Real Estate 2020

Last Updated January 21, 2020


Law and Practice


Sagis Attorneys At Law offers a solution-oriented approach to legal services in the Caribbean, operating principally from its offices in The Valley, Anguilla, British West Indies. The lawyers concentrate on acquiring an in-depth understanding of all issues, followed by careful consideration and thorough assessment, allowing them to present legally sound and sensible options tailored to each client. The firm is a recognised leader in the areas of intellectual property, real estate and resort development, commercial and corporate transactions, litigation, banking and financing. With combined post-qualification experience of over 70 years, the team has a range of skills gathered in various jurisdictions which they put to good use representing developers, entrepreneurs, financial institutions, indigenous institutions, employers and various individuals. As a result, the lawyers are frequently involved in significant commercial and personal legal matters in Anguilla.

The main source of real estate law in Anguilla is statute law, because all land in Anguilla is registered land. The principal statute that governs any dealings relating to land is the Registered Land Act (RLA) and this statute says expressly that, unless otherwise stated therein, no other written law and no practice or procedure relating to land shall apply to any land registered under this Act insofar as they are inconsistent with this Act. However, the framers of the RLA recognised that there might be some matter relating to land that was not expressly provided for and so the RLA also provides that if the Act is silent on any matter relating to land, this shall be decided in accordance with principles of justice, equity and fairness. Therefore, in relation to any matter concerning land, the provisions of the RLA take precedence.

In relation to the registration of dealings with land, Anguilla land registration is based on the Torrens System. Under this system, the land is divided into parcels and each parcel has a separate Land Register, which is the master record of the parcel and of the dealings that have occurred in relation to it. The RLA also provides that each land register is to be divided into three sections: 

  • Section A which contain a legal description of the land (ie, the registration section, block and parcel number) as well as the particulars of the title (ie, whether the land is privately held or held by the Crown; and in the case of privately held land, whether the title is absolute or provisional); 
  • Section B which gives the name and address of the owner and whether there are any restrictions affecting their right of disposition; and 
  • Section C which lists every encumbrance and every right adversely affecting the land (eg a charge or a lease). 

Therefore, it is a cardinal principle in Anguilla real estate law that the Land Register is conclusive as to the ownership of any land and the rights adversely affecting said land, and the RLA supports this view by also according priority based on the order in which interests are recorded and making it clear that entries in the register constitute actual notice.   

The Anguilla real estate market offers a mixture of high-end vacation properties for sale or rent on the one hand and normal residential properties on the other. Nestled in the midst of these two extremes are the timeshare properties, a very recent entrant into the Anguilla real estate market. After the passage of hurricane Irma in September 2017, there was a significant downturn in the real estate market which was partly attributed to the fact that many potential investors were adopting a wait-and-see approach on account of the severity of the hurricane. In 2019, the market began to slowly rebound, and while there was reason to think that this trend would have continued in 2020, the COVID-19 pandemic will have a negative impact on this. However, in the last 12 months, there has been the acquisition of one luxury hotel brand (structured as an upstream transaction, thereby not involving any local elements) and the coming onstream of one new luxury hotel brand. 

In May 2018 Anguilla became the first country in the region to pass legislation for the issuance and regulation of a form of cryptocurrency offering called a “Utility Token”. Under the Anguilla Utility Token Offering (AUTO) Act, investors may be invited to subscribe for a utility token, which is a cryptographically digital representation of a set of rights that grants the holder thereof the contractual right to:

  • access or become a member or user of a platform operated by the issuer; or 
  • use as the sole or preferred method for payment for services or products provided or to be provided on the platform; or
  • use as a means of voting on matters relating to the governance, management and operation of the platform. 

The AUTO Act therefore paved the way for developers to raise funds for projects by applying to be registered to conduct a utility token offering in respect of their project. Additionally, the disclosures that must be made include certain elements that are standard for capital offerings but are specifically tailored to the particular type of project, thereby ensuring that subscribers are protected at every stage. 

Although the Act has been in place since May 2018, no offering has been registered to date as there are still certain administrative issues that are being worked out. Therefore, it is unlikely that this will have much of an impact in the next 12 months. 

At present, the land registration process in Anguilla is done manually and depends entirely on physical records. Additionally, there is very little sharing of information between government departments and so, a search at the Land Registry will not reveal, for example, whether planning permission has been obtained for a particular development or whether property taxes are outstanding. The government is currently in the process of updating the land registry system by the implementation of a land information system (LIS). 

The aim of the LIS is to ensure that more accurate, reliable and up-to-date information on lands in Anguilla is readily available to end-users. The LIS will also be accessible online, which means that users will have access to this information 24/7. 

In addition to the LIS, the government is in the process of revising and updating its planning permission legislation. An important feature of this will be the creation and enforcement of zoning regulations. 

Property rights fall into three main categories:

  • absolute title (freehold);
  • provisional title (freehold but with some limitation); and
  • leasehold title. 

Absolute Title

The RLA states that the registration of a proprietor with absolute title vest in that person absolute ownership of the parcel together with all the rights and privileges belonging or appurtenant thereto and free from all other interest and claims whatsoever, except:

  • leases, charges and other encumbrances, conditions and restrictions if shown in the register; and
  • unless the contrary is expressed, the overriding interest stated in the Act which does not require registration.   

However, this type of title does not relieve the proprietor of any duty or obligation they have as a trustee and does not confer the right to any mineral or mineral oils found on the land. 

Provisional Title

The registration of a proprietor with a provisional title has the same effect as the registration with absolute title, except that any right, estate or interest affecting the land prior to such registration may still be enforced against the proprietor if the land was not acquired for valuable consideration. However, the RLA provides a mechanism to convert a provisional title to an absolute one. 

Leasehold Title

The registration of a proprietor with a leasehold title vests in that person the leasehold interest described in the lease together with all the implied and expressed rights and privileges belonging to or appurtenant thereto and subject to all implied and expressed agreements, liabilities and incidents of the lease but with the proviso that if the lessor’s title is provisional or was not acquired for valuable consideration, the enforcement of any estate, right or interest affecting the land will not be prejudiced. 

Other Interests

In addition to the aforementioned, a person may be granted certain other rights or interest in relation to land: 

  • charge – this is an interest in land which is usually granted to a lender to secure repayment of monies. This interest is required to be registered;
  • easements – this allows one person to use the land of another in a particular manner or restricts the use to a particular extent. This interest is capable of being registered;
  • profits – this gives someone the right to go on the land of another and to take a particular substance from that land. This interest is capable of being registered;
  • licence – permission given by a landowner to another to perform some act in relation to the land that would otherwise be a trespass. This interest is not capable of registration but the person in whose favour it is granted may protect same by lodging a caution against the land; and 
  • caution – this forbids the registration of any disposition of the land, lease or a charge. A caution can be granted by the proprietor or placed at the instance of the Registrar if sufficient cause is shown. 

All lands must be transferred in the manner prescribed by the RLA and the RLA makes it clear that any attempt to transfer land other than in the manner prescribed shall be ineffective to pass title to the property. There are no special laws that apply to the transfers of any particular type of property.

To transfer property, the law prescribes the form of transfer that must be executed by the transferor and transferee and specifically states that the transfer is only completed when it is filed and registered at the Land Registry. The law also provides that the transfer must take effect immediately and therefore a transfer which is to take effect at the time of a future event or condition cannot be registered. Additionally, in the case of land,  any condition or limitation in the transfer which purports to restrain absolutely the transferee, or any person claiming under them, from disposing of the property or to determine the interest of the transferee on the occurrence, or failure to occur, of an event, is void and ineffective.

Moreover, the transfer of a part of a parcel will not be permitted unless the parcel is first subdivided and in the case of a transfer of lease (unless the contrary is stated), there is an implied warranty that the obligations under the lease are up to date and that the transferee will perform all the covenants under the lease.   

The RLA also permits the transfer of land or a lease that is subject to charges but this implies agreement on the part of the transferee to pay the sums secured by the charge and to indemnify the transferor if said sums are not paid. 

Due Diligence and Status of the Title

Real estate due diligence, if looked at in the context of the status of the title, is fairly straightforward. The RLA provides that no person dealing or proposing to deal with a proprietor for valuable consideration is required to enquire into the circumstances in which that proprietor was registered. Moreover, interests in property are accorded priority based on the order in which the instruments which led to their registration were filed with the Land Registry and entries in the register constitute actual notice. Additionally, any person can search the register for a particular parcel, or any instrument or plan filed in relation to that parcel, and take copies of what is recorded there. So, most persons would simply conduct a physical search of the register. However, a physical search is not conclusive as dealings requiring registration may have been submitted and not yet registered. For this reason, the law makes provision for a person to obtain what is called an “Official Search Certificate” whereby on application, the registrar issues a certificate setting out the particulars of all subsisting entries in the register as well as whether any dealings requiring registration are pending.

Due Diligence and Planning Permission

If due diligence is looked at in the much wider context of planning permission, use restriction or existence of nuisance or other hazards affecting the land, the “Official Search Certificate” is very limited because it only relates to matters that are required to be registered at the Land Registry. It will therefore not show whether planning permission has been issued in respect of the particular property, or whether any taxes are outstanding in relation to the property, or what the property can be used for. To get this information, separate searches would have to be conducted at the various other government departments, eg, Physical Planning and Inland Revenue.

There are usually no representations or warranties as to title and no seller warranty or representation is provided under the RLA in relation to the sale of real estate per se, as buyers are expected to do all the relevant searches and to make all the desired inspections they need in order to satisfy themselves as to the state of the property. However, the RLA does provide that any person suffering damage by reason of:

  • any mistake or omission in the register other than one which occurred when the land was first registered; or
  • any error in the Official Search Certificate or in a copy of any register, document or extract from any document or plan certified as being true;

shall be entitled to be indemnified by the government. However, no indemnity is to be paid to any person who has themselves caused or contributed to the damage or who derives title, other than as a bona fide purchaser, from a person who has caused or substantially contributed to the damage.

Therefore, if warranties and representations are given, this is typically done as a matter of contract and where a development which is not yet constructed, or which is being constructed, is being purchased. 

The most important areas of law for an investor to consider when purchasing real estate are:

  • user – whether the property can be used for the purposes for which it is intended;
  • planning – whether the type and scope of the intended development would be permitted;
  • tax laws – the financial implication of the investment, not only in terms of the initial acquisition but also in respect of the proposed development; and
  • real estate law – the security of the title and whether there is likely to be any restriction on alienation of the property in the event that becomes necessary and the likely cost implication of same.

While the law will seek to hold the person, by whose act or default the pollution or environmental contamination arose, principally responsible to remedy it, if that person cannot be found, the responsibility may fall on the occupier or owner of the premises. Additionally, an owner or occupier who did not cause the pollution or contamination but who knowingly permitted it to continue when it was within their power to stop it, is guilty of an offence.

Anguilla currently has no developed system of zoning but the existing planning legislation allows the government to determine the types of development that can be undertaken in a particular area. Arising from this, the department has created the Land Use Plan which, while not having the force of law, guides the planning authority in determining whether or not to grant planning approval for a particular development. This Land Use Plan is available for viewing at the Department of Physical Planning and, as such, a buyer who wants to get an idea of whether the land use in question is likely to be approved, can consult this plan. 

Moreover, where the buyer is a foreign national, they need a special licence to purchase property, and when applying for this licence, the buyer must show that they have approval (either full approval or approval in principle) for the development they are proposing.

The Anguilla constitution provides that no interest in or right over any property of any description may be compulsorily acquired, and no such property may be compulsorily taken possession of, except by and under the provision of a written law which: 

  • provides the principles on which, and the manner in which, adequate compensation is to be determined;
  • requires the prompt payment of such adequate compensation;
  • prescribes the manner in which the compensation is to be given; and
  • prescribes the manner of enforcing the right to such compensation. 

The Land Acquisition Act sets out the specific rules governing the compulsory acquisition of land by the Crown and provides that: 

  • if the Governor-in-Council considers that any land should be acquired for a public purpose, the governor may, with the approval of the House of Assembly, cause a declaration to that effect to be made by the secretary to the Executive Council in the manner provided for by this section, and the declaration shall be conclusive evidence that the land to which it relates is required for a public purpose; 
  • every declaration shall be published in two ordinary issues of the Gazette and copies thereof shall be posted on one of the buildings (if any) on the land or exhibited at suitable places in the locality in which the land is situated, and in the declaration the following particulars relating to the land which is to be acquired shall be specified:   
    1. the district in which the land is situated;
    2. a description of the land giving the approximate area and such other particulars as are necessary to identify the land;
    3. in cases where a plan has been prepared, the place where, and the time when, a plan of the land can be inspected; and
    4. the public purpose for which the land is required; and
  • upon the second publication of the declaration in the Gazette, the land shall vest absolutely in the Crown, and the authorised officers and their agents, assistants and workmen may enter and take possession of the land accordingly.

As soon as the publication is made, the authorised officer of the Crown shall enter into negotiations (or further negotiations) with the landowner with a view to agreeing upon the amount of compensation to be paid. If no agreement is reached, the issue of the compensation should be remitted to a Board of Assessment, which will be appointed to determine the issue. The Board of Assessment shall comprise a judge of the High Court, who is also the Chair, a representative appointed by the Crown, and the landowner. After due inquiry into the matter (which will involve hearing representations from both side), the Board will render its decision on the compensation to be paid. The decision of the majority shall be the decision of the Board. The sum awarded is to be paid promptly and in cash and, if not paid, is enforceable by a suit against the attorney general. 

Stamp duty of 5% of the consideration (or the value of the land, if higher than the consideration) is typically paid on transfer but if the transferor and transferee are both Anguillians and the relationship of parent/child, brother/sister, wife/husband, grandparent/grandchild exists between them, the stamp duty rate is reduced to 1%. If the transaction is structured as a purchase of shares in a company that owns the property, the stamp duty on the transfer of the shares is still 5% of the value of the land. 

If the real estate is being purchased by a foreigner, an Alien Landholding Licence (ALHL) is required and stamp duty is payable on that as well. Where the property being purchased is freehold land, the stamp duty on the ALHL is 12.5% of the value of the land. If the property being purchased is leasehold, stamp duty ranges between USD500 and 12.5% of the value of the land depending on the length of the lease. Where shares are purchased in a property company that is classified as a foreign company, stamp duty on the ALHL is 12.5% of the value of lands held by the company. 

However, in an effort to promote investment in real estate, the government has passed legislation granting a temporary reduction in stamp duty on transfer and on the ALHL for all transactions occurring between 1 January 2020 and 31 December 2021. This initiative by the government effectively reduces the stamp duty payable on the transfer and on the ALHL by 50%.

The law is silent on who is to pay the stamp duty on the transfer, but the usual practice is that this is paid by the transferee. The minimal recording fee payable to register a transfer is also usually paid by the transferee. 

Anguilla law prohibits foreign ownership of real estate unless an ALHL has been obtained and it makes it clear that any land held without this licence is liable to forfeiture. The prohibition applies equally to foreign nationals or a company in which more than one third of the shares or debt security is owned by foreigners. The obligation to obtain an ALHL also applies where the foreigner purchases shares or is granted debentures in a property-owning company if the amount of said shares or debentures exceeds one third of the total shares or debentures issued by that company. The law also provides that where a company has been granted an ALHL, any transfer of shares in that company without prior approval is void and of no effect. 

Acquisition of real estate is typically made through loans from a financial institution or self-financing. However, various other financing options may be used depending on the value of the real estate being acquired. Sometimes, the financing is syndicated and at other times, separate lenders will have an agreement for the debt to rank pari passu, regardless of the date of creation, or for the debt to be subordinated to another debtor.   

The typical security created by a commercial real estate investor is a charge. This grants the lender, among other things, the right to sell the property in the event of default or breach of other obligations in the loan. If the development is a resort development, a lender will also seek to obtain a debenture over the fixed and floating assets of the operating entity (this includes furniture, fittings and equipment, book debts and receivables), and assignment of all rental and other related income from the operation of the resort. A lender may also take a charge over the shares of the company that owns the resort. 

There are no restrictions on granting security over real estate to a foreign lender, or on the repayment made to foreign lenders, but if the security to be taken is charge over real estate, said lender will require an ALHL in order to validly hold this security. 

A tax of 1% of the amount secured is payable on the granting of a security interest over real estate. 

Apart from ensuring that the usual corporate formalities are complied with, and provided that the entity is not insolvent or will not become insolvent by granting said security interest, or the realisable value of its assets after giving security would not be less than its liabilities, there are no other requirements that must be complied with for an entity to grant a security interest over real property. 

A lender wishing to enforce its security over real property on account of default must serve a notice, called a Statutory Notice, to the registered proprietor of the property of its intention to do so. This default must have existed for at least one month and the Statutory Notice must give the registered proprietor a period of 90 days within which to remedy the default. The Statutory Notice should also state that if the sum is not paid within the 90-day period, the lender will exercise its right to sell the property or appoint a receiver of the income from the property. The lender is not permitted to exercise both remedies, and if the Notice states one remedy and a decision is made to pursue the other, a new Notice must be issued. 

It should be noted that the sale must be a sale by public auction (as opposed to a private sale) and that the lender must exercise its power of sale in good faith and must have regard to the interest of the charger. The law also expressly preserves the proprietor’s right to redeem the property at any time before it is sold and it makes it clear that the lender shall not be entitled to foreclose on the property or to enter into possession by virtue of the fact that the loan is in default. 

The law also provides that the restriction on the power of sale may be varied by the registered proprietor and the lender, but that such a variation may not be acted upon unless the court, having regard to the circumstances and the conduct of the parties, so orders.

Under the law of Anguilla, a debt which is secured against real property is accorded priority based on the date of registration. Therefore, an existing secured debt has priority over a newly created debt. However, it is possible for existing secured debt to be subordinated to a newly created debt. This can happen by agreement or by operation of the law where the existing security is held to be invalid. It should be noted also that further advances made to a borrower under the terms of an existing debt, will be subordinated to a newly created debt if the right to make those advances was not expressly noted in the Register.

A lender who is merely holding or enforcing a security over real estate would not be liable to remedy an environmental hazard or nuisance it did not cause, but given that the obligation to remedy same can pass to the purchaser of this property, a lender may be hampered in its enforcement efforts if this fact is known.  

A security interest in any property which is created for the purpose of defrauding creditors may be set aside at the instance of the defrauded creditor.  Also, a lender who takes on a security interest from an entity that grants it contrary to the provision of its governing law, may not be able to rely on it if it is found that it acted in bad faith or was aware of the contravention. 

Where loans are issued by a foreign financial institution, it is not uncommon to see them tied to LIBOR and it appears that once this index expires at the end of 2021, there will be certain accounting challenges for these borrowers and lenders. However, local financing is not generally tied to LIBOR, so it is not anticipated that this will cause any real issues locally.

The Land Development (Control) Act (LDCA) and the regulations made thereunder, regulate all development in Anguilla. The entity tasked with the implementation of the provisions of the LDCA is the Land Development Control Committee (LDCC) and one of its principal duties is to rule on all applications for permission to develop lands. Under the LDCA the Governor-in-Council may designate certain areas for a particular type of development. 

The Building Act regulates the design, appearance and construction or renovation of any building and the authority tasked with the administration of this Act is the Building Board. The regulations made under the Building Act provide specific guidance on the construction, siting, layout, draining, sanitation and removal of buildings. The Building Board’s primary duty is:

  • to receive and consider all applications for building works;
  • to grant approval for such works; and
  • to monitor to ensure that construction is in accordance with the approved plans. 

The LDCC regulates the development and designated use of individual parcels of real estate, as all applications for planning permission must go to them for approval. 

Any proprietor wishing to develop land or to complete a major refurbishment must apply to the LDCC for planning permission. Once the application is duly submitted and the relevant fees paid, it will be considered by the LDCC. If the development falls into the category of development for which consultation is required, the LDCC will defer the decision on the application until the consultation process is completed. If a project is to be submitted to public consultation (for example where the development is inconsistent with the character of the neighbourhood), third parties will have the right to participate in the consultation process and to object to the proposed development. A decision will be made by the LDCC thereafter. 

If permission is granted for the development, the next step is to obtain approval to build from the Building Board. Third party involvement is not usual at this stage. Only after this approval is obtained, can the proprietor commence construction. 

There is a right to appeal if planning permission is refused. The applicant may apply to the executive arm of the government within 30 days of the refusal and the decision may either be confirmed or overturned.

Major real estate development projects in Anguilla are usually undertaken in accordance with a memorandum of agreement between the developer and the government. This memorandum of agreement usually details the scope of the development to be undertaken (type of development, number of units and the intended date of completion); any concessions to be granted to the developer (for instance, waiver of stamp duty on the ALHL or customs duties on the importation of building materials etc); provisions related to any third-party financier that the developer intends to use and any concessions made to them; the use of foreign labour; and a commitment from the government to expedite, consistent with existing rules and policies, the various permits and approvals required in connection with the development. 

Restrictions on development and designated use are enforced by way of stop notices, orders to rectify, and in extreme cases, a notice to demolish. 

Investors usually hold real estate in a company, created either locally or overseas. Prior to 2019, the only type of locally created company that could hold real estate was an entity formed under the Companies Act. However, recent changes to the law mean that any entity formed in Anguilla can hold real estate in Anguilla. 

A foreign entity can also hold real estate in Anguilla, as long as it is registered under the Companies Act as a foreign company. 

The main features of the constitution of each of these entities is:

  • they can all own property in Anguilla;
  • they have limited liability; and
  • their affairs are administered by directors/managers who are expected to abide by the rules and regulations that are prescribed for each of these entities.

The main difference between a company formed or registered under the Companies Act of Anguilla and one formed under any other laws of Anguilla is that the former is subject to more regulatory oversight, as information on the directors and shareholders must be filed with the Companies Registry. However, this will change if the proposed implementation of a public register of beneficial ownership passes into law. 

There is no minimum capital requirement for a company to invest in real estate.

No specific governance requirements apply to an entity which is investing in real estate. The same governance requirements apply, whether an entityis investing in real estate or carrying out any other type of business. 

Annual maintenance costs for each entity will differ depending on the entity and what services are being done by the registered agent on its behalf. Moreover, apart from the government fees (which are fixed), fees for registered office/registered agent services differ from agent to agent. However, the standard registered office/registered agent fees are approximately USD500 and the government fees roughly USD300. Additional fees may be payable if the registered agent performs other services. 

A person who is not the owner of a particular piece of real estate may have the exclusive right to occupy and use that real estate through the granting of a lease. Such lease may be for a definite period (usually up to a maximum of 99 years) or for the life of the lessor or the lessee, or for an indefinite period (a periodic tenancy). However, where no term is specified in the lease or where exclusive occupation is granted without any agreement in writing, that occupation is considered a periodic tenancy. 

Anguilla law does not make any distinctions between different types of commercial leases. What distinguishes one commercial lease from another is the proposed use and the term. 

Except for certain minimum requirements imposed on the lessor’s right to forfeit (terminate) the lease on account of the lessee’s breach, or to raise the rent or to terminate the tenancy in the case of a residential or office lease, the parties are free to negotiate the terms of the lease.

As it relates to the lessor’s right to forfeit, the law states that notwithstanding anything contained in the lease to the contrary, a lessor will not be allowed to forfeit the lease unless and until the lessor has served notice on the lessee specifying the breach, and if the breach is capable of remedy, has given the lessee reasonable time to remedy same. A lessee who has been served with such a notice has the right to apply to the court for relief against the forfeiture. Additionally, if the Rent Restriction Act applies to the premises, a lessor’s ability to raise the rent or recover possession of the premises is restricted by that Act. 

The usual terms for business premises leases will differ depending on the type of business being undertaken on the premises. However, business premises leases typically range between five and 25 years and lease payments, though often expressed as a yearly obligation, are made payable monthly. In terms of the obligation to repair the premises, this obligation is usually on the landlord, with the tenant’s responsibility limited to doing those things that are considered part of normal occupancy of premises, eg, replacing locks, fuses or light bulbs, or unblocking the sink. Where the lease is for a longer period, however, some landlords impose the obligation on the tenant to take out insurance for the entire premises. 

The parties are free to determine whether the rent payable remains the same during the term of the lease. Typically, though, the rent is fixed for the first five years and then incrementally increased from year six onwards. 

If the premises are rent-controlled, any increase above 15% must be approved by the rent commissioners. If it is not rent-controlled, the parties are free to determine same. 

At present, no VAT or equivalent is paid on rent.

If the lease is one that is required to be registered, the tenant may be required to pay stamp duty and registration fees. 

The cost of maintaining parking lots and gardens are typically included as part of the rent each tenant has to pay. 

Telecommunication services in a property occupied by several tenants are usually contracted by each tenant individually. Utilities such as water and electricity are handled differently. In some cases, each unit will be separately metered and each tenant will receive a bill related to their unit. In other cases, there is one bill for the entire complex and the lessor, using a pre-determined mechanism, apportions the bill between the different units. 

The parties are free to determine who will insure the real estate and what casualties will be covered. The usual casualties are fire and extended peril (hurricane, earthquake, riot, etc). Where a premises is likely to have invitees and guests, public liability is not uncommon. If the landlord has other businesses on the premises, business purposes and business interruption may be requested. However, in the absence of any agreement expressed in the lease, there is no obligation on any party to insure. 

Typically, the lease will contain an express provision for use of the real estate and failure to abide by it will make the lease liable to forfeiture. Additionally, unless there are provisions to the contrary in the lease, the law implies certain restrictions on how the tenant uses the property. For instance, a tenant is not allowed to transfer, or charge or sublet any part of the property without the landlord’s consent and the RLA provides that where a lease has been presented for registration and it contains such a restriction, a notice of this is to be made in the encumbrance section of the register and thereafter, no dealing with the lease requiring registration will be permitted without the prior written consent of the lessor. 

The tenant is permitted to make alterations or improvements to the real estate if the lease so provides. In the absence of an express provision in the lease, the tenant is not permitted to make any alterations or improvements.

There are no specific regulations or laws that apply to leases of a particular category. 

Unless the lease says otherwise, the fact that the tenant goes into liquidation or is adjudicated bankrupt does not automatically terminate a lease but it makes the lease liable to forfeiture at the instance of the lessor.

The typical form of security used by a landlord to protect against a tenant’s failure to meet its obligations under the lease is a third-party guarantee. 

A tenant does not have a right to continue to occupy a property after the lease has expired. However, if the tenant remains in occupation after the lease has expired and has paid rent (which has been accepted by the landlord without any reservation of rights) the law considers that a new tenancy has arisen. This new tenancy will be on the same terms and conditions except that the duration will now be periodic, and the length of the period is determined by how the rent is paid (eg, monthly or yearly etc). 

There are no legal measures that a landlord can take to ensure that a tenant leaves on the date the lease expires but if the tenant remains in occupation, the landlord could forthwith file an action in court to recover possession of the premises. 

A tenant has no right to assign its leasehold interest or sublet or give up possession of any part of the leased property without the landlord’s prior consent. If the lease does not expressly forbid assigning or subletting, the law states that the tenant may assign or sublet, but only with the consent of the landlord. The law further states that the landlord should not unreasonably withhold this consent but gives no guidance as to what would be considered unreasonable. Consequently, what is unreasonable will depend on the circumstances. 

The events that typically give rise to a landlord exercising the right to terminate the lease are usually non-payment of rent or breach of any of the covenants contained in the lease, such as those relating to repair, or use or assigning and subletting. The events that usually give rise to a tenant exercising its right to terminate are failure on the part of the landlord to repair the premises or to ensure that the tenant has quiet possession of the property.

A lease that is for a period exceeding two years, or for the life of the lessor or lessee, or which contains an option to renew for a further term and both the original and the further term when taken together exceed two years, must be registered at the Land Registry. To register a property, a duly executed lease/sublease form must be filed. Stamp duty is payable on the lease at a rate of 0.05% of the yearly rent times the number of years. Recording fees of USD18.60 are also due and payable. The law is silent on which party should pay but the usual practice is that the tenant pays. 

A landlord has the right to forfeit (or terminate) the lease on breach of any covenant in the lease but this right can only be enforced by court action. This means that the landlord cannot forcibly evict the tenant and must file an action for recovery of possession. This process is likely to take no less than three months and if the tenant seeks relief against the forfeiture, the process could take up to six months. 

A third party, including the government or other local authority, has no right to terminate a lease to which it is not a party. Successors-in-title may however exercise the right of termination.

Construction projects are usually priced on a combination of fixed price and costs of work. Items such as design, approval and permits, project management and labour are usually billed at a fixed price. On the other hand, materials and equipment will be billed at cost. However, it is not unusual to see a construction contract which provides for the delivery of the project turnkey for a fixed price.

Responsibility for a project is usually allocated between two groups: those responsible for design and implementation; and those responsible for the construction.  The project manager then acts as owner representative to ensure that each group is doing what it is contracted to do and that construction is being carried out according to the approved plans and drawings. 

The four main types of risk affecting a construction project are labour shortage and productivity issues, health and safety hazards, subcontractor default and changes to orders. To mitigate against these risks, owners and contractors use a number of devices such as performance bonds, indemnifications, warranties, limitation of liability and waivers of certain types of damages. These methods have been used with varying degrees of success to mitigate the risk identified. 

The parties are free to agree on the terms of the construction contract, including the circumstances in which compensation may be payable and in what amount. 

It is not uncommon for owners to seek additional forms of security to guarantee a contractor’s performance and this is typically done using performance bonds, letters of credit, guarantees and third-party sureties.

Contractors are not permitted to place a lien or otherwise encumber a property in the event of non-payment. A contractor will only be entitled to encumber a property if the contractor has obtained a judgment for the amount owed.

Although the law does not specifically require the issuance of a certificate of occupancy, the electricity will not be connected to any development until such time as the Building Department confirms that the development is fit to be occupied. 

VAT is not payable on the sale of corporate real estate at this time. 

If the acquisition of a real estate portfolio is structured as a transfer of the real estate to another entity, it is not possible to mitigate the tax liability on the transfer. The same applies if the acquisition is structured as a sale of shares in the land-owning entity. However, if the real estate portfolio is held by a company whose shares are held successively by a series of companies, it may be possible to mitigate the tax liability by structuring the transaction as an acquisition of shares in one of the upstream entities. This is because the tax will not be based on the value of the real estate. 

There is no municipal tax payable on the occupation of a business premises. 

Anguilla currently has no income tax, withholding tax or capital gains tax. 

Anguilla currently has no income tax or capital gains tax.

Sagis Attorneys At Law

Sagis House
P.O. Box 14
The Valley, AI-2640
British West Indies

+264 497 2447
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Law and Practice


Sagis Attorneys At Law offers a solution-oriented approach to legal services in the Caribbean, operating principally from its offices in The Valley, Anguilla, British West Indies. The lawyers concentrate on acquiring an in-depth understanding of all issues, followed by careful consideration and thorough assessment, allowing them to present legally sound and sensible options tailored to each client. The firm is a recognised leader in the areas of intellectual property, real estate and resort development, commercial and corporate transactions, litigation, banking and financing. With combined post-qualification experience of over 70 years, the team has a range of skills gathered in various jurisdictions which they put to good use representing developers, entrepreneurs, financial institutions, indigenous institutions, employers and various individuals. As a result, the lawyers are frequently involved in significant commercial and personal legal matters in Anguilla.

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