property and knock something down and build anything without permissions from various Government departments as well as the Minsiter at the time.
On top of that the new policy states that any property development (i.e. condos) undertaken by one of these firms they must “divest itself of residential units within 5 years…and should not expect the divestiture period to be extended.”
The companies are prohibited from renting or leasing the properties to any 3rd parties. Trust companies participating must provide evidence the ultimate beneficiaries are Bermudian and are still subject to restrictions imposed by the Bermuda Immigration and Protection Act 1957.
On top of that the companies that are allowed to participate must ensure they have a physical presence on the island and if they do decide to re-domicile they must divest its interest in the property within 3 years of leaving Bermuda and cannot be rented during this time.
If the author was so concerned about the loss of rental income derived from IB employees, then why did and does he constantly declare his support for the Term Limits policy. A policy that assisted in driving out thousands of expatriates and thus taking with them their monthly rental payments from Bermudian homeowners?
Also, his injection and purported opposition against the fact that this is a policy (i.e. not legislation) that isn’t required to be debated in the House stinks of political tribalism (using his words). That is due to the fact that his beloved Term Limits policy was also a policy that didn’t require to be debated in the House and yet we heard no objection from his side to this fact. To the author this is now apparently a dastardly deed because it isn’t a policy that he supports and nothing more (except if you are seeking to purchase land in St. Kitts of course, then he is all for it).
I don’t know which circles that the author runs in, but I don’t know of too many ‘average Bermudians’ (as the author purports to write for and defend) that can purchase $3.5mn properties. Also, to cap off his article he claims that condos as lows as $700k can be included in this program. However, in the press release it notes that only condos with similar ARVs of the residential homes ($177k) will be eligible and not the $34k as stated in the author’s article.
I find it completely ironic (hypocritical?) that this same author is against ‘selling out’ to foreigners has no qualms about trying to sell off land in a foreign country to individuals that would be considered to be foreigners to the locals of the country that he thinks that he has some inalienable right to advertise for sale. Ironic and hypocritical…but all to be expected given the source.
One problem I have here is that Mr. Famous is determined that the Government is bowing to the Chamber of Commerce. Why is it so hard for him to imagine that the Government and the Chamber have the same opinions about what is needed to move the economy. It would be easier to buy Mr. Famous’s arguments if he didn’t couch them all in some grand conspiracy theory. Mr. Famous, as my Dad used to say, if it seems like it is you against the world, there may be a simple reason for that.
See…the problem here (and let’s remove my boy for a minute) is that the PLP is STILL entangled in this struggle. They don’t have anything new to give cuz they still represent that 20th Century battle between the UBP and the PLP. They can’t let go of it – but how can they when they can get supporters to fall into that thought process? It’s an easy win for them.
And the other thing is that if they are going to moan about the old UBP being resurrected as the new OBA, they only need to look at themselves. The people who put us in this mess are still leading the PLP and they are the people that fought that fight with the old UBP. As far as I am concerned, if the old UBP never went anywhere, then the old PLP is still with us. We might as well be back in pre-1998 Bermuda in that case.
Yo Chris, why dont you do what you PLP mates did and start wrting your opinions in the papers down south..
Joonya,
He already does.
Caribbean News Now! Daily Headlines. Dated 19 March
Last week education, this week real estate; Mr. Famous is quite the expert – and like so many experts is so completely dead wrong. The bottom line is the economy will not recover without a recovery in real estate prices, homes being the bulk of most individuals’s savings. Stimulate real estate and you stimulate everything, except perhaps the hard core self-destructive PLP begrudgery of the likes of Mr. Famous. As I’ve said before, PLP, the party that learns nothing and forgets nothing.
Thank you for taking the time to read
last year I was accused of scare mongering when I stated Min Fahy will some how find a way to offer status
I was also accused of scaremongering when I stated PCC will not last as premier
If you all take the time to read the fine print of this amendment you will see that the OBA cabinet alone will have the ability to alter the ARV level.
Which will have a direct adverse impact on the middle class of Bermuda.
* less tenants
* rise in property costs
Let us know if I am mistaken in saying that C suite executives who presently rent, will still be renting, once their company purchases houses.
So how many Bermudians are set to lose their tenants?
If someone purchases a home for 4+ million there is no law stating they have to renovate kitchen or bathroom. Hence the promise of a construction boom is over exaggerated.
The only clear winners in this situation is the realtors.
Ref St Kitts.
I clearly stated then and I will repeat my statement now
At starting prices of nearly 1 million for a 3 bdr home,many Bermudians are financially excluded from the Bermudian real estate market. So if they wish they can explore the possibility of investing in St. Kitts
The Price of land in St Kitts is a fraction of the cost in Bermuda.
Secondly Kittitians welcome persons who have family relations in St Kitts to come back and invest.
Similar to Bermudians returning home to invest in Bermuda.
They are not viewed in a negative manner.
It is ironic that those who hide their names seem to be so brazen as to hurl partisan and personal insults. Yet when presented with salient facts, chose to divert to personal attacks.
Stick to the issues not the individuals.
Thanks again for reading.
God Bless you all
“last year I was accused of scare mongering when I stated Min Fahy will some how find a way to offer status
I was also accused of scaremongering when I stated PCC will not last as premier”
No one has been offered status (i.e voting rigths) and PCC is still Premier and ws unchallenged at the last OBA vote in mid-2013.
So pure scare mongering is exactly what it is…
Just like this “article.”
Exactly…
So you were wrong and WERE, in fact, scaremongering when you said these things.
Got it.
Did I state voting rights today?
But as you brought it up.
“I’m not being evasive and I’m not going to pre-empt Cabinet,” he said. “I’m not going to say this is what my preferred option is — I haven’t shared any of that with my own colleagues.”
Minister Fahy Feb 11 2014
Has he denied that he will give the right to vote?
Has he stated that he would?
Also, what about your response to your false PCC accusations?
What basis do you have, Chris, for suggesting that the minimum ARV for foreign ownership is going to be reduced? Because it looks like you made up this complete fiction in your head, and then wrote an article complaining about it.
“With regard to further stimulus to the Real Estate sector, our members would like to see an amendment to the current regulations to create more international demand for Bermuda real estate.
Create clear rules to allow foreign exempt companies, which meet certain criteria, to purchase residential properties.
Allow Permanent Resident Certificate [PRC] holders to purchase any property on the Island.
Lower the tax payable by non-Bermudians to purchase property on the Island; raising the Stamp Duty for foreign purchasers a few percentage points instead.
Allow existing foreign property owners, who have bought and sold a Bermuda property, to purchase new property without again going through the cumbersome permission process.
http://bernews.com/2014/02/chamber-of-commerce-2014-budget-wish-list/
For crying out loud that is first of all a quote from the Bermuda Chamber of Commerce, not government, and second there is no mention at all to reductions to the minimum ARV in that story.
Again what basis do you have for suggesting that the minimum ARV for foreign ownership will be reduced?
Actually as I think about it further, don’t bother. After reading a couple of your opinion pieces it is pretty clear that your role is to pump out mindless propaganda which I guess is the role of the PLP’s Assistant Party Organizer (Central).
I’d ask you for some solutions to our problems (something your articles seem to lack), but then it was your party that got us into this mess, so that would really be a waste of time wouldn’t it. Kind of like taking a driving lesson from the kid who just crashed his dad’s car.
So you have no basis at all for making the statement. None. Your whole “opinion piece” is written based upon a baseless fiction that you made up out of thin air.
That is why you have no credibility, Chris.
Mr. Famouss is a very intelligent person.
Remember this. He gets paid very well from BELCO and will have a huge pension.
He aloows his name to be used because he can handle pressure.
Most of what he purports to write is not penned by him.
PLP propaganda but he minds none if his name is used. Ever notice no slander, defamation , libel et al?
His monies are in St. Kitts along with many others. Where is Ewarts money.
All off island.
Must admit that he is not quite as bad as Commrade Pembroke West.
Ever notice no writing on the walls.
You will get it.
And the Tuckers point SDO was what??
There is a surplus of Condo property on the market right now, people cannot sell! Grand Atlantic sits empty and Famous is worried about a shortage, rents going up? Supply vastly outweighs demand and will continue to do so for a very long time.
Does he just make stuff up?
What warrants this guys opinion in the press? What has he ever done in his life to form a learned opinion on housing policy and economics? This is the thing with the PLP, too many pretenders!
Steve, if you have any children of working age living with you, you would wish them out of your house and into their own; but they CANNOT afford the typical 2 months’ safety deposit plus first month’s rent plus moving costs plus utilities plus transport plus.. plus…
We may be forced to adopt a set of housing options whereby
1. the basic ancient houses/apartments would have to be rented for $600.00 per bedroom per month, just to at least cover some of the cost of the property and maintenance/upgrading, AND allow a family to actually afford living less crowded and independently.
2. the executive style places could be kept at the current rental values for the higher-paid people.
Again can anyone dispute there will be less executives paying rent to Bermudians?
Can anyone state why the OBA cabinet will have control over the ARV level?
1) They will own
2) how me where this will happen
It must be allowed in the Constitution that Cabinet can control such a thing. Looks like we have both parties taking advantage of that document.
As for less executives paying rent to BDAns…..I really don’t think it’s going to sink the country or make people lose their homes.
The only Bermudians receiving less rent will be the ones who sell their multi million dollar homes. Any other Bermudian who owns rental property will be in a better position, because companies and employers will be more likely to come here and stay here.
Think about it next time you’re up a Belco pole.
Is the problem that the Cabinet has control, or that the Cabinet is OBA?
‘Cuz I’m guessing the latter…
I’m more interested in understanding how you’ve attempted to extrapolate a policy that will conservatively affect less than 0.5% of the local PRIVATELY OWNED housing stock is indicative of an attempt to remove the entire populace’s birthright to the remaining +99.5%?
Suspecting you’ll avoid a response, perhaps you could clarify the reasons for your lack of condemnation of the PLP’s decision to grant long term leases to both the Club Med and Coco Reef developers who in turn stood to earn significant profits off the taxpayers’ back by re-leasing these same properties to foreigners – especially considering WE are the beneficial owners of the cited properties in our capacity as voters/taxpayers?
Or is it ok when “they” do it?
For those with short memories, it was the PLP who allowed the 60/40 rule to be broken so HSBC could buy Bank of Bermuda. Following that it was the PLP who allowed the likes of Newstead, Tuckers Point and The Reefs to develop fractionals and allow them to be sold to non Bemudians. So much for protecting Bermuda land for Bermudians. It was the PLP who created a second class Bermudian because they had married a non Bermudian. It was the PLP who created the uncertainty relating to real estate that the OBA is now clearing up with this Bill. There is very little new here, and will not affect the majority of Bermudians. What is clear from Mr Famous’ opinion is that he is upset that some Bermudian landlords might suffer because they can no longer rely on non Bermudians to pay their rent and mortgage. How ironic when the message is why do we need expats!
Sorry Chris, why don’t you discuss the lack of work performance of you and other belco staff, or the lack of performance by the guys building the wall in Paget, this is what costs money and drives cost up. Belco staff have enjoyed being paid for not performing for years and the wall in Paget is be built by 5 persons for nearly 10 months, which any contractor would do in a month. Let the OBA have an opportunity as your beloved PLP has. At lease they don’t bite the hand that feeds them, which is holding the line of more casualties of companies leaving. What I see is that discredit, create friction, create strikes and hatred is what you and your beloved party wants to do, so that there is no investment and progress that would make the OBA look bad. Unfortunately this effects everyone, even more the persons that have nothing.
Reading this guys useless opinion is as bad as listening to the PLP talk shows !!
There is nothing wrong with the companies act but there is something very wrong with what the government is doing it will put money into the island for the real estate firms but Bermuda n her people will not profit from this for the moment it is high end houses but they will change this and before u know Poof Gone selling out Bermuda one brick at a time by any means necessary thanks OBA
A predictable and boring response from the PLP hack
“Consider how much money will not get into the economy once the number of renters in the locally-owned property market is cut significantly.” —- This guy does realize that if locally-owned rental properties are bought by exempt companies the money used to purchase them won’t just disappear from our economy, right? Instead of Auntie and Uncle getting $15,000/month to spend they now have $3,500,000 to spend. Simple passa…or so I thought… :I
Keep up the good work Famous OBA & there followers are scared of your intellect!!!
and you add to the dreamer list of people. So sad!
Their? Intellect?
Like Famous, Betty, et al, you’re a doing a good job impressing yourself mate.
Dat is true good inwestment is welcome…but …it’ like…good……depends on who we allow do it…
I have never wrote on these blogs, just read them time to time along the relative article. I am increasing seeing bloggers take sides on political lines OBA or PLP. People, you have to become critical thinkers. The immaturity is Sickening. The blogs are becoming senseless, really! It is getting to the point where I can see the blogger’s name and tell you their position before I read the blog. GROW the hell up! You all are a bunch of sheep. Think for yourself and not because Marc Or Craig told you so.
Me thinks you all have too much time on your hands. 67 comments most multiple comments from the same pseudoperson. As my grandson would say ” unacceptable”.