Real Estate 2024

Last Updated April 30, 2024

St Kitts & Nevis

Law and Practice

Authors



Joseph Rowe, Attorneys-at-Law is a boutique law firm with offices in Nevis, St Kitts and Grenada with attorneys-at-law also qualified to practice in the island of Anguilla. The firm comprises a 15-person professional team, who pride themselves on having a client-focused law practice providing quality legal services with a view to achieving the best results possible for its clients. Its legal expertise and professional services include citizenship by investment (investment migration), offshore companies and trusts, real estate transactions (including commercial, residential, hotel and investment real estate), maritime/admiralty law and civil and commercial litigation. Recent engagements include providing legal representation for the first geothermal power plant project on the island of Nevis; acting for developers of a commercial complex; representing the developer of resort development projects; successfully securing compensation for a multi-million-dollar beachfront property that was compulsorily acquired by the government in Nevis; and representing multiple purchasers and vendors of luxury real estate within a 5-star resort villa development.

St Christopher and Nevis (St Kitts and Nevis) has two systems of land ownership that operate side by side: the unregistered system (by which one acquires a deed) and the registered system (by which one acquires a Certificate of Title, or COT). The relevant pieces of legislation are:

  • the Conveyancing and Law of Property Act (unregistered system); and
  • the Title by Registration Act (registered system).

The Stamps Act addresses taxes payable in relation to the transfer of real estate. Non-citizens who wish to invest in real estate would be subject to the Aliens Land Holding Regulation Act and require an aliens land holding licence (ALHL) to hold an interest in real estate. For non-citizen investors, there is also the option of owning land (without requiring an ALHL) through participation in the Citizenship by Investment (CBI) programme, which is governed by the Citizenship by Investment Act.

In the past 12 months, the authors have noted an increase in the number of lifestyle buyers in the real estate market in St Kitts and Nevis. Persons are choosing to purchase a 2nd home in St Kitts and Nevis and the authors noted more persons moving to the islands to live.

At the same time, the authors have noted a marked decline in the purchase of real estate as a qualifying investment for the citizenship by investment programme. The reason for this may be the new Saint Christopher and Nevis Citizenship by Substantial Investment Regulations, 2023 (SRO No 26 of 2023) gazetted on 27 July 2023, which increased the minimum qualifying real estate investment for citizenship from USD200,000 to USD400,000 for a condominium and for a stand-alone home or private home, the minimum investment was increased from USD400,000 to USD800,000. This has placed St Kitts and Nevis’ investment threshold for Citizenship by Investment purchasers significantly above the minimum investment required for CBI in its Caribbean counterparts. However, as recent as 22 March 2024, the heads of state of 4 of the 5 CBI Caribbean countries, namely, St Kitts and Nevis, Grenada, Antigua and Dominica signed a Memorandum of Understanding committing to co-operate more closely on matters related to the Citizenship by Investment programme, including pricing. This new commitment should benefit the Caribbean CBI jurisdictions significantly, including St Kitts and Nevis, as the prior practice of reducing the minimum investment requirements to be competitive in the CBI market should be a thing of the past.

The authors have not seen the real estate market in St Kitts and Nevis being adversely affected by rising inflation or increases in interest rates. To the contrary, the authors have seen an increase in real estate sales post-COVID-19. The authors have had buyers express that COVID-19 has shown that life is short and they would rather spend time in the Caribbean than in colder climates. Whatever the motivation, the real estate market in St Kitts and Nevis has been doing fairly well post-COVID-19.

Recent Developments

  • In 2019, the government of St Kitts and Nevis signed a deal with Medici Land Governance, Overstock.com’s blockchain subsidiary, to use blockchain and other technologies to incorporate high-resolution aerial images of the Federation into the Land Registry in developing a cadastral survey system. However, to the authors’ knowledge, this project has not been completed.
  • In January 2020, the government passed the Virtual Assets Act. However, at present, licensing pursuant to the Act has been suspended.
  • On 31 March 2021, the Eastern Caribbean Central Bank (ECCB) launched the ECCB DCash Project in St Kitts and Nevis. DCash was the first digital currency to be used by a monetary union. The DCash Pilot platform operations were closed on 12 January 2024. The ECCB has announced that it will be transitioning to DCash 2.0, “a more advanced and user-friendly version” of its digital currency service. DCash is a blockchain-based, central bank-issued digital currency, which allows persons to complete transactions using a digital version of the Eastern Caribbean dollar.

Use of Disruptive Technologies

It is expected that the emergence of blockchain, decentralised finance (DeFi), proptech and other disruptive technologies would improve the functions of real estate investors, developers and lenders. However, since the concept of disruptive technology is still relatively new, these technologies have yet to emerge as a preferred or even often-used alternative in St Kitts and Nevis.

Cryptocurrency is, however, accepted by the Citizenship by Investment Unit (CIU) as a valid currency for investment. An applicant is simply required to provide documentation in support of the ownership of their cryptocurrency wallet and provide the USD value of the wallet. In the event the applicant is unable to provide a wallet, they may provide the following for consideration by the CIU:

  • a letter from a cryptocurrency stock exchange, or other institution that provides digital assets services. The letter should be similar to a bank reference letter (stating the applicant’s name and address and the period of time the applicant has been a customer); and
  • the applicant’s account summary which sets out the cryptocurrency held and the equivalent USD value.

Once the applicant is approved, they would be required to convert the cryptocurrency to USD then wire the investment funds to the relevant bank account.

Cadastral Survey Mapping

At present, searches in the Land Registry are conducted by the name of the property owner. Consequently, if the property owner is unknown, the search process can be tedious and even, sometimes, futile. At times, the property owner may be identified by searching known property owners in the area and reviewing the owners on the boundaries (provided a fairly recent survey of the land was done). The proposed cadastral mapping system (see 1.2 Main Market Trends and Deals under “Use of Disruptive Technologies”) will give an identifying number to each lot so that searches may be conducted by lot numbers, removing the requirement to know the identity of the registered property owner to conduct a property search.

There is a project by which a team of specialists used drones to conduct the cadastral mapping of St Kitts. However, it will still take time to formalise the search process since persons may be required to come forward to claim ownership of land in respect of which there is no “paper” owner. There is some prevalence of land ownership without any formal paperwork as property is commonly passed down from generation to generation without the registration of any transfer document.

Digitisation of the Land Registry

The proposed digitisation of the Land Registry aims to create a digital copy of all land titles and deeds in St Kitts and Nevis and the conduct of searches online. A Land Administration Information System (LAIS) is in the development phase. A pilot of the programme was shared with legal practitioners for a brief period. It is expected that the LAIS will be taken to completion and the Land Registry would be fully digitised.

Private Home Sale Option – Citizenship by Investment

By the Saint Christopher and Nevis Citizenship by Substantial Investment Regulations 2023, which came into force on 27 July 2023, citizens of St Kitts and Nevis that are the registered owner by Certificate of Title for the following real estate:

  • land on which a single-family private dwelling home is constructed; or
  • a condominium unit:
    1. previously sold as the subject of CBI application; and
    2. for which the statutory time frame for resale has elapsed may apply to the Board of Governors for such real estate to be designated an Approved Private Home and therefore a qualifying investment by which the purchaser may obtain citizenship by investment.

This Private Home Sale option provides an avenue to sell real estate owned by citizens of St Kitts and Nevis through the CBI programme.

Property rights that can be acquired in St Kitts and Nevis include the following.

  • “Ownership in fee simple”, which is an absolute ownership with full rights to deal with and alienate property.
  • Life interest, which entitles the holder to occupy the property for his or her lifetime. This type of interest is most often seen in cases where a person dies intestate (without a will) and, by law, the surviving spouse is entitled to a life interest in the deceased’s property with the remainder to the children in “fee simple” when the surviving spouse passes away.
  • Self-vesting deed, which is a self-declaration of one’s ownership in property by virtue of long possession. This type of property right can be easily challenged. Consequently, persons with a vesting deed often convert the deed to a COT once they have held the vesting deed for the requisite number of years.
  • Ownership by adverse possession after 12 years of open, undisturbed possession.
  • Ownership by long possession after undisturbed possession of property for over 30 years.
  • Leasehold interests over three years must be registered.
  • Licences.
  • Easements.

As referenced in 1.1 Main Sources of Law, the laws applicable to the transfer of real property by citizens are as follows:

  • the Title by Registration Act; and
  • the Conveyancing and Law of Property Act.

The laws applicable to non-citizens are as follows:

  • the Alien Land Holding Regulation Act; and
  • the Citizenship by Investment Act.

The Stamps Act sets out the stamp duty or taxes payable on transactions (see 2.10 Taxes Applicable to a Transaction).

The documents required to effect the lawful transfer of property would depend on whether the property is held by COT or deed.

The transfer of property held by deed is effected by registration of a Deed of Indenture.

The transfer of property held by COT is effected by registration of a memorandum of transfer (MOT). In addition to presenting the executed and stamped MOT for registration, the transferor is required to submit his or her original COT, which is cancelled upon the registration of the transfer and a new COT is issued to the new owner.

In each case, the transfer document is to be submitted to the Inland Revenue Department (IRD) for assessment of the taxes due. When the taxes are paid, the IRD stamps the transfer document confirming the payment of the relevant taxes. Once the document is stamped by the IRD, it is presented to the Registry of Titles or the Registry of Deeds (as may be applicable) for the registration of the transfer and issue of a new COT (if applicable).

Title insurance is not required by law and is not common. The instances in which title insurance is taken on property usually involve a large development project, often by an overseas investor or involving an overseas financier.

The Registry of Lands has functioned during the coronavirus pandemic (ie, the COVID-19 pandemic, to be specific in terms of particular coronavirus strain) save for the brief periods when there was a complete lockdown of government offices. During this period, some accommodation has been extended to parties who are unable to get documents notarised to facilitate real estate transactions. In clear cases, notarisation by video conference has been accepted together with an affidavit setting out the circumstances in which in-person notarisation was not possible.

Purchasers usually engage the services of a local attorney-at-law, who will conduct due diligence on the property. The typical due diligence usually involves the following:

  • a physical search at the Land Registry to confirm whether the property is free from encumbrances (eg, mortgage, caveat, restrictive covenants), and, if not, to identify the encumbrances on the property;
  • confirming that the seller is the registered proprietor of the property with power to transfer an interest in the property;
  • enquiring at the IRD to confirm whether all land taxes in relation to the property are paid up; and
  • enquiring at the electricity company and water department to confirm whether all the utilities are paid up.

At times purchasers request a new survey of the property to confirm the boundaries; however, a new survey is not usually ordered as it is not required; it is customary for a surveyor to copy the previous plan of the property for the new owner. A survey and a physical walk-through of the property is always done in cases involving large tracts of land earmarked for development purposes.

The typical representations and warranties in a purchase and sale agreement in real estate transactions include the following:

  • the sellers are the registered proprietors of the property and have a good marketable title to the property in fee simple;
  • the property is free of all encumbrances save the customary encumbrance in favour of the government for land tax due and owed from time to time; and
  • the property is not subject to any other Purchase and Sale Agreement nor is the property subject to any agreement for a right of first refusal in favour of any third party.

The authors have not seen new representations and warranties driven by the coronavirus pandemic, per se, but the authors have noted an increase in the insistence on force majeure clauses.

There are no seller’s warranties provided for under statute. The buyer’s remedies against the seller are the remedies available to the buyer under common law.

Typically, if a purchaser breaches a contract for the purchase and sale of real property, the result provided for is forfeiture of the usual 10% deposit paid by the purchaser, ie, the deposit will be paid to the vendor.

Representation and warranty insurance is not normally used in St Kitts and Nevis real estate transactions.

Typically, a large investor would negotiate and enter into a development agreement with the government that would set out the taxes and concessions applicable to the investor’s development. The Hotels Aid Act sets out the general regime applicable to investors in the hotel industry.

In St Kitts and Nevis, the seller of real estate is to ensure that he or she complies with the laws of the National Conservation Environmental and Protection Act, amongst others, and equally the buyer is responsible for ensuring compliance when the property is transferred. Even if the buyer did not cause the pollution or contamination, as the owner of the land, he or she would be ultimately responsible for same, but he or she may be able to seek an indemnity against the seller if it can be established that the seller was responsible for the contamination.

According to the Development Control and Planning Act (the “Planning Act”), every person seeking to erect, re-erect, remove or alter the structure of a building is required to make an application to the Department of Physical Planning for permission to do so. A buyer can ascertain the permitted uses of a parcel of real estate under applicable zoning or planning law by contacting the Department of Physical Planning to obtain a copy of the zoning plan, planning scheme and planning regulations relevant to that area.

The relevant plan will contain requirements concerning land use, vehicular access, parking, setbacks from boundaries, site coverage, floor area limitations, height limitations, external appearance (in some cases, including preferred colours) and tree planting. There may also be special planning controls on alterations to buildings of historic interest. Usually, signs and advertising devices are subject to planning controls.

A buyer can also source a copy of the COT or deed in respect of the property that would contain the restrictive covenants attached to the land. The general Building Code applicable to St Kitts and Nevis is set out in the seventh schedule to the Planning Act.

The St Kitts (Planned Community) Act provides for the establishment and registration of planned communities. The purpose of the Act is stated as “to allow and facilitate the creation, development, and operation of one or more planned communities in the St Kitts peninsula resort district and to provide for related matters”. The Act has since been extended to other areas in St Kitts that benefit from the special provisions of the Planned Community Act. The objectives of the Act are stated as follows:

  • to allow and facilitate the creation, development and operation of one or more planned communities in St Kitts;
  • to provide a mechanism for the registration of title to a parcel of land intended for subdivision and development in a planned community and to provide for positive covenants to run with the title to the land;
  • to provide for the regulation of the rights and obligations of the owners of property within a planned community;
  • to provide for the creation of a community corporation that will be responsible for the development and management of the amenities within and the infrastructure of the planned community; and
  • to facilitate the establishment and enforcement of the obligations of a landowner within the planned community.

Pursuant to the Constitution of St Christopher and Nevis and the Land Acquisition Act (or the Land Acquisition Ordinance in Nevis), the government has the power to compulsorily acquire land for a public purpose; however, the proprietor of the land is entitled to compensation for such acquisition. The legislation provides for the establishment of an assessment board comprising one nominee of the proprietor, one nominee of the government and a judge as chairperson.

The seller is generally required by law to pay 10% stamp duty, assessed on the value of the property being transferred, which is usually the purchase price or the value assessed by the IRD, whichever is greater.

There are instances where the seller and the buyer agree to share the stamp duty payable on the transfer, but this is completely dependent on agreement between the parties.

The stamp duty payable may be increased or decreased depending on the location of the property being transferred or the circumstances of the transfer, including familial relationships, the developmental zone, and whether the land is being transferred by the court or the government Housing and Land Development Agency.

If a real estate agent is involved, the seller would usually also pay the real estate commission, which is typically about 5–6% of the sale price. There are also small fees payable by the purchaser if the property is held by a COT:

  • an assurance fund fee of 0.2% of value of the property; and
  • a registration fee of USD2.70.

The purchaser is also usually responsible for all other closing costs, (eg, legal fees, surveyor’s fees).

When shares are being transferred, it is also subject to stamp duty, which is a percentage of the value of the shares, as well as to a nominal registration fee. If the main asset of the company is real property, the transfer of shares would attract taxes at the same rate as the transfer of real property.

In St Kitts and Nevis, a foreign investor is required by law to apply for and obtain an alien land holding licence or citizenship (usually, pursuant to the CBI programme) before that investor can hold an interest in land (see 1.1 Main Sources of Law). If the investor is a company and the shareholders are granted citizenship, the company would not require an alien land holding licence to purchaser real estate. There are no other legal restrictions on non-citizens investing in real estate.

Commercial real estate is generally financed through lending institutions. There are different financing options for the acquisition of large real estate portfolios or companies holding real estate, such as lease to own arrangements or by participating in the CBI programme, where the purchasers finance the development project. If the large tract of land is owned by the government, there is the option of the government partnering with the developer in various ways to develop the real estate.

The typical security created or entered into by a commercial real estate investor who is borrowing funds to acquire or develop real estate is a mortgage over the property. The mortgage can be legal or equitable. If an equitable mortgage is created, a caveat is usually placed on the property to forbid any further dealings with the property. In addition, the company may pledge its shares to the lending institution and use a corporate or personal guarantor as additional security.

Foreign lenders are required to apply for and obtain an alien land holding licence to hold security over real estate in St Kitts and Nevis. The application process is fairly simple and is largely procedural. Other than the requirement to obtain an alien land holding licence, there are no restrictions on granting security over real estate to foreign lenders. Similarly, there are no restrictions on repayments being made to a foreign lender under a security document or loan agreement.

A stamp duty of 1% of the sum secured is generally payable on the registration of a mortgage. However, the rate is 2% of the sum secured for mortgages taken over land in the South East Peninsula that is designated as a Special Development Area under the Stamps Act.

The main cost of enforcement of the security would be legal fees as a court process is usually involved.

There are generally no legal rules or requirements that must be complied with before an entity can give valid security, other than the provision of the usual corporate authorities from the board of directors authorising the proposed transaction.

The Title by Registration Act sets out a detailed procedure to be followed by a mortgagee when a borrower is in default.

  • Service of a formal notice to pay off, in the prescribed form, on the registered proprietor, requiring payment within 60 days of the date of service.
  • If the registered proprietor fails to pay, the lending institution may seize the land by the bailiff appearing on the premises with an order to seize and shall serve the registered proprietor with an act of seizure in the prescribed form. There is provision for substituted service in circumstances where the whereabouts of the registered proprietor are unknown.
  • The lender presents a caveat of seizure in the prescribed form to the registrar, which the registrar shall note on the title. The caveat of seizure prohibits any dealings with the land seized until the caveat is removed or withdrawn.
  • If no payment or satisfactory arrangements for payment is/are made within 30 days from the date of seizure, the lender applies to the court to settle the articles of sale, estimate an upset price, fix the day of the sale and the mode of publication of the sale. The application is served on the registered proprietor, who may attend the hearing and make representations accordingly.

The lender would usually obtain a valuation to support its application to estimate the upset price. Further, the sale must be satisfactorily advertised and proof of advertisement must be submitted to the court. If there are no bidders, the auction is postponed. If the auction is not successful, the borrowing entity can apply to the court to reduce the upset price of the property, based on the further appraisal of a valuer.

It is possible for existing secured debt to become subordinated to newly created debt; however, this will depend on the lending institution. It is generally done by an agreement, subject to the lending institution’s conditions, which typically include that the collateral on the existing debt is valued high enough to secure the newly created debt. Life insurance policies, large enough to accommodate both debts, are also a usual requirement for individuals.

Generally, a lending institution that merely holds a security over real estate would not be liable for breaches of environmental laws.

No registered security interests created by the borrower in favour of a lender are made void if the borrower becomes insolvent.

There is a 1% stamp duty on the sum secured payable on the registration of a mortgage over real estate in St Kitts and Nevis. The stamp duty is usually for the account of the borrower and the lender would ordinarily include the stamp duty with the payments to be made by the borrower (eg, lender’s commission and/or administrative fee, legal fees) as a prerequisite to disbursing the loan.

The legislative and governmental controls that typically apply to strategic planning and zoning in St Kitts and Nevis are set out in the following legislation:

  • the Planning Act;
  • the Nevis Physical Planning and Development Control Ordinance (the “Planning Ordinance”);
  • the Nevis Zoning Plan Ordinance; and
  • the Condominium Act, which governs the development of condominiums.

The Planning Act and Planning Ordinance broadly govern the design, appearance and method of construction of new buildings or refurbishment of an existing building. In addition to requiring that plans be registered with, and approved by, the Department of Physical Planning (DPP), the DPP also makes regular physical inspection of the construction site to ensure that construction is proceeding according to the approved plans.

Residential and commercial buildings are subject to height restrictions based on the zone in which they are located. Hotels and other buildings on the coast are required to be erected at a minimum specified distance from the high-water mark.

The authority that is responsible for regulating the development and designated use of individual parcels of real estate is principally the Department of Physical Planning. If the regulations are not complied with, the DPP may issue a stop order and the offending landowner may be subject to a fine.

Applications for approval to develop a major new project or any project under the CBI programme are to be submitted to the St Kitts Investment Promotion Agency (SKIPA) with the relevant architectural and building plans, topographical surveys, environmental impact assessment survey, business plan and other relevant documents.

Depending on the nature of the project, its size and its location, public consultations are held prior to granting approval. In such cases, third parties are allowed to participate and object, if appropriate. In a recent case, Anne H. Bass v Department of Physical Planning, the court confirmed that pursuant to the Nevis Planning Ordinance, members of the public had the right to attend the office of the DPP and inspect the plans and documents submitted in relation to a development in Nevis.

If an applicant is dissatisfied with the decision of the DPP, the applicant may appeal to the Physical Planning Appeal Tribunal. If the applicant is dissatisfied with the decision of the Tribunal, there is a right of further appeal to the High Court.

Typically, a developer would enter into a development agreement with the government that would usually make provision for co-operation of the various government departments or authorities. The utilities (electricity, water, and such) are government owned (through a company, in the case of electricity) and the government may make representations in relation to those as well. Separate agreements may be negotiated with suppliers of other utility services (eg, internet, cable) but typically with the assistance of the government by agreement.

While it is not typically a scheduled procedure, employees of the various regulatory departments (where applicable) would usually visit work sites to check the progress of construction or renovation, and whether there are any breaches of the zoning, agricultural, health and environmental laws, amongst others. If there are any breaches, a stop notice may be issued, halting construction. Also, a fine may be imposed on the offending party.

Investors may hold real estate assets through a local company or a limited partnership. A local limited liability company is most frequently used.

The main features of the constitution of each type of entity used to invest in real estate are as follows.

Limited Partnership

Any two or more persons, including a body corporate person, may form a limited partnership but at least one person must be a general partner. In a limited partnership, the general partner is personally liable for debts and the limited partner has limited liability but cannot participate in the management of a business. The partners of a limited partnership are exempt from all income, capital gains and withholding taxes with respect to the limited partnership if the general partners only transact with persons who are resident outside the Federation. This is the type of ownership structure used for the Park Hyatt project.

Limited Liability Company

A local limited liability company is governed by a board of directors, the members of which may be resident or non-resident. However, there is a requirement that the secretary or assistant secretary of the company be resident in St Kitts and Nevis. The company is also required to have a local address as its registered office. There are several local firms that offer secretarial and registered office services.

The shareholders of the company need not be citizens of or resident in St Kitts and Nevis. However, if the shareholders are non-citizens, they would be required to apply for and obtain an alien land holding licence to own the shares in a local company. The alien land holding licence application procedure to be a shareholder in a company is simple and relatively inexpensive.

A real estate investment trust is not a commonly available investment vehicle in St Kitts and Nevis.

There is no minimum capital requirement.

See the description in 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity.

The annual maintenance cost would depend on the type of entity used. The government fee for the maintenance of a local company in St Kitts or Nevis is approximately USD100.

In the Federation of St Christopher and Nevis, the law recognises the use of leases to allow a person, company or other organisation to occupy and use real estate for a limited period.

All leases are governed by the Conveyancing and Law of Property Act, the Rent Restriction Act and the Recovery of Rent Act.

A “public or commercial building” is defined by the Rent Restriction Act as a building, or part of a building, separately let, or a room separately let, which at the material date was or is used mainly for the public service, or for business, trade or professional purposes, and includes land occupied therewith under the tenancy but does not include a building, part of a building or room when let with agricultural land.

In St Kitts and Nevis, there are two standard forms of commercial leases: the fixed-term lease and the ordinary lease (for a periodic tenancy).

Fixed-Term Lease

A fixed-term lease will automatically terminate at the end of the fixed term stipulated in the lease. There is no requirement to renew the lease or allow a lessee to stay in the premises past the fixed date set out in the lease. This form of lease offers more protection for the lessor, as a lessee may be required to pay for the entire term outlined in the lease if he or she leaves the premises early. The only option a lessee has to opt out of a fixed-term lease prior to the expiry of the term is if there is a break clause in the lease allowing the lessee to do so, if the landlord forfeits the lease, or if the lease prescribes for early termination upon the occurrence of a specific event; for example, an act of God that causes substantial damage to the property.

Ordinary Lease

An ordinary lease allows the lessee to negotiate to extend the lease, as well as to give notice to vacate the premises early without any additional consequences, once the rent up to the time of vacating the premises is paid and all other requirements of the lease were complied with. This form of lease generally offers more protection to the lessee.

The Rent Restriction Act made provisions for the governor-general to appoint three fit and proper persons, one of whom shall be a government officer, to be rent commissioners for the state, for the purposes of carrying into effect certain provisions of the Act. The rent commissioners would then prescribe the standard rent to be applied to any category of lease or building. However, to date, there has been no appointment of rent commissioners. Consequently, in practice, the rent of any premises is set by agreement between the parties.

Regulations Governing Length of Leases

The various pieces of legislation governing leases do not specify the length of time that a person can lease the property that they own; however, when a mortgagee of land in possession, as against all prior encumbrances, and as against the mortgagor, leases the mortgaged property, then the lease is governed by Section 37 of the Conveyancing and Law of Property Act, which sets out the number of years a mortgagee can lease the property depending on the type of property being leased.

The Act specifies that an agricultural or occupational lease cannot be rented by a mortgagee for a term exceeding 21 years, a mining lease cannot be rented for a term exceeding 35 years and a building lease cannot be rented for a term exceeding 99 years.

Further, a lease made by a mortgagee must be made to take effect no later than 12 months after the date of the lease.

Regulation of Lease Terms

With respect to the terms of a lease, whereas the statute does not prescribe the form of words to be used when outlining the terms of a lease, the parties to a lease are guided by the statute when setting out its terms.

Other than as set out above, rent and lease terms are freely negotiable.

COVID-19 Regulations Directly Affecting Lease Terms

Although government authorities encouraged landlords to be lenient with tenants in the wake of the coronavirus pandemic, no legislation has been enacted that has directly affected lease terms. However, the National Housing Corporation (NHC) in St Kitts and various banks in the Federation provided temporary moratoriums in 2020/2021 waiving and/or deferring fees and payments to homeowners who were adversely affected by the pandemic.

Similarly, the Nevis Housing and Land Development Corporation (NHLDC) had a mortgage relief fund to benefit persons who have received financing from the NHLDC to purchase their homes. Further, public auctioning of houses for default in loan payments was temporarily ceased.

Although the statute does not prescribe the terms to be used in a lease, there are some terms that can usually be found in a commercial lease.

Typically, the length of a lease of business premises is for a fixed term of years with an option to renew. Rent at a fixed sum is usually payable monthly and default of payment can result in the termination of the tenancy.

Ordinarily, the lessor is responsible for the structural maintenance, insurance and property taxes relating to a commercial lease, and the tenant is responsible for any minor wear and tear that arises during their tenancy. Unless otherwise outlined in the lease, the tenant would also be responsible for paying for the utilities during the tenancy.

It is common for a lease to include provisions concerning whether a tenant can assign the lease or sublet the property and outlining the types of permitted alterations or improvements (if any) and whether or not permission from the landlord is required to do so.

In light of the coronavirus pandemic, the inclusion of force majeure, rent abatement and other similar clauses in leases has become more commonplace.

The level of rent is determined by agreement between the parties. Express provision may be made in the lease for a predetermined increase in the rent after a stipulated period during the term of the lease.

See the description in 6.3 Regulation of Rents or Lease Terms.

The payment of value added tax (VAT) is prescribed by the Value Added Tax Act, which does not prescribe that VAT is payable on rent per se. However, if the income of the landlord from its rental business is more than the threshold of XCD100,000 per year, which is usually the case with leases of commercial properties, and the landlord is registered to collect VAT, the tenant would be required to pay VAT on the rent. If the tenant is registered to collect VAT, the tenant would be entitled to request a refund of the VAT paid on the rent.

At the start of a lease, the tenant is not usually required to pay any amount other than rent. However, some leases may require that a tenant pay the first and last month’s rent and/or a refundable deposit to be applied to any damage to the property and/or sums outstanding on service accounts and utilities at the end of the tenancy.

When a person is renting a commercial building with a shared rental space – for example, a shared parking lot or gardens – the maintenance and repair of those spaces would generally be paid by the landlord. However, if the building is on a small lot that is not shared, the tenant would usually be required to maintain and keep in good repair the garden, parking lot and other surroundings associated with the rental property.

Usually, each tenant is responsible for the utilities and telecommunications charges associated with its tenancy. It is preferable for each tenant to have a separate meter for electricity and the reading provided each month so that the appropriate payment may be made. If the utilities are not separated – for example, water – they may be charged by the landlord at a flat rate per month as agreed by the landlord and the tenant. Typically, for services such as internet and cable, the tenant would set up its own connection and would be directly responsible for the charges to the relevant companies.

The insurance for the real estate subject to a lease is typically paid for by the landlord. It would usually cover structural damage by flood, hurricanes, tornadoes, tsunamis and other natural disasters but it would not usually cover the contents of the building, as that would typically be for the tenant to insure.

The authors are not aware of any case in which tenants recovered rent payments or other costs under business interruption insurance policies as a result of office closures and clean-up costs incurred during the coronavirus pandemic. As far as the authors are aware, business interruption insurance policies are not commonplace in St Kitts and Nevis.

A landlord can include in the lease restrictions on how the tenant uses the real estate. Typically, a lease would indicate that the premises is not to be used for any other purpose than what is set out in the lease.

Further, the premises may be subject to zoning regulations and restrictive covenants attached to the property, with which the tenant would be required to comply (see 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law).

The rental agreement would normally outline whether a tenant is permitted to alter or improve the real estate and the extent of such changes.

In order to safeguard against the premises being altered in a way that is not acceptable, the landlord would generally request that the tenant seek permission to make alterations or improvements, and expressly state that the tenant is not allowed to make structural changes, or changes that may change the character of the premises. How alterations and improvements are treated is a matter for negotiation between the parties.

There are no specific regulations or laws that apply to leases of particular categories of real estate. However, there may be legislation that governs the area in which the real estate is located – for example, the St Kitts (Planned Community) Act – or covenants applicable to a particular piece of real estate that may affect how a tenant may use a rental property.

Since the start of the coronavirus pandemic, the government has enacted a series of emergency powers (COVID-19) regulations (at the time of writing, No 16 is in force) that provide extensive safety measures and protocols for residences, offices, retail and hotels to follow. Subject to the regulations, real estate accessible to the public ought to have measures in place to ensure that hygiene, distancing and other protocols are followed. Additionally, the number of persons allowed to frequent the premises at one time has been restricted.

If the tenant is insolvent and owes rent, the landlord would be an unsecured creditor entitled to share in the assets of the tenant with other unsecured creditors pari passu.

In accordance with the Rent Restriction Act, the landlord is precluded from charging any premium, fine or other additional amount other than rent as a condition to the granting, continuance or renewal of a tenancy. The landlord’s only recourse in relation to a breach of a tenant’s obligations is to serve notice on the tenant, where the Act so allows, and/or institute legal proceedings against the tenant with respect to any damages arising out of the tenant’s failure to meet obligations.

As a practical matter, at the commencement of the tenancy, a landlord can negotiate for and secure first and last month’s rent and/or a refundable security deposit.

A tenant does not have a right to continue to occupy the rented premises after the expiry or termination of a fixed-term commercial lease.

Tenants can continue to occupy the premises after the expiry of the date set out in an ordinary lease if they exercise an option to renew the lease, or if they pay for the additional time that they remain in the premises, normally on a month-to-month basis until another agreement is made or the tenant is evicted by the court.

It is open to landlords to exercise any of the following options if they require a tenant to vacate premises:

  • serve a notice to quit on the tenant;
  • apply to the court for recovery of possession of the premises if the tenant does not leave on the date originally agreed or demanded; and/or
  • apply to the court for the recovery of the additional rent (also known as mesne profit) for the period the tenant occupied the premises after the expiry of the lease.

A tenant may assign its leasehold interest if the terms of the lease permit.

A clause allowing a tenant to sublet or assign a property would normally include the following:

  • a requirement that the tenant give notice to the landlord in writing or request the landlord’s permission to sublet or assign the property;
  • a condition that the main tenant ensures that all the terms, obligations and covenants outlined in the lease are complied with by the person to whom the lease is assigned or underlet; and
  • a term indicating that the act of assigning or subletting does not affect the landlord’s right of re-entry or right to forfeit the lease or serve notice to quit on the tenant for breach of the terms of the lease.

It is standard for a lease to include a clause providing that a tenant may terminate the lease by giving written notice to the landlord. There is no requirement in law for tenants to outline why they are terminating the lease.

A landlord may give the tenant notice to quit in the following circumstances:

  • the tenant is in default of paying rent for over 60 days;
  • the tenant has been in breach of the obligations under the lease for over 30 days; or
  • any of the conditions set out in the Rent Restriction Act for recovery of possession are satisfied.

A lease of three years or more is required by law to be registered in the Registry of Deeds and noted as an incumbrance on the property. Registration is usually undertaken by the landlord. The taxes and fees payable on registration are minimal.

If the lease is executed in St Kitts and Nevis, it is required to be executed before a witness. If the lease is executed overseas, it is required to be executed before a notary public.

A written lease is valid if it satisfies the common law elements governing a lease, in that it:

  • identifies the lessor and lessee;
  • identifies the property;
  • is for a finite duration;
  • outlines that rent is to be paid;
  • allows for exclusive possession by the tenant; and
  • is signed by both parties.

Additionally, a lease can be made orally; however, this is not normally done as an oral lease is unenforceable and recourse for any breach would only be granted if part performance of the oral lease can be shown, so as to satisfy a court that there was, in fact, an oral agreement to lease the property.

The Rent Restriction Act outlines in detail the circumstances upon which the landlord can forcibly recover possession of the rented premises.

The Act states that the court may make an order evicting the tenant and granting recovery of possession to the landlord in the following circumstances:

    1. Some rent lawfully due from the tenant has not been paid for at least 60 days after it has become due.
    2. Some other obligation of the tenancy (whether expressed or implied) has been broken or not performed and, in the case of non-performance of any such obligation by the tenant, the tenant has been in default for at least 30 days.
    3. The tenant or any person residing or lodging with him or her or being his or her subtenant has been guilty of conduct that is a nuisance or annoyance to adjacent or adjoining occupiers, or has been convicted of using the premises or allowing the premises to be used for an immoral or illegal purpose, or the condition of the premises has, in the opinion of the court, deteriorated or become insanitary owing to acts of waste by, or the neglect or default of, the tenant or any such person and, where such person is a lodger or subtenant, the court is satisfied that the tenant has not, before the making or giving of the notice to quit, taken such steps as he or she ought reasonably to have taken for the removal of the lodger or subtenant.
    4. The premises, being a dwelling house or a public or commercial building, is reasonably required by the landlord for:
      1. immediate occupation as a residence for himself or herself or for some person wholly dependent on him or her or for any person bona fide residing with him or her, or for any person in his or her whole-time employment;
      2. use by himself or herself for business, trade or professional purposes; or
      3. a combination of the purposes in subparagraphs i) and ii) above.
    5. The premises, being building land, is reasonably required by the landlord for:
      1. the erection of a building to be used for any of the purposes specified in paragraph d) of this section;
      2. use by himself or herself for business, trade or professional purposes not involving the erection of a building; or
      3. a combination of such purposes.
    6. The premises, being a dwelling house or a public or commercial building, is required for the purpose of being repaired, improved or rebuilt, and an undertaking is given that the landlord will, immediately after the completion of the repairs, improvements or rebuilding, give the tenant an opportunity for renewing his or her tenancy at such rent as the rent commissioners may order.
    7. The premises is required for public purposes.
    8. The dwelling house, or the public or commercial building, or the building erected by the tenant on building land, as the case may be, is required by law to be demolished.
    9. The tenant has sublet, or parted with the possession of, the whole or any part of the premises without obtaining the consent of the landlord or being expressly authorised by or under the tenancy agreement or lease so to do.
    10. The tenant of a dwelling house, or of building land on which the building erected by the tenant is used or is intended to be used mainly as a dwelling, uses the house or building mainly for business, trade or professional purposes without obtaining the consent of the landlord or being authorised by or under the tenancy agreement or lease so to do.
    11. In the case of building land, the building erected thereon has been sold under distress for rent.
    12. The dwelling house has been let to a tenant in the employment of the landlord on condition that the tenancy shall subsist only during the continuance of such employment, or only until the expiry of a period not exceeding one month after the termination of such employment, and the employment has terminated, or such period has expired, as the case may be.
    13. The dwelling house has been let to a tenant in the employment of the landlord in consequence of that employment, and the employment has determined or the landlord has offered the tenant suitable alternative accommodation.

Notwithstanding the aforementioned provisions, a court can make an order forcefully evicting a tenant from the premises if it considers it reasonable to make such an order based on the circumstances of the case.

There have been no amendments to the legislation that alter the position that existed with respect to leases prior to the coronavirus pandemic.

A lease can effectually be terminated by the government of St Christopher and Nevis or the Nevis Island Administration if the property leased is compulsorily acquired by the government pursuant to the St Kitts and Nevis Land Acquisition Act or the Nevis Land Acquisition Ordinance.

If the governor general considers that the property should be acquired for a public purpose, he or she may, with the approval of the National Assembly, cause a declaration to that effect to be made by the secretary to the Cabinet. The declaration will then be published in two ordinary issues of the gazette (or newspaper, in the case of Nevis) and copies thereof shall be posted on one of the buildings or exhibited at suitable places in the locality in which the property is situated. Upon the second publication, the land shall vest in the Crown.

If any land shall be comprised in a lease for a term of years unexpired and part only of such land shall be acquired compulsorily, the rent payable in respect of the land comprised in such lease may, on the application of the lessor or the lessee to a judge of the High Court, be apportioned between the land acquired and the residue of the land.

After such apportionment, the lessee shall, as to all future accruing rent, be liable to pay only so much of the rent as shall be so apportioned in respect of the residue of the land, and as against the lessee. The lessor shall have all the same rights and remedies for the recovery of such portion of the rent that was held prior to such apportionment. All the covenants, conditions and agreements of such lease, except as to the amount of rent to be paid, shall remain in force with regard to the residue of the land in the same manner as they would have done if the residue of the land only had been included in the lease.

Where it is shown that the compulsory acquisition of a portion of land comprised in a lease has rendered the residue unsuitable for the purpose for which the land was leased or where in the circumstances the said court considers it just so to do, the court may rescind the lease altogether, and in such case, the lessee shall only be liable to pay the rent due at the date of the occurrence of the circumstances on which the rescission order is based.

Where, as the result of such rescission of lease, the lessor or lessee suffers any loss or injury, he or she shall be entitled to compensation by the government.

In the event of a tenant breach and termination of the lease, there are no statutory or other customary limitations on damages that a landlord may collect. The landlord may pursue remedies other than charging the remaining rent and evicting the tenant if the circumstances of the case form the basis for seeking any other remedies. Landlords would typically hold a security deposit that is at least equivalent to one month’s rent, which is customarily applied to repair any damage to the property caused by the tenant or any unpaid utility bills left by the tenant.

The most common methods used to price construction projects are lump sum contracts and unit price contracts.

Lump Sum Contracts

If there is a lump sum contract, the contractor estimates the total cost of constructing the project and the fixed lump sum price is included in the contract. Therefore, the owner of the property will only be responsible for paying that amount in accordance with the terms of the contract.

With this type of contract, the owner effectively assigns all the risk of completing the project to the contractor, who can, in turn, request a higher mark-up. However, once the fixed sum is agreed, if the contractor underestimated the cost of the project, the contractor’s profit will be reduced. Likewise, if the contractor overestimated the cost of the project, then his or her profit will be increased.

Unit Price Contracts

If there is a unit price contract, then the risk of overestimating or underestimating the cost of the project is relinquished since the contractor would give an estimate for the work to be done on each unit or phase of the development, and the owner would be responsible for paying the contractor periodically for the work done on each unit or in advance of the work on each unit.

This method is typically used for large projects, as the contractor would have the option of refraining from continuing the remaining unit until the cost of the work done for each unit is paid. Additionally, if, in the development of the various units, an unexpected or unanticipated risk presents itself or if the development of one unit is more challenging than others, then the contractor is able to increase the amount to meet the risk.

It is standard procedure that a head architect or contractor supervises a development project and allocates tasks to the various persons working on the project. The head contractor operates as a bridge between the owner and the workers. Normally, that contractor is also responsible for paying the persons working on the project.

It is the norm for the head contractor to set up an integrated system in which the designers and builders of the project work together to safeguard against making avoidable changes and unnecessary re-evaluations in relation to the project. This system allows for the construction workers to ascertain the information needed to produce a more accurate representation of the design since the designers and construction workers would be working simultaneously.

The devices most commonly used to manage construction risk on a project are indemnifications and warranties.

Indemnifications

An indemnification clause in a construction contract is included to ensure that the general contractor of the project indemnifies the property owner from any harm caused by its workers.

Warranties

A warranty would be used in a construction contract to specify the course of action to be taken in the event that something goes wrong.

Limitation Act

Any construction contract is subject to the provisions of the Limitation Act, which outlines that a party has six years to sue for a breach of contract, or under a contract, which time can be extended when the breach is acknowledged or a promise is made to fulfil the terms of the contract.

The parties to a construction project would typically include a clause that facilitates the management of schedule-related risks. The contract can outline that the developers compensate the owner if the project is not completed on schedule due to the fault of the persons working on the project. The contract can also set out what is considered as a reasonable delay in the schedule or what would happen if the delay in the schedule was due to any unforeseen circumstances. The specific terms would be based on the negotiations of the parties taking into consideration the nature of the project and issues related to the location of the project, amongst other things.

An additional form of security common to construction projects is performance bonds. The owner or investor of a construction project would generally require the general contractor to get the other contractors or project managers to sign performance bonds so that they do not lose the value of the work in the event of an unforeseen circumstance that would adversely affect the project, such as the insolvency of the party before the completion of the project.

A lien or encumbrance is generally seen in unit price contracts. Those contracts generally stipulate that the developer is paid after or in advance of the construction of a unit. If the payment is not forthcoming, the developer can cease working on the next unit or phase until the contracted payment is made. It is possible for an owner, in an effort to prevent delays in the project, to include a term in the contract that the developer continues working, subject to the payment of interest as a penalty for non-payment.

There is no set requirement imposed by the law before a development project can be inhabited or used for its intended purpose. It is only subject to approvals and conditions when permission for the development is being sought. Contracts may require the contractor to issue a certificate of occupancy before the project can be inhabited for insurance or other purposes.

Value added tax is payable on the sale of goods and services. Therefore, VAT is not paid on the sale or purchase of real estate. However, if the attorney-at-law conducting the transaction is registered for VAT, VAT would be payable on his or her legal fees.

In order to mitigate the tax liability on acquisitions of large real estate portfolios, the Stamps Act prescribes a reduced duty or an exemption from paying stamp duty depending on various factors prescribed in the Act. By way of example, transfers made by or on behalf of the Frigate Bay Development Corporation or by or on behalf of the National Housing Corporation are exempt from stamp duty. An investor may apply to the government for concessions in relation to the taxes payable on the development project. Concessions are made with a view to stimulating investment in the local economy.

In accordance with the Licence on Business and Occupations Act, every person wishing to carry on a business, occupation or trade or practising any profession mentioned in the Schedule of the Act (hereinafter referred to as “business activities”) is required to apply for a licence prior to carrying out those business activities. The fee to be paid would depend on the type of business activity being carried out, as prescribed by the Schedule of the Act.

There is no personal income tax in St Kitts and Nevis. However, the Income Tax Act imposes a 10% withholding tax if a person resident in the Federation pays to any person who is not resident any income as prescribed by the Act, including rental income and income under a lease or contract.

There are no tax benefits from owning real estate per se.

Joseph Rowe

Unit #5
Long Stone House
Main Street
PO Box 1200
Charlestown
Nevis

+1 869 469 1015

rowe@josephrowelaw.com josephrowelaw.com
Author Business Card

Trends and Developments


Authors



Joseph Rowe is a boutique law firm with offices in Nevis, St Kitts and Grenada with attorneys-at-law also qualified to practice in the island of Anguilla. The firm comprises a 15-person professional team, who pride themselves on having a client-focused law practice providing quality legal services with a view to achieving the best results possible for its clients. Its legal expertise and professional services include citizenship by investment (investment migration), offshore companies and trusts, real estate transactions (including commercial, residential, hotel and investment real estate), maritime/admiralty law and civil and commercial litigation. Recent engagements include providing legal representation for the first geothermal power plant project on the island of Nevis; acting for developers of a commercial complex; representing the developer of resort development projects; successfully securing compensation for a multi-million-dollar beachfront property that was compulsorily acquired by the government in Nevis; and representing multiple purchasers and vendors of luxury real estate within a 5-star resort villa development.

Real Estate in St Kitts and Nevis Through the Citizenship by Sustainable Investment Programme

What is new in 2024?

Investors around the world are drawn to the prospect of diverse real estate investment opportunities in developing island-states such as the Federation of St Kitts and Nevis (also called St Christopher and Nevis).

Real estate purchase in St Kitts and Nevis is simple and non-citizens are welcome to own, rent or otherwise invest.

A non-citizen may be required to obtain an Alien Landholding License (ALHL) to hold land. Note that real estate within specific locations in St Kitts are currently exempt from this requirement. Alternatively, by applying for citizenship and purchasing government-approved real estate, whether within a development or a private home, an ALHL is not required.

Unique to only five Caribbean islands including St Kitts and Nevis, an individual’s investment in real estate can carry with it added benefits of obtaining a second citizenship in an economically and politically stable tropical paradise in the Caribbean.

Real estate transactions form a significant part of the government’s revenue and, as such, the government of St Kitts and Nevis is constantly exploring ways to stimulate the real estate market. Significant resources have been dedicated to the promotion of St Kitts and Nevis around the world as a premier destination for visitors and new or second home seekers alike. The authors have seen the demand for high-end properties remaining stable, with real potential for growth.

Recently, the government of St Kitts and Nevis has taken decisive steps to bolster the real estate market. The St Kitts and Nevis Citizenship by Investment programme has been replaced by the St Kitts and Nevis Citizenship by Sustainable Investment (CSI) programme. Real estate investment remains one of the key features of the CSI programme.

To that end, the government of St Kitts and Nevis has published new CSI Regulations that took effect on 27 July 2023.

St Kitts and Nevis has fantastic real estate options for the buyer who wants more.

The real estate market in St Kitts and Nevis has shown robust activity in the past year. There has specifically been steady interest in high-end options and prospectively high-end “fixer-uppers”. At the moment, a number of distressed properties or hotel properties with under-realised potential remain available for purchase. It is possible that such properties can produce solid returns on investment and some fun-in-the-sun for anyone up to the challenge.

Real estate units

Buyers who purchase approved real estate, whether a condominium unit, villa or private home, have the opportunity to apply for citizenship in St Kitts and Nevis under the CSI programme. Anyone interested in making use of this benefit must comply with the July 2023 CSI Regulations and satisfy the minimum investment requirements thereunder.

Some of the highlights within the current real estate development offerings in St Kitts and Nevis are internationally branded private resort residences. These properties provide the exceptional opportunity of owning and living in the most exclusive gated community, with luxury services and amenities at the owners’ disposal. Owners receive the same five-star amenities and services as hotel guests. Real estate investments in these types of developments can qualify the purchaser to become a citizen of St Kitts and Nevis.

In a bold move in July 2023, the government of St Kitts and Nevis increased the minimum investment required under the CSI programme by 100%. The real estate investment option now allows CSI applicants to acquire citizenship by making a minimum investment of USD400,000 (previously USD200,000) in a real property designated by the government as an Approved Development.

The minimum investment of USD400,000 does not include due diligence fees, CBI application processing fees, government approval fees, returns on investment, agent fees or any other commissions and fees, all of which must be paid in addition to the minimum investment amount.

The minimum holding period of seven years remains unchanged.

What has changed is how an owner can resell to a new purchaser also seeking citizenship. In order for the real estate unit to qualify the secondary purchaser for citizenship, the owner must successfully apply for the real estate unit to be sold as an Approved Private Home pursuant to the July 2023 CSI Regulations. More on the Private Home option is explained next.

Private home sales

Under the new CSI Regulations, “Private Home Sale Investment Option” remains a permanent investment option under the CSI programme. However, the requirements for a private home to qualify a buyer and his/her family for St Kitts and Nevis citizenship have changed.

Now, only a private home owned by a citizen of St Kitts and Nevis can qualify for sale to a purchaser seeking citizenship under the CSI programme.

The CSI Regulations clearly provide that where any citizen of St Kitts and Nevis is a registered owner by Certificate of Title of the following real estate:

  • land on which a single-family private dwelling home is constructed; or
  • a condominium unit:
    1. previously sold as the subject of CBI application; and
    2. for which the statutory timeframe for resale has elapsed,

and wishes to sell such real estate to a purchaser seeking to apply for citizenship under the CSI Regulations, the citizen or their real estate agent shall apply to the governing body for such real estate to be designated as an Approved Private Home.

The Private Home Sales Investment Option allows CBI applicants to acquire citizenship by making a minimum investment of USD800,000 (previously USD400,000) in a private dwelling house or USD400,000 (previously USD200,000) for a single-family condominium unit designated as an Approved Private Home. An investment in one private home can only be used to support a CSI application for one family (up to three generations), even if the investment amount exceeds the minimum investment by several multiples.

Under the current CSI Regulations, an Approved Private Home is subject to the following conditions.

  • It can only be resold after seven years from issuance of the formal title document to the new owner.
  • It can only be resold to another purchaser seeking to apply for citizenship if the Federal Cabinet is satisfied that substantial further investment was injected by way of further construction, renovation or otherwise.
  • It cannot be converted into apartments or multi-family condominiums or otherwise subdivided.

The CSI programme offers real estate development financing opportunities

Obtaining financing for tourism hospitality construction or renovation projects in the Caribbean can be expensive and challenging. This is where the CSI programme holds measurable benefits for prospective developers, whether large or small.

Where a developer or prospective developer of land in St Kitts and Nevis (i) owns the land or has entered into a binding purchase and sale agreement; (ii) has approval in principle for development of the land from the local authorities; and (iii) wishes to sell real estate units in that development to purchasers interested in acquiring citizenship, then that developer can apply for an Approved Development under the CSI Regulations.

The St Kitts Investment Promotion Agency (SKIPA) is responsible for reviewing applications by developers and for making recommendations to the governing body under the CSI Regulations for that development to be designated an Approved Development.

For anyone reading this article and considering real estate development opportunities in St Kitts and Nevis, here are some useful tips before you approach SKIPA. Your proposal should contain:

  • a description of the project including size, capital investment, concept and layout designs;
  • good source and proof of financing;
  • a realistic projection for completion of the project or each phase of the project, if applicable;
  • a statement on the impact your real estate development project will positively impact the St Kitts and Nevis economy, whether through introduction of innovations, creation of jobs, skills development, etc;
  • a five-year pro forma cash flow statement;
  • an Environment Impact Assessment;
  • a comprehensive list clearly identifying the licences or concessions required for the real estate development project; and
  • due diligence information on all natural persons who are involved in the management or ownership of any corporate entity involved in your project.

Be prepared to have copies of all supporting documents notarised and apostilled, if applicable.

Based on the type of real estate development being undertaken, there may be additional considerations. As a first step, it would be prudent for any potential investor to retain knowledgeable and credible professionals locally. This is relevant whether for a simple purchase of a single family dwelling home or a multi-phase resort development.

The Public Benefit Option

The Public Benefit Option (PBO) is gaining momentum in St Kitts and Nevis. This option was also legislated under the July 2024 CSI Regulations and is an alternative for those seeking to do real estate development outside of the traditional hotel or condominium structures.

Innovative investors wishing to develop a project which brings substantial benefit to the people of St Kitts and Nevis can apply to be designated as an Approved Public Benefactor. These investors can then apply for their projects to be designated as Approved Public Benefit Projects qualified for sale to persons seeking citizenship under the PBO.

PBOs can be linked to real estate developments, but likely require some element of technology and capacity building, in addition to job creation and other aspects of “public benefit”.

Under the Public Benefit Option, each individual seeking citizenship under the St Kitts and Nevis CSI programme is required to make a minimum contribution of USD250,000 in a unit of an Approved Public Benefit Project, to be paid to the relevant Approved Public Benefactor.

Ultimately, the St Kitts and Nevis CSI programme is a less expensive means of financing a real estate development project when compared to traditional financing options. Importantly, it offers benefits to potential real estate purchasers, developers and to the state that exceed those generated in traditional real estate transactions.

There remain several intriguing sites, both in St Kitts and in Nevis, that have the potential to be prime opportunities for real estate development. From the charming but neglected boutique hotels of yesteryear to modern eco-friendly large-scale mixed-use properties, potential investors are likely to find a gem. The authors have found that the market has remained a buyer’s market into the second quarter of 2024. There are signs that a shift to a competitive seller’s market is on the horizon.

For those who are not considering citizenship at this time, purchasing real estate in St Kitts and Nevis can be quite seamless, even for non-nationals. The process for obtaining an Alien Landholding License is straightforward and a licence can be obtained in a reasonable timeframe. Additionally, as mentioned earlier in this article, certain areas in St Kitts have been exempted from the Alien Landholding License requirement. Accordingly, persons desirous of purchasing real estate in those special zones can become owners of real estate without any requirement to apply or pay for an Alien Landholding License.

In keeping with the very deliberate efforts by the government to support investment in St Kitts and Nevis, the authors are seeing initiatives such as the Inaugural Investment Gateway Summit carded for July 2024. This Summit is focused on showcasing the dynamic investment opportunities that exist in the twin-island Federation of St Kitts and Nevis. The sites mentioned in this article are likely to take centre stage in synergy with the CSI programme.

St Kitts and Nevis is welcoming persons globally to explore and invest. There is a focus on sustainable development and initiatives that support this vision. Whatever the investment being considered, it is paramount to work with trusted independent professionals who can guide clients through the process with certainty and efficiency.

Once an individual has identified a property and has or intends to make an offer, the authors recommend he or she engage a local attorney to prepare or review the Purchase and Sale Agreement. It is prudent, where real estate is being purchased by foreign persons, that the closing of the sale be expressly contingent on approval of the application for an Alien Landholding License or approval of the application for Citizenship by Substantial Investment. Allowances should be made for possible extensions, in the event the relevant application is delayed for reasons beyond the purchaser’s control.

Joseph Rowe

Unit #5
Long Stone House
Main Street
PO Box 1200
Charlestown
Nevis

+1 869 469 1015

rowe@josephrowelaw.com Josephrowelaw.com
Author Business Card

Law and Practice

Authors



Joseph Rowe, Attorneys-at-Law is a boutique law firm with offices in Nevis, St Kitts and Grenada with attorneys-at-law also qualified to practice in the island of Anguilla. The firm comprises a 15-person professional team, who pride themselves on having a client-focused law practice providing quality legal services with a view to achieving the best results possible for its clients. Its legal expertise and professional services include citizenship by investment (investment migration), offshore companies and trusts, real estate transactions (including commercial, residential, hotel and investment real estate), maritime/admiralty law and civil and commercial litigation. Recent engagements include providing legal representation for the first geothermal power plant project on the island of Nevis; acting for developers of a commercial complex; representing the developer of resort development projects; successfully securing compensation for a multi-million-dollar beachfront property that was compulsorily acquired by the government in Nevis; and representing multiple purchasers and vendors of luxury real estate within a 5-star resort villa development.

Trends and Developments

Authors



Joseph Rowe is a boutique law firm with offices in Nevis, St Kitts and Grenada with attorneys-at-law also qualified to practice in the island of Anguilla. The firm comprises a 15-person professional team, who pride themselves on having a client-focused law practice providing quality legal services with a view to achieving the best results possible for its clients. Its legal expertise and professional services include citizenship by investment (investment migration), offshore companies and trusts, real estate transactions (including commercial, residential, hotel and investment real estate), maritime/admiralty law and civil and commercial litigation. Recent engagements include providing legal representation for the first geothermal power plant project on the island of Nevis; acting for developers of a commercial complex; representing the developer of resort development projects; successfully securing compensation for a multi-million-dollar beachfront property that was compulsorily acquired by the government in Nevis; and representing multiple purchasers and vendors of luxury real estate within a 5-star resort villa development.

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