BERMUDA Law and Practice Contributed by: E. Scott Swainson, Andrew Morgan and Erik Gotfredsen, Wakefield Quin Limited
Individual trustees are most often (Bermudian) friends and family, and act without remuneration.
The same can be said of residential premises, except those that are subject to rent control. Rent Control Where rent control applies, the rent cannot be increased above the “lawful rent”, except with the consent of the Rent Commissioner. There are limited circumstances where a tenant may agree an increase but they cannot be a new/incoming tenant. Should a landlord charge in excess of a lawful rent, the tenant may recover the excess for a period not exceeding two years, and a landlord may not recover possession whilst sums are owed. 6.4 Typical Terms of a Lease Typical Length Most commercial leases of new buildings (grade A space typically rented to international business enter - prises and their service providers) are for terms of five, ten or 15 years. Such leases will often include con - tractual rights of renewal (contingent upon advance notice, strict compliance with covenants and a rent review). Other commercial leases tend to be for a mini - mum term of two years. Limitations on Length of Term Companies may rent property for business purposes for up to 50 years. They may also rent property to house employees for up to 21 years. Longer leases and leases for non-business uses require government approval. Non-Bermudian individuals require a licence to acquire land by lease for terms in excess of five years. Many condominium managers will only approve sub - leases that are for more than six months (to avoid vacation rentals) but do not exceed two years. Maintenance Many office and retail leases are granted on full repair - ing and insuring terms that allow the landlord to recov - er all servicing costs in addition to the rent. Lower grade and older premises are more likely to specify an all-in rent.
6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time Conditional Agreement Typically, parties will enter into an agreement to pur - chase or rent, and may agree temporary rights of occupation whilst formalities are addressed. Fronting Heavy penalties (including USD1 million fines and prison terms) apply where a person is found to be fronting for a foreign national (fronting is assuming the rights of an owner without securing the required licence). Therefore, it is important that any temporary arrangements do not exceed the term that might have been allowed without a licence. It is also important that a foreign investor does not secure the ability to profit from an unlicensed activity, should the relevant licence to do business in Bermuda not be received. If in doubt, the Department of Immigration may be con - sulted and licences in principle are sought in some cases. 6.2 Types of Commercial Leases Commercial Leases There is no typical commercial lease. A landlord of a multi-unit building may have a preferred form. Stan - dalone leases tend to vary according to the law firm drafting the lease. Condominium Leases These are often very similar in appearance, and will include a landlord covenant to ensure the same core terms are imposed in all future grants for the relevant estate. Residential Leases These tend to be prepared informally, by the landlord or their rental agent. 6.3 Regulation of Rents or Lease Terms Commercial and Residential Rents There are no limitations on the recovery of commer - cial rents, including due to the impact of a pandemic.
69 CHAMBERS.COM
Powered by FlippingBook