|Published Articles on Real Estate - Anguilla Life Magazine|
At the conclusion of my last article I stated that I would continue my discussion of the public auction process as it relates to real estate on Anguilla by exploring some innovative alternatives to the existing system. Foremost in innovation would be the implementation of an Alien Land Holding Licence that is not site specific.
Auctions in a small society are unpleasant and unpopular events due to the fact that bidders inevitably know the owner of the property being auctioned--there is little to no anonymity regarding such a sale.
Bidders are therefore reluctant to purchase auctioned property until the price is irresistible--in other words, until the reserve price has been lowered to bedrock levels through a succession of unsuccessful auctions. Such delays often mean that the bedrock levels attained from the sale of the property may not retire the debt obligation, thereby forcing the banks to pursue further remedy--making a painful situation all the worse.
This problem of intimacy is compounded by Anguilla's two tier system of land ownership (i.e Belonger and Alien). Alien ownership has undeniably been the fundamental factor behind stable or rising land values, however existing Land License requirements deflate the value of property most just at the time when that property can use the most help--when it is in distress.
The fundamental licence requirement which is at fault with regard to the auction process is the requirement that stipulates an Alien must apply for a licence for a specific parcel of land. If licences were issued in a controlled manner to allow approved Aliens to purchase and develop real estate within given established guidelines regarding use, acreage, timing, etc., then those Aliens holding such licences could be selectively examined for a correct fit in an effort to secure a purchaser for a specific property at any time--in this context, at the time when a property pledged as collateral needs to be sold.
In so far as Government would have a list of all Aliens holding Licenses, the property owner, a broker, or the auctioneer, could access that list in an effort to find a suitable buyer. If a licensed purchaser is found in this manner, the transaction could be completed quickly due to the fact that a Licence has already been issued and that no one concerned would need to worry about the approval process regarding the right of ownership.
For example, a lovely beach front parcel with a restaurant developed thereon is currently being auctioned due to economic misfortune. A number of auction efforts have been attempted, each has failed, and the reserve price continues to be lowered--a very unsatisfactory scenario for all involved. If a system were in place as is being advocated, the owner or his broker could search the Land License database to find a suitable purchaser--i.e. one who had applied for and received a License to develop a tourism oriented project. As such, negotiations could begin and hopefully concluded quickly and professionally, because the approvals process with regard to the right of ownership will have already been completed. Of course, approvals for planning permission and building permits would still have to be obtained, but that is the case for Belonger or Alien alike.
The foregoing is especially important when the concern over the approval process regarding ownership is exacerbated--such as is the case for an Alien in a sale by auction. In so far as the Alien cannot know of the potential political ramifications of his proposed purchase, he cannot evaluate the likelihood of his ownership efforts. Such uncertainty once again makes him less likely to bid and thereby artificially deflates land values.
Review an Alien--approve or reject an Alien--but once approved let us harness his purchasing power in the most advantageous way possible. To do that we must let him into the general real estate market so that he can be focused upon to help the economy--not only when it is healthy but especially when it is distressed.
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