BERMUDA Law and Practice Contributed by: E Scott Swainson, Katrina Dickson and Erik Gotfredsen, Wakefield Quin Limited
Defects Liability Property developers will often hold buyers harm - less against defects for a relatively short period (typically six months to two years). Warranties Warranties are common where land holding companies are sold by way of amalgamation or merger (with the resulting company inheriting liabilities of the target) but wide disclosures of matters provided to the buyer and discoverable by search or inspection tend to apply. Misrepresentation Bermuda’s General Conditions of Sale state that the sales agreement contains the entire agree - ment and there can be no reliance on matters discussed outside that document, unless record - ed in clear correspondence between attorneys. Where a term is ambiguous, it is construed against the draftsman and parole evidence of intent is allowed. 2.6 Important Areas of Law for Investors Buyers should engage an experienced property specialist attorney who has access to corporate, immigration and litigation support. They should ensure that all pre-conditions are satisfied in a timely manner and that deadlines to rescind for failure to satisfy conditions are strictly observed. They should pre-consult with planners and any lender, and must bear in mind that everything is slower on an island where shipping delays can impact timelines and increase costs significantly. 2.7 Soil Pollution or Environmental Contamination Legally speaking, the successor owner is not liable for their predecessor’s contamination but practically speaking may need to remediate for health and asset protection reasons. If contami - nation emanates from other land, an action in
(beneficial owners owe higher duties than estate representatives). Most standard sales contracts exclude liability for anything not included in that agreement. Searches The purchaser’s attorneys carry out the follow - ing checks (between exchange of contracts and completion) to ensure that title is good and mar - ketable: • review the physical deeds, which must show a good root of title dating back at least 20 years; • conduct judgment and registry general searches and LTRO searches (to ensure no mortgages or registered monetary judgments exist); • verify the “Norwood Map” to ensure no cau - tions against first registration exist; • submit planning searches to ensure the prop - erty is not subject to enforcement action; and • review any leases or other disclosed encum - brances. Boundary Surveys It is market standard for the seller to carry out a boundary survey at their expense and to pro - duce a land surveyor’s report confirming there are no irregularities or encroachments. The sur - vey remains important, as the land title registra - tion confirms indicative boundaries only. 2.5 Typical Representations and Warranties Risk on Commercial Sales It is typical for caveat emptor to apply in the commercial field. Matters that are discoverable by survey or inspection are rarely, if ever, war - ranted.
164 CHAMBERS.COM
Powered by FlippingBook