THE BAHAMAS Law and Practice Contributed by: Alistair Chisnall and Erica Paine, Graham Thompson
2.3 Effecting Lawful and Proper Transfer of Title The transfer of title must be effected in writing and is done by deed. Electronic signatures are not permitted for the conveyance of real prop - erty and strict formalities must be complied with requiring original wet signatures, notarisation and (often) further authentication. Once completed, the deed must be stamped by the Department of Inland Revenue, and any applicable taxes on the transaction must be paid. Every deed must include the real property tax assessment number on the front page when submitted for stamping. The deed is then lodged in the Registry of Records to establish its priority against subse - quent purchasers, encumbrances or liens. The original deed, once recorded, is returned to the purchaser for safekeeping, together with any other original deeds in the chain of title that may change hands on closing. Whilst not yet a mainstay of Bahamian convey - ancing transactions, title insurance is becoming increasingly popular and more frequently relied upon (in lieu of a buyer’s or lender’s counsel carrying out due diligence on property to be acquired or mortgaged). The customary arrange - ment for title insurance is for a buyer or lender to be issued a commitment prior to closing, and for the actual policy to be issued once the rele - vant purchase or security documents have been stamped by the Public Treasury and recorded in the Registry of Records. 2.4 Real Estate Due Diligence As there is no land registry in The Bahamas, good and marketable title to land is determined by searches conducted against the names of predecessors in title and the seller in the Regis - try of Records, the Supreme Court Registry, the Companies Registry and the Probate Registry.
Certain searches must be conducted manu - ally, and this can have an impact on the time it takes to conclude a real estate transaction in The Bahamas due to some continuing restrictions on access to undertake such searches following the COVID-19 pandemic. In a purchase and sale transaction, Bahamian law requires that title traces back to a “root of title” (ie, to a deed not less than 30 years old), to a “Crown Grant” or to a Certificate of Title issued in accordance with the Quieting Titles Act, and that there be an unbroken chain of documentary title from such point to the seller’s ownership. During a standard purchase and sale transac - tion, it is usually necessary for a purchaser’s attorney to raise “requisitions” in respect of the title to a property, which can vary widely in nature, to ensure that areas of uncertainty and inconsistencies or defects in title are addressed by a seller or their counsel prior to closing. The majority of purchasers or mortgagees rely upon Bahamian counsel to investigate title and provide a written legal opinion certifying the good and marketable nature of the title to be acquired or held as security before closing on the transaction. The opinion is backed by the firm’s professional indemnity insurance. Howev - er, title insurance is offered in The Bahamas by a number of title insurance agents representing major international title insurance companies, and the procedure to acquire insurance is usu - ally handled by local counsel but is no different to what foreign buyers may be accustomed to in their home jurisdictions. In some cases, certain developers will provide only for title insurance to be issued to buyers under their purchase con - tracts and will not adduce title to a property or address requisitions, in order to streamline and expedite the sales process.
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