“Heavy criminal fines” in Condominium Act protect buyers

…AG Chamber touts benefits of condos against rentals

Condos are a new concept to Guyana’s developing landscape, but the recent passage of a modern Condominium Bill in the National Assembly has introduced a slew of protections for buyers including fines for developers who violate provisions of the new law.
This was explained by officials from the Attorney General Chamber and Legal Affairs Ministry during the recent episode of “Simplifying the Law” – a programme designed to enlighten citizens about the various pieces of legislations that are being or have already been enacted.

Deputy Solicitor General Deborah Kumar, and State Counsel at the AG Chamber, Pierre Squires, appeared on the programme to talk about the Condominium Bill that was passed in the National Assembly back in May 2022. The new law seeks to ensure a structured and clear policy framework to guide the ownership and management of town houses and condominiums.
They explained the process that goes behind the development of a condominium and the various provisions outlined in it to ensure the processes are fast-tracked and not lagging at the various State agencies as well as protections for potential buyers.
According to Kumar, Section 53 of Condominium Act provides assurance for buyers in that when monies are paid over to the developer, called ‘the corporation’, it must be held in trust in a separate bank account until the purchaser gets possession of the unit being bought.
This, the Deputy Solicitor General explained, is kind of a restriction on where this money will go, with the buyer having the power to release the funds and when to do so.
She added that Section 7 of Act is also restrictive in that it states whilst the application for a condominium complex is pending, which takes a maximum of three months, the developer cannot accept any money for the purchase of units. This can only be done when approval is obtained.
“So, you cannot do that until there is approval by the Minister of Housing and until there is registration of the condominium complex,” Kumar noted.

Criminal fine
Potential buyers usually pay upfront for their condos as construction starts. The money would effectively go towards the building of the purchaser’s unit.
However, State Counsel Squires pointed out that when that money is handed over to the developer, there are penalties in the new legislation if the funds are misused.
“If there is a violation of the money held on trust for the purchase of this condominium by the corporation, they can be subjected to a heavy criminal fine. Persons overseas who might be interested in buying units, they might be a bit reluctant to purchase because they’re not sure who this person is…”
“There is a criminal fine for the misappropriation of the money held on trust and it would vary but there are fines outlined all in the legislation. And there are penalties, for example, for repairs and so many other things outlined in the Act,” the State Counsel noted.
The Condominium Act further caters for various options to purchase units, that is, cash and on mortgage.
“Essentially, what is fundamental about Section 11 is two-fold, it would allow for clean titles of ownership to be issued and it would also allow a purchaser to use the same condominium unit… as collateral for a loan to buy… This legislation has catered for the demands in housing and cured deficiencies of persons going to the commercial banks, where they can now do so freely and borrow against the unit using the transport or the Certificate of Title as their proof of ownership and as a collateral for mortgage and I believe that is most enticing,” the Deputy Solicitor General noted.
However, in addition to protection for buyers every step of the way, the Condominium Act also contains comprehensive provisions for developers that would ensure the project takes off in a timely manner. These include strict timelines for the application and registration processes.
According to State Counsel Squires, during the former process, the Minister of Housing, who is responsible for handling the application, has to give reasons in writing for rejecting and/or approving the proposal so that the developer can know the grounds for the decision.
The legislation stipulates a three-month timeline for the Minister to deal with the application, that is, to approve, deny or recommend amendments to the declaration and description instruments submitted by the developer. This is an improvement from the six months timeline in the old legislation.
If approval is given, then there is another four-week deadline in place for the relevant registration process.
“So, in total, you can have approval [for the development of a condominium] within four months,” Kumar stated.
Meanwhile, State Counsel Squires went on to highlight the advantages of opting to buy a condo as opposed to renting an apartment – though both may seem similar. The biggest benefit, he underscored, is ownership.
“This is your unit. You will have a Transport or a Certificate of Title as the owning document… So, it’s easier for you to say you own this property as opposed a lease or rental agreement in which your name is there on an agreement and you have exclusive possession to the property but it’s not as though you own it. That’s one of the major advantages of owning a condominium,” he stressed.
Added to these are the many benefits that comes with condominium complexes such as shared amenities like pool, gyms and other open spaces. (G8)