Parliamentary Speech by Minister of Housing and Water, Hon. Collin Croal, M.P. for the Introduction of the Condominium Bill #4 of 2022
Introduction
“Mr. Speaker, it is a privilege to introduce this most critical piece of legislation Bill Number 4 of 2022, The Condominium Bill.
Let me begin by restating to this honourable House our government’s commitment to bettering the lives of citizens and to advancing the economic development of Guyana. Only yesterday His Excellency Dr. Irfaan Ali announced a one-off cash grant of twenty-five thousand dollars for households in the hinterland and riverain communities which are facing hardships because of the rising cost of living; the removal of VAT from sheet rock and concrete boards and the establishment of a home construction assistance facility that will benefit persons who own a house lot but are unable to build a house because of their circumstances. And two weeks ago, the removal of VAT from cement was announced. These interventions underscore the importance of citizens wellbeing to our government.
Since our return to government in August 2020, we have we have not been shy about our goal of fifty thousand house lots in five years in particular, and in general, about providing affordable housing in well-developed communities. We have been relentless in working to build this land of ours, to invest in human capital and to reduce poverty levels in all regions, and at the same time, seek to close the gaps within sectors that do not adequately serve our people and country.
Mr. Speaker, house lot allocation targets for 2020 and 2021 are already surpassed and we will do the same for 2022. In fact, we have allocated over eleven thousand house lots to date. Further as we speak, more than eleven hundred houses are being built in eight housing areas across the country; three hundred of which are already handed over to the homeowners; the acquisition of new lands and the execution of critical infrastructure development works on the East Bank of Demerara will clear the way for the allocation of more than five thousand house lots and being cognisant of the challenges that allottees encounter when financing the construction of their homes, we have sought to make access to credit easier. As a result, the low-income mortgage loan ceiling has increased from eight million to fifteen million dollars over the period August 2020 to February 2022. This of course has made home ownership more attainable as banks can now approve a higher number of mortgages annually, coupled with the reinstatement of the thirty million dollars ceiling for Mortgage Interest Relief which provided a direct injection of disposable income in the hands of citizens, this augurs well for the direction in which housing sector is moving.
In July, Building Expo will return which will provide a platform for investors and local stake holders to showcase innovative solutions to housing because now more than ever the need for housing is at an all-time high.
Mr. Speaker, our government recognises that housing is not just about providing a roof or room for someone, we know that adequate housing can be a deterrent to crime and an incentive for education. When we improve the conditions under which people live – whether through direct poverty reducing interventions or subsidised housing, we raise the well-being of the entire country. The pursuit of housing by this government is crucial to the realisation of the bold targets we have set ourselves for these five years. Development of the kind that we have promised the people of Guyana cannot be done in an ad hoc manner. No Sir! The Ministry of Housing and Water’s programme is situated under the macro-economic principles set out by His Excellency Dr. Irfaan Ali for Guyana. Those principles of good governance, national unity and economic advancement for all is a clear mandate for the Ministry. Therefore, we are careful to critically examine the work programme we set ourselves to ensure that it benefits the citizens of this country and does not place them under any unnecessary burden. In this regard, our government has been consistent in its efforts to bring relief to home builders whether by causing the reduction of prices for building materials through tax concessions or dialoguing with the banking sector to make borrowing easier. The rapid expansion of Guyana’s economy has brought new demands for higher standards and more modern approaches to housing development that address the issues of climate change, rising sea levels, changing lifestyles and growing demand for less expensive units than what the formal market offers. These are critical issues that had to be considered as we deliberated on a raft of legislative changes which must be made to the existing legislation to bring it into conformity with modern legal framework that informs the ownership of condominiums and town houses.
Context
In most Caribbean countries, condominium development was pursued as a response to the demands of tourism. It is not the same for Guyana. In 1989, The Condominium (Regulation and Miscellaneous Provisions) Act was enacted to facilitate the sale of properties owned by the Government to sitting tenants. Under this system, the Government as the main actor in the sector provided low-cost housing to citizens. But the government was saddled with a heavy maintenance bill for those condos and since the rent was already subsidised, it became difficult for the government to maintain and upkeep them. This led to the sale of these properties in the mid 1990’s for only twenty-five thousand dollars ($25,000.00). The Buyers were issued with a Certificate of Sale to be treated as a Transport effecting a conveyance of the unit – Section 50(7) of the current Act. But over time, the owners found it difficult to use the Certificate of Sale as collateral to obtain loans from commercial banks or other financial institutions. They were also unable to obtain insurance to protect their property. This deficiency remained unaddressed for years despite the discomfort it brought on poor citizens. I rather suspect that since that type of housing was not in demand anymore, the need for new and updated legislation was not urgent.
Mr. Speaker, in 2017, facing a backlog in applications for house lots and new demands for housing as well as the inability to find available lands the previous administration launched a program of constructing 46 duplexes – two buildings divided by a common wall – for resale to citizens. Forty-two flat and two elevated two storey duplexes were constructed in Perseverance and two flat social duplexes at Prospect. These duplexes were constructed in Land Registration Areas governed by the Land Registry for which Certificates of Title to land were issued. This immediately created a Titling issue since the Condominium – Regulation and Miscellaneous Provisions Act applied only to Deeds Registration Areas governed by the Deeds Registry and for which Transports were issued and therefore a Certificate of Sale could not be issued under the current Land Registration system. It is clear that the Coalition did not treat this matter with any urgency beyond perhaps talking about bringing new legislation to address the deficiencies in the existing one.
Our government quickly recognised too that demand for housing was concentrated in mostly urban areas and so a new challenge for space to develop new housing areas reared its head. Added to this, expats participating in oil and gas activities here are seeking more first world options for housing, such as town houses, apartments, and condos. In fact, investors had expressed interest in constructing condos here as a housing option and an investment. While we welcomed the interest it was clear to us that we needed to amend or repeal and replace the current laws to provide a clear legislative landscape for the establishment and regulation of condominium schemes. And by so doing, we will not only remedy what was done by the previous administration, but we will also provide a clear path for new investors.
Procedure
Mr. Speaker, it is with this in mind that the Central Housing and Planning Authority -CHPA – engaged Mr. Darshan Ramdhani, Q.C as its Consultant to review the current legislation and to provide a legal analysis and draft policy framework. The review recommended that the existing legislation be replaced with new legislation, and he prepared a draft Condominium Bill that drew on the experiences of North America – both Canada and the USA and the Caribbean including Barbados where condominium schemes thrive.
The Bill defines “Condominium as any building divided into units, each unit being attached to, or dependent to a substantial degree on, the other units forming the building for support, shelter or easements relating to services under this Act, irrespective of whether the units of the condominium to persons or one person.”
The Bill has six parts and sixty-five clauses and makes provision for the horizontal and vertical subdivision of land and buildings into units for individual ownership, and for the use and management of condominiums.
Part 1 deals with the approval and registration of the condominium. Any person desirous of constructing condominiums or converting existing buildings into units must first submit, to the Minister of Housing and Water, a proposed declaration and description for approval.
Part 2 describes the responsibilities of the Minister under Approval and Registration and stipulates stringent timelines within which the he or she must act. For example, within one month of receiving the submission of the documents, the minister must in writing acknowledging receipt of the submission and is required to give notice of his or her decision no later than three months after the acknowledgement of the receipt of documents. If he or she fails to do this, the bill states and I quote “…and where the Minister does not, within that period, communicate his decision to the promoter of the condominium in writing, the proposed Declaration and proposed Description shall be deemed to have been approved by the Minister.” Unquote.
Parts 3 and 4 give detailed explanations and guidance on title of ownership, easements, rights, creation, and duties of a corporation, by laws and rules governing the use of common property, rights and obligations of owners, insurance, repairs and maintenance, termination, and sale of units.
And Parts Five & Six discuss condominiums in public sector, termination of management agreements, penalties, regulations, and appointment of administrator. Some of the changes of the Act proposes to make the process of registration of a condominium easier, cater to the existing condominiums complying with the new requirements for registration and for owners of the existing condominiums to be issued with a new document that is the Transport or Certificate of Title. It also caters for the existing Certificate of Sale to remain valid until it is replaced with a Transport or Certificate of Title which of course brings comfort to owners of such dwellings as they will not have to worry about being inconvenienced by the new legislation.
Additionally, this Bill will allow commercial banks to accept titles for the properties as collateral and insurance companies will be able to issue policies to owners of condominiums.
Clause 19 of the Bill states that units in a condominium constitute immovable property, while Clause 20 provides for the title of ownership of a condominium unit.
Consultations
Mr. Speaker, we were keen to have the input of a cross section of stakeholders and therefore, stakeholders’ consultations were held between CHPA and the consultant’s team on July 16, 2021, and with the Central Housing and Planning Authority, the Financial Institutions and Commercial Banks through the Guyana Association of Bankers Incorporated and Insurance Companies and later with the Insurance Association of Guyana on August 4, 2021, and on 15th November 2021, respectively. Banks and financial institutions represented were Scotiabank, Republic Bank, Citizens Bank, Bank of Baroda, Hand in Hand Trust Corporation and IPED. Insurance Companies that participated are Diamond Insurance, Demerara Mutual, Hand in Hand Mutual Fire Insurance, Assuria Guyana Incorporated, Caricom General Insurance Company Limited, NAFICO, Massy United Insurance, P&P Insurance Brokers and Consultants Limited, The New India Assurance Trinidad and Tobago Guyana branch and GTM.
Written submissions from persons and agencies were received from Mr. Michael Hutson, Board Member, Central Housing and Planning Authority; Central Housing and Planning Authority – Corporate /Legal Secretariat; Guyana Association of Bankers Incorporated; Ms. Juanita Critchlow, Assistant Company Secretary/Assistance Legal Manager, IPED; The Ministry of Tourism, Industry and Commerce and The Bar Association of Guyana.
The New Act
This legislation maintains the need for oversight of the sector with the executive giving approval of the declaration and description through the office of the Minister. Reasons for rejecting an application must now be provided by the Minister in writing. This will ensure that persons are given a fair hearing and the aggrieved party is made aware the reasons for refusal of the application. It also empowers the minister to approve, reject or direct the amendment of a proposed declaration and description.
A technical team will be empanelled to review the project (Declaration and Description) to ensure that the proposal complies with the relevant laws. On recommendation from the technical team, the Minister’s approval will be issued. (Section 5(3)
Mr. Speaker, the timeline for the approval by the Minister has been reduced from six (6) months to three (3) months. (Section 6)
The Condominium Scheme is no longer referenced as an instrument, but a Declaration executed by the owner of the land and details statements relating to the purchase or lease of each unit, whether it is free or subject to existing mortgages, the consent of persons who have charges, or liens, the proportion of the common interests, the percentages allocated to the units and unit entitlement of each unit, with an address for service. (Sections 12-14). The Description accompanies the Declaration and contains the technical specifications of the building. (Section 15)
On registration of a Condominium, constitutes immovable property and can be conveyed, leased, mortgaged, or disposed of as immovable property under both the Deeds Registry Act as well as the Land Registry Act. (Section 19)
Owners of units will be issued with separate titles for each Unit. A Transport shall be registered in the Deed Registry and a Certificate of Title shall be registered in the Land Registry. (Section 20). There is a duty of disclosure to incoming Purchasers who can apply for and receive a Certificate setting out his liability for common expenses. (Section 32). Therefore, owners will have exclusive ownership of their unit and shall be tenants in common of the common property. For assessment of property taxes and taxation, each unit and the common interest shall constitute a parcel. (Section 21)
On the registration of the Declaration and Description, a Corporation shall be created, and the members shall be the owners of the unit from time to time. However, where a company or corporate body, Government, Local Government Authority or one individual owns the Condominium a corporation shall not be created. (Section 28)
Insurance
The Corporation shall insure its liability to repair damage property to the replacement value. While the owners of each unit shall be responsible to insure in respect of damage to his unit risks not covered by the Corporation or any improvement made to his or her unit. (Section 44)
Termination
The Declaration can be terminated in several ways but not limited to the following: –
- by notice where the condominium is damaged substantially. (Section 48)
- by Order of the High Court (Section 49)
- when the property or any part is sold and transferred
Moneys received from Purchaser to be held on Trust
The money received from a purchaser of a unit before the registration of a Declaration and Description shall be held on trust and shall be held in a separate bank account. A breach of this provision is an offence liable on summary conviction to a fine or one million dollars (if the person convicted is a Corporation) or Five hundred Thousand Dollars (if the person convicted is not a Corporation) – (Section 53
Condominiums in the Public Sector
Condominiums in the public sector – owned or promoted by the Government, any local Government authority, the Central Housing and Planning Authority or any corporate body with controlling interest vested in the State of any agency) is still applicable in this new Act. (Section 54) The Sale of the Units shall be on payment in full of the purchase price and a separate title either a Transport or Certificate of Title will be issued. (Section 55)
Existing Condominiums
Within six months after the Act comes into operation, the owners of unit of every existing condominium is required to prepare a Declaration and Description and submit same to the Registrar for registration. Upon registration depending under which Act the condominium falls, the owner will be issued with either a Transport or Certificate of Title (Section 9). Once issued with a Transport or Certificate of Title, the existing Certificate of Sale shall cease to be of legal effect. However, Certificates of Sale shall continue to be valid until it is replaced with a Transport of Certificate of Title.
Regulations
Regulations have been created pursuant to Section 62 of the Condominium Act and the associated fees will be consistent with administrative fees for similar services.
Conclusion
Mr. Speaker, this new Act will provide clearer understanding of this viable alternative to single home ownership and will likely lead to more buy-in. It is a modern piece of legislation that is on par with other territories. It is timely and relevant to the emerging trends in home building in Guyana. As with any Bill, there are some limitations which we will continue to examine and put forward solutions. Notwithstanding, the owners of those forty-six duplexes built by the last administration can sleep better tonight knowing that their legal position regarding ownership is more defined and are protected by law. Secure property rights help people to participate more fully in the community and strengthens their commitment to the development of the community.
Mr. Speaker, condominiums, and town houses are Guyana’s newest type of real estate investment, and it shows tremendous potential for the future. With Guyana’s tourism thrust, it is not difficult to imagine an increased demand for condominiums as vacation homes and income properties. This legislation will make taking advantage of these investment opportunities easier. The bill before us was a collaborative effort between government, the legislature, and the people of Guyana and it is my honour to ask this this honourable House to accept the passage of this Bill. “