Bermuda Real Estate Exam cheat sheet

Bermuda real property law derives from English common law plus local statutes; the principal statute is the Conveyancing Act 1983, which governs contracts, conveyances, and title.

The Real Estate Licensing Act 2017 requires agents, brokers, and salespersons to hold a licence from the Bermuda Real Estate Licensing Board; unlicensed brokerage is an offence.

Land holding is recorded in the Bermuda Land Registry (registration of deeds, not title); a title search traces the chain of ownership and encumbrances back through the registry.

The Bermuda Monetary Authority regulates AML/ATF obligations for real estate businesses under the Proceeds of Crime Act and the AML/ATF Regulations; supervision is risk-based.

Planning permission is required from the Development Applications Board under the Development and Planning Act 1974 before most development, subdivision, or change of use.

Restrictive covenants and conditions in Crown grants or deeds can limit use, height, or subdivision; they run with the land and bind successors in title.

The Supreme Court of Bermuda hears land disputes, including boundary, easement, and adverse possession claims; limitation periods for recovery of land are set by statute.

Foreign persons may acquire residential property but face restrictions and higher government fees; certain acquisitions require consent or attract an alien licence fee.

Agency arises by express appointment, implied conduct, or ratification; the agent owes duties to the principal from the moment the relationship is created.

Core fiduciary duties: loyalty, obedience to lawful instructions, confidentiality, full disclosure of material facts, and accounting for all money and property.

The agent must avoid conflicts of interest and self-dealing; any secret profit or undisclosed commission is recoverable by the principal.

Dual agency (acting for both buyer and seller) requires informed written consent from both parties and fair treatment of each; disclosure alone is not enough.

The agent's authority may be actual (express or implied) or apparent; apparent authority binds the principal where a third party reasonably relies on the agent's holding out.

Commission is earned according to the terms of the listing agreement; an agent who is the effective cause of the sale may claim commission even after the listing expires in some circumstances.

Termination occurs by completion, expiry, revocation, renunciation, death, or insolvency; duties of confidentiality and accounting survive termination.

An agent must not purchase the principal's property, or sell their own property to the principal, without full written disclosure and consent.

Listing agreements should be in writing and specify term, commission, exclusive vs open listing, and the agent's authority to market and negotiate.

An exclusive listing entitles the broker to commission regardless of who procures the buyer during the term; an open listing pays only the procuring agent.

A buyer representation agreement establishes the buyer's agent's duties and the basis of compensation; it should be signed before substantive work begins.

A contract for sale of land must be in writing and signed by the party to be charged (or an authorised agent); the Conveyancing Act 1983 governs formalities.

Essential contract terms: parties, property description, price, deposit, completion date, and conditions (e.g., financing, survey, planning).

The deposit is usually held in a stakeholder or escrow account; it is forfeitable on buyer default but generally refundable if a condition fails.

Standard conditions include title investigation, survey, and (where relevant) planning or building approval; failure to satisfy a condition within the time allowed may allow rescission.

Risk of loss generally passes on completion unless the contract provides otherwise; the seller must convey good and marketable title free of undisclosed encumbrances.

Bermuda land is held in fee simple (freehold) or leasehold; Crown land may be granted subject to conditions and reservations.

Ownership may be sole, joint tenancy (right of survivorship), or tenancy in common (distinct shares, no survivorship); the form must be stated in the conveyance.

Conveyance requires a deed in writing, signed, attested, and (for registration) stamped; registration in the Land Registry gives priority according to the registration statutes.

Title investigation examines the chain of title (commonly 20-30 years), encumbrances, easements, covenants, and charges; the purchaser's solicitor raises requisitions.

Easements and rights of way must be expressly granted or reserved; prescriptive easements may arise from long use, but proof is difficult.

Adverse possession of registered land is limited by statute; possession must be open, exclusive, and continuous for the statutory period.

Condominium ownership is governed by the Condominium Act 1970; the unit owner holds the unit and shares the common property as tenant in common.

Completion involves delivery of the deed, payment of the balance, discharge of mortgages, and registration; stamp duty is paid on the transfer.

Bermuda mortgages are usually legal charges by deed; a mortgage secures repayment and gives the lender remedies including sale, possession, and foreclosure.

The Mortgage Registration Act and Land Registry practice govern priority; a registered mortgage ranks according to registration, not the date of the loan.

Lenders typically require a down payment (often 20-30% for residents; higher for non-residents), proof of income, and a satisfactory valuation.

The loan-to-value ratio = loan amount / appraised value; debt service ratios cap total monthly obligations relative to verified income.

Mortgage interest rates may be fixed, variable, or capped; the mortgage deed sets default, prepayment, and acceleration terms.

On default the lender must give notice and comply with statutory and contractual requirements before exercising a power of sale; proceeds are applied to debt, costs, and then the borrower.

Settlement (completion) requires coordination of funds, discharge of the seller's mortgage, and registration; the purchaser's solicitor searches the registry immediately before completion.

A mortgage broker or agent must disclose commissions and any conflict of interest; lending is supervised by the Bermuda Monetary Authority.

The three approaches: sales comparison (most used for residential), income capitalisation (investment property), and cost approach (special-purpose property).

Sales comparison adjusts comparable prices for differences in location, size, condition, age, and date of sale; the adjustment is applied to the comparable, not the subject.

Gross rent multiplier = sale price / gross annual rent; capitalisation rate = net operating income / value.

Net operating income = effective gross income minus operating expenses; exclude mortgage interest, depreciation, and capital expenditure.

Highest and best use is the reasonably probable, legally permissible, physically possible, financially feasible use that produces the highest value.

Market analysis considers supply (listings, new construction), demand (population, employment, interest rates), and absorption rates; months of supply indicate balance.

Bermuda market factors include limited land supply, international demand, planning restrictions, and sensitivity to global finance and insurance sectors.

A valuation must be independent; an agent's comparative market analysis is not a formal appraisal and should be labelled as an opinion of price.

The Development and Planning Act 1974 establishes the Development Applications Board, which grants or refuses planning permission.

Development includes building, engineering, mining, and material change of use; permission is required before work begins, and unauthorised development is enforceable.

The Bermuda Plan sets zoning, density, height, setback, and use restrictions; applications must conform or seek a departure with justification.

Subdivision requires planning permission and may require provision of access, services, and infrastructure.

Building permits and inspections are separate from planning permission; the Building Act and regulations govern construction standards.

Environmental controls include coastal, wetland, and protected-area rules; environmental impact assessment may be required for significant projects.

Historic buildings and conservation areas are protected; alterations require consent and may be refused.

Appeals against planning decisions lie to the Minister or to the courts on points of law; enforcement notices can require restoration.

Stamp duty is payable on transfers of Bermuda real property; rates are set by the Stamp Duties Act and vary by value and by purchaser status (resident vs non-resident).

The purchaser normally pays stamp duty; the deed cannot be registered until duty is paid, and underpayment attracts penalties.

Land tax is an annual tax on land ownership administered under the Land Tax Act; rates depend on the assessed annual rental value and use class.

Non-resident purchasers may pay a higher stamp duty rate and may require a licence; additional fees apply to certain acquisitions.

Property transfer also attracts registry fees and, where a mortgage is granted, mortgage duty/registration fees.

Capital gains are generally not taxed in Bermuda, and there is no inheritance tax; however, estate duty and other charges may apply in specific circumstances.

Rental income and business profits are not subject to a general income tax in Bermuda; payroll tax and social insurance apply to employment, not property.

Late payment of land tax or stamp duty attracts interest and penalties; unpaid taxes can become a charge on the land.

Licensees must act honestly, fairly, and in the client's best interest; misrepresentation of material facts, whether negligent or fraudulent, gives rise to civil liability.

Fair dealing requires disclosure of known defects and material facts, equal treatment of buyers regardless of protected characteristics, and no discriminatory steering.

The Proceeds of Crime Act and AML/ATF Regulations require real estate businesses to conduct customer due diligence (CDD) before establishing a business relationship.

CDD includes identifying the customer and beneficial owner, verifying identity from reliable documents, and understanding the purpose and nature of the transaction.

Enhanced due diligence applies to politically exposed persons, high-risk jurisdictions, and complex or unusual transactions; simplified measures are not permitted for high risk.

Suspicious activity must be reported to the Financial Intelligence Agency promptly; tipping off the customer is an offence.

Records of CDD and transactions must be retained for at least five years after the relationship ends or the transaction completes.

A risk-based approach requires documented policies, a nominated compliance officer, staff training, and independent testing of the AML programme.