SAINT KITTS CIU TO IN­STATE REAL ES­TATE ES­CROW: PAY­OUTS CON­TIN­GENT ON DEVEL­OP­ERS AC­TU­ALLY DE­VEL­OP­ING

The Star (St. Lucia) - Business Week - - CITIZENSHIP BY INVESTMENT - BY CHRIS­TIAN NESHEIM, IN­VEST­MENT MI­GRA­TION IN­SIDER

The Saint Kitts & Ne­vis Cit­i­zen­ship by In­vest­ment Unit re­ports it has been con­sult­ing with devel­op­ers over new reg­u­la­tions in a bid to pre­vent im­proper pro­mo­tion and pro­ce­dures re­lated to the pro­gramme’s real es­tate op­tion.

The devel­op­ers, said the CIU, had pledged to en­sure that their pro­mo­tion of real es­tate would re­flect the statu­tory re­quire­ments — prop­erty pur­chases at no less than US$200,000 — while the CIU, in turn, made clear it “would not ac­cept any ap­pli­ca­tions for pro­cess­ing that re­flect prices that are con­trary to the cur­rent reg­u­la­tions” and that it would “vig­or­ously en­force the reg­u­la­tions gov­ern­ing the

CBI pro­gramme and that the depart­ment has been in­ves­ti­gat­ing and in­tends to act de­ci­sively against those whose ac­tions un­der­mine the in­tegrity of the pro­gramme.”

The an­nounce­ment fol­lows months of de­bates around in­ap­pro­pri­ate — and pos­si­bly crim­i­nal — prac­tices re­lat­ing to the real es­tate op­tion, where sev­eral devel­op­ers and agents stand ac­cused of sell­ing CBIqual­i­fy­ing real es­tate for less than the man­dated min­i­mum, some­times with no real in­ten­tion to com­plete projects, leav­ing the is­lands with sev­eral “ghost de­vel­op­ments”.

DE­VEL­OPER PAY­OUTS SUB­JECT TO PROJECT COM­PLE­TION

The govern­ment pro­poses to amend the Es­crow Bill, which would re­quire ap­pli­cants’ funds for prop­erty ac­qui­si­tions be placed in an es­crow ac­count at the time of ap­proval in prin­ci­ple, to be re­leased ac­cord­ing to a pay­out sched­ule cor­re­spond­ing to dif­fer­ent stages of project com­ple­tion.

Such a mea­sure would both pre­vent agents and devel­op­ers from sell­ing prop­erty at dis­counted rates and en­sure that de­vel­op­ments do not go un­com­pleted.

Re­act­ing to the news, Sam Bayat of Bayat Le­gal ex­pressed cau­tious op­ti­mism about the pro­posed amend­ments.

“This is ex­cel­lent news, es­pe­cially the pay­ment of es­crow as per pre­de­fined rules,” he told In­vest­ment Mi­gra­tion In­sider in a mes­sage, high­light­ing the im­por­tance of mak­ing pay­outs to devel­op­ers con­tin­gent on their ac­tu­ally de­vel­op­ing prop­er­ties.

“We saw sim­i­lar prob­lems in Dubai dur­ing the prop­erty crash a decade ago; many devel­op­ers took down-pay­ments and de­posits to start new projects, and also used these funds for mar­ket­ing, leav­ing projects without funds [to ac­tu­ally com­plete the con­struc­tion].”

PRO­POSED AMNESTY PE­RIOD FOR UNDERPAYING AP­PLI­CANTS TURNED IN­FOR­MANTS

Bayat also be­lieves the CIU should not stop at merely pre­vent­ing il­le­gal dis­count­ing prac­tices in the fu­ture; there should also be con­se­quences for past trans­gres­sions.

“This new es­crow ac­count, if well­con­ceived, will only solve fu­ture real es­tate ap­pli­ca­tion is­sues, but what about the hun­dreds of ap­pli­cants who made in­ad­e­quate pay­ments in the past?” asked Bayat.

“We need an in­quiry into all past real es­tate ap­pli­ca­tions or the unit must ad­vise in­di­vid­u­ally each ap­proved real es­tate ap­pli­cant that, if they paid less than the min­i­mum amount, they have a set time to come for­ward and pay the dif­fer­ence without reper­cus­sions and name those re­spon­si­ble for ad­vis­ing them to pay less.”

The devel­op­ers, said the CIU, had pledged to en­sure that their pro­mo­tion of real es­tate would re­flect the statu­tory re­quire­ments — prop­erty pur­chases at no less than US$200,000 — while the CIU, in turn, made clear it “would not ac­cept any ap­pli­ca­tions for pro­cess­ing that re­flect prices that are con­trary to the cur­rent reg­u­la­tions”

Sam Bayat, CEO of Bayat Le­gal Ser­vices

Newspapers in English

Newspapers from Saint Lucia

© PressReader. All rights reserved.