Real estate law in Saint Lucia is mostly derived from statute, primarily the Land Registration Act, Cap. 5:01 of the Revised Laws, 2008 and the provisions of the Civil Code, Cap. 4.01. 

Over the past 12 months, the demand has grown in the second home market ranging from USD500,000 and upwards. The luxury home market is seeing more demand with sales in the USD6 to USD8 million range. The pandemic affected both volume and velocity in the first 18 months but as the market opened so did sales, particularly from the US, UK and Canadian markets.

The real estate market in Saint Lucia remains traditional and generally unaffected by disruptive technologies.

There are currently no reforms expected likely to significantly impact investment in real estate on the island.

The principal property rights available are freehold and leasehold ownership. 

The Land Registration Act, Cap. 15.37 and its attendant regulation and the Civil Code, Cap. 4.01 apply to the transfer of property. Outside of the Condominium Act, which governs condominium developments, there are no laws dealing with specific types of real estate.

Saint Lucia has a land registration system dating back to 1986. Every parcel of land on the island is recorded at the Land Registry and identified by reference to Map Sheets. Title to property is usually effected by notarial deed, executed before an attorney at law in his or her capacity as a Notary Royal. In some cases, transfer may take place through the acquisition of shares in a holding company.

All transfers of title whether by deed or instrument of share transfer are presented first to the Inland Revenue for payment of stamp duty. Thereafter, deeds are submitted to the Land Registry to be recorded or instruments of share transfer are presented to the Companies Registry for registration. 

Title insurance is not used on the island. In the few instances where used, this has been largely in a situation where the purchaser is obtaining funds from a foreign bank. 

Initial delays in processing of deeds, obtaining documents from the Land Registry caused by the pandemic have largely come to an end. 

Typically, a prospective buyer will engage an attorney at law to undertake real estate due diligence and title searches. A search of the Land Registry will allow for a Land Register which is the proof of title required together with copies of the title of a predecessor in title, instruments confirming existing incumbrances (mortgages, restrictions and servitudes) and a map sheet showing the location of the property in relation to other properties. An examination of the Parcel File will generally give a detailed history of any property. The Land Register will indicate if the property has been surveyed or its boundaries are not demarcated. Survey Plans are recorded and registered at the Department of Surveys and Mapping and easily available. A search of the Registry and Deeds and Mortgages has deeds recorded prior to 1986, as well as indicating if there are any recorded judgments against a vendor. It is to be noted that judgments in Saint Lucia affect all property belonging to a person, both movable and immovable. 

During lockdowns and the resulting travel restrictions, many buyers opted for virtual viewings with on-site realtors. 

Typically, representations and warranties are given with respect to titles being transferred free and clear of encumbrances, judgments or liens or from appropriation action by the government. Neither the Civil Code nor the Land Registration Act specifically provide for warranties of a particular kind. In a case where misrepresentation is alleged, a buyer may use all remedies legally available, including rescission and damages. Representation and warranty insurance is not used in Saint Lucia.

An investor purchasing in Saint Lucia must be fully cognisant of the law relating to the licensing of non-nationals to acquire and own property, and the tax obligations that arise from different property ownership structures.

There is no legislation in Saint Lucia specific to soil pollution or environmental contamination. 

The Development Control Authority (the “Authority”) is responsible for zoning and land development permissions. A buyer can request this information from the Authority prior to the acquisition of any property. The Authority is consulted as part of the Aliens Licensing processing. Statutory Authorities are permitted to enter into public private arrangements with developers/investors, provided that this is permitted by that authority’s statutory mandate.

The government may acquire land through compulsory acquisition for a public purpose. This process is regulated by the Land Acquisition Act, Cap. 5.04 of the Revised Laws, 2008. Once the property is identified, an advertisement will be placed in the Government Gazette. The owners may then proceed to engage with the assigned officer to negotiate compensation. 

In the case of an outright property purchase by deed, the seller pays a transfer tax called vendors tax and the buyer pays a stamp duty of 2% of the transaction value. Vendors tax in the case of Saint Lucian citizens is calculated on a scale while in the case of non-nationals the rate is 10% of the transaction value (except for an International Business Company registered prior to 1 January 2019). 

In the case where the property is owned by a company and the buyer chooses to acquire the shares in the company, two scenarios apply. 

• In the first scenario, if the property being sold is owned by individuals or a company that is not an International Business Company and the property being sold comprises of more than 75% of the company’s assets, then both stamp duty (2%) and vendors tax (10% for non-nationals) will apply. Where the 75% threshold is not met, there is a stamp duty of 0.5% of the net asset value. 
• In the second scenario, if the property being sold is owned by an International Business Company registered in Saint Lucia, then stamp duty of 2% payable by the buyer and a fixed 5% vendors tax payable by the seller will apply. 

Foreign investors are not restricted with respect to the acquisition of real estate provided that the requisite Aliens Licence is obtained in respect of each acquisition if required. This applies regardless of whether property is acquired by purchase or long-term lease (known as an emphyteutic lease).

Typically, financing occurs through local banks or foreign financial institutions through mortgage loans. 

Financial institutions typically require hypothecation (mortgaging) of the subject property, personal guarantees and in some cases, a pledge over the shares in the corporate entity or its parent. 

There are no restrictions in place regarding the granting of security over real estate to foreign lenders.

All security documents that require registration in public registries must first be presented to the Inland Revenue for stamping and payment of stamp duty. The stamp duty applicable to certain classes of transactions and/or documents are specified in the Stamp Duty Act, Cap. 15.11 of the Revised Laws, 2008 as amended from time to time. Classes of documents not provided for in the Act would be subject to payment of a nominal sum of XCD10.00 for stamping only. Fees charged at the Land Registry are nominal usually at the rate of XCD20.00 per parcel. 

Deeds that require registration are generally required to be executed before an attorney at law in their capacity as a Notary Royal. Such deeds are referred to as notarial documents and the fees applicable for preparation, execution and registration are fixed according to the minimum tariff fixed by the Bar Association (barassociationslu.com). 

There are no specific rules per se. However, aside from the requirements set by individual financial institutions, an entity in order to give valid security must be:

• in compliance with the requirements of the Companies Act insofar as the filing of its annual corporate returns so that the Registrar of Companies can issue a Certificate of Good Standing to confirm the entity’s compliance with the Act;
• in compliance with the tax laws (corporate taxes, valued added tax and property tax);
• in compliance with the National Insurance Corporation laws regarding national insurance contributions for employees; 
• not have any recorded judgments for the payment of money or other liability; and
• the property to be used as security should not be subject to any adverse encumbrances or other registrable liens.

Upon registration of any security over real estate, the priority of the security instrument is recorded on the Land Register for the property. While the mortgage instrument generally provides for the ranking of the security being provided, this ranking is always subordinate to government taxes and national insurance obligations, and any prior judgments recorded at the Registry of Deeds and Mortgages.

Usually, where the security is by way of legal mortgage and default occurs, a lender is required to take legal proceedings and obtain a formal judgment before moving to enforcement. In the case of a mortgage debenture that provides for the appointment of a receiver, the lender may on default occurring appoint a receiver who then takes over control of the property in accordance with the terms of any loan agreement, the terms of the debenture and the provisions of the Companies Act. 

It is possible by agreement and by the intervention of the relevant party into the security documents agreeing to an inversion of order with respect to the priority of the security. This is governed by the Civil Code.

There are no applicable laws in this regard, however, a lender only holds a lien over the property to the extent of the sum owed and holds no legal interest in the property, which is the subject matter of the lending and to that extent, liability should not be an issue. 

If a borrower become insolvent, security interests created are not made void. The lender remains free to obtain judgment and execute against any security created in the lender's favour. In the case of a corporate borrower, insolvency or inability to pay debts would effectively be grounds for calling in the security and allow a lender to immediately enforce against the security.

LIBOR was typically used to fix interest on foreign currency lending. With the expiry of LIBOR, it is anticipated that borrowers may be able to enjoy more competitive rates of interest. 

The Department of Physical Planning is the principal authority regulating land use on the island. The Physical Planning and Development Act, Cap. 5.12 sets out the requirements for obtaining approvals for real estate development on Saint Lucia. The Act specifies what should form the content of such an application and what should be contained in a plan presented for approval; maps, drawings, descriptive information and other details necessary to properly illustrate the proposal. In that regard, the Department may involve other agencies and departments, eg, the National Emergency Management Office and the Ministry of Health to get sufficient information to inform a decision on the plan. 

The Development Control Authority established under the Physical Development and Planning Act, assumes responsibility for making decisions regarding the approval of plans for land development. This review takes into consideration the potential impact on the environment, and they can request environmental impact assessments for the purposes of evaluating an application and making a decision. Permission for land development may be granted unconditionally or with specific conditions with regard to the location and type of development. 

The Development Control Authority (DCA) established under the Physical Development and Planning Act, Cap. 5.12 assumes responsibility for reviewing and making decisions regarding the approval of plans for land development.

Application for development approval is submitted by the developer or its agent at the relevant ministry. The application is checked to ensure that all requirements are submitted about the type of application. Once these requirements have been met, an account is prepared for the payment of fees. Upon payment of fees, the application is registered and issued with a reference number, stamped and submitted for assignment to an officer for processing. Third-party consultations usually occur when change of land use applications are being considered. The Act sets out these procedures and it may involve placing advertisements in the newspaper bill boards on the property.

A right of appeal to the Appeal Tribunal established under the Act exists in respect of any decision of the Development Control Authority.

Developers are required to follow the established rules, regulations and procedures for property development. Utility companies are free to enter into agreements with developers as they see fit and whether this occurs is in the purview of the utility company. 

The Development Control Authority has the authority to issue “stop notices” in the case of unplanned development or where there is deviation from an approved plan. In developments where servitudes and covenants exist, owners may seek to enforce these through court action.

Investors in real estate may purchase in their individual names or choose a corporate structure. In most cases, the decision as to which structure is used is driven by tax advice, whether the property is likely to be used for income generation, and in the case of a company, whether there is an existing Aliens Landholding Licence. 

The constitutional documents primarily set out a company’s governance framework and establishes the powers of its board of directors charged with the day-to-day management and operation of the business. In the case of a company incorporated as a company limited by shares, the liability of its shareholders is limited to the amount (if any) unpaid on their shares.

There is no prescribed minimal capital required to set up each type of entity. The general practice is to capitalise with USD100.

All domestic companies established under the Companies Act, Cap. 13.01 require that directors and a company secretary be appointed before commencement of business. Such companies are required to file an annual corporate return at the public Companies Registry detailing shareholding and directors. Changes in beneficial ownership and directors must be reported. 

Companies established under the International Business Companies Act (IBCs), are represented by registered agents who maintain the records of IBCs in keeping with the statutory requirements and as such, companies are bound to report any changes in shareholding or governance to the registered Agent. IBCs are required to pay an annual fee to the government and complete an annual return that is lodged with the registered agent. IBCs are liable to taxation and must file income tax returns with the Department of Inland Revenue. 

In the case of a domestic company, costs range on average from USD700 for the filing of the annual corporate return and for the preparation of financial statements. Costs will increase for accounting services depending on the volume of trading activity and services required. In the case of an IBC, costs start at approximately USD1,300 for annual registration, registered agent fees and annual accounting services. 

The law does not specify any timeframe within which an occupier of a property must purchase such property. 

In general, the terms contained in most commercial leases are similar with some alterations. Leases of commercial spaces are negotiated freely by the parties. 

Rents and lease terms are freely negotiable. There was no legislation enacted during 2020 to address pandemic-related issues. Landlords have mostly worked with their tenants. 

Leases of business premises average two years at minimum with provisions for renewal. The Land Registration Act specifies that any lease over two years is subject to registration at the Land Registry. Terms for repair are usually specified in the lease and negotiated and agreed between the parties. Rent is generally paid monthly in advance on the 1st of the month. No trend towards including pandemic-related clauses for the future has been noted.

In most cases, a lease will specify whether the rent is fixed for the period or is subject to increase. Where rent is subject to increase, the mechanism for increase is specified in the lease to avoid uncertainty.

In most cases, by incremental increases or reference to a cost of living index. The norm is by agreed incremental increases.

In most cases, by incremental increases or reference to a cost of living index. The norm is by agreed incremental increases.

A security deposit equivalent to one month’s rent is normally payable by the tenant at the start of a lease in addition to the first month’s rent. 

General maintenance and fair wear and tear are usually covered by the landlord. In some cases, the tenant, by agreement, may agree to undertake some maintenance. 

In such instances, a separate utility meter (water and electricity) is connected for each tenant. The tenants are then responsible for paying their own electricity and water charges. Additional services such as cable and internet can be connected should the tenant require this service at their expense. Some landlords may bundle water, cable and internet as part of the rental package, but this is unusual. 

Insurance of real estate is the landlord’s responsibility; however, it is the tenant’s responsibly to insure their contents and often the cost of any improvements made to the leased premises. If, for any reason, damage is caused to the property due to the negligence of the tenant, then payments for the repairs would be the responsibility of the tenant. The insurance policy would usually cover events such as fires, flooding, storms, theft, earthquakes and other natural disasters. 

Leases in general will specify how the property leased is to be utilised. In some cases, this may be specific or in others more general with a caveat that the property is not to be used for any immoral or illegal purpose. A property cannot be leased for a purpose not in keeping with its development approval, eg, a residential property zoned for residential use and occupation cannot be leased as commercial premises.

The terms of the lease will usually set out the extent to which a tenant is permitted to make alterations to leased premises. In general, a landlord will ordinarily permit improvements by the tenant provided that these improvements are agreed prior, and the landlord does not thereafter become liable to the tenant for the value of these improvements upon termination of the lease (unless agreed).

There are no specific regulations governing leases of particular categories. There were also no legislative amendments during the pandemic specific to leases of property, save and except for residential properties let to the public. These required a COVID-19 certification.

As there is no insolvency legislation, the terms of the lease agreed between the parties will generally govern a situation where the tenant becomes insolvent.

Typically, the only security which a landlord holds in the agreed security deposit, plus first and sometimes the last month’s rent. Restraint against the movable property of a tenant can only occur after a court order has been issued. It is not automatic. 

A tenant does not have a right to continue occupation, however, most leases do provide mechanisms for renewal; in a case where there is no mechanism for renewal and the parties have not made legal arrangements prior to the termination of the existing lease for renewal, a tenant often remains in possession paying the monthly rental as a tenant at sufferance. In a situation where no mechanism for renewal is set out in the lease, the landlord may advise the tenant prior to the expiration of the term whether he wishes to offer renewal and similarly, the tenant would advise if he wished to renew. 

A tenant does not automatically have the right to assign leasehold interest. Commercial leases usually indicate whether a tenant has a right to assign. Conditions may vary depending on the agreed terms between the landlord and tenant. Most residential leases will have a clause against assignment or subletting.

In the case of a landlord, outside of the obvious reason (non-payment of rent), a lease may be terminated by a landlord who requires a property for personal use, or if any of the agreed terms and conditions of the lease are breached. An event of natural disaster or fire may also create circumstances that give rise to termination if the premises cannot be repaired within a reasonable timeframe.

The Land Registration Act specifies that a lease for a specified period exceeding two years, or for the life of the landlord or the tenant, or a lease which contains an option for renewal and exceeds two years shall be subject to registration. Registration takes place at the Land Registry and is effected by the opening of a new register designated as a leasehold register and a notation on the land register of the existence of the lease. Leases prior to recordation are subject to the payment of stamp duty. Stamp duty is determined by reference to the Stamp Duty Act and in most cases equivalent to 2% of the consideration over the total term of the lease. Stamp duty is usually payable by the tenant.

In the event of a breach of a term of the lease, the landlord may be entitled to terminate and regain possession of the leased premises. Should the tenant not agree to give up possession of the premises, the landlord would be entitled to file suit for possession. The length of time that such a process would take would be determined by whether the claim is defended or not.

While not specifically provided for, a lease can be terminated, eg, as a result of a compulsory acquisition by the government. In such a case, the loss of rental would be considered as part of the compensation payable to the owner.

Construction projects are usually priced using the cost of materials, labour and ancillaries approach. In the case of residential projects, “fixed price” or “labour only” structures are common. Most new builds are priced by reference to the fixed price structure.

Typically, design and construction are dealt with as separate aspects. An architect is hired by an owner to create design documents often in consultation with an engineer if needed. On completion of design documents, contractors are usually requested to provide quotations or bid after reviewing the documents. Upon selection of a bid, the owner/developer will then proceed to enter a contract with the selected contractor. In the case of residential projects, referrals by word of mouth are how a contractor is selected, while for larger projects this is through a tendering process. 

The usual devices used in standard construction practice are utilised and much depends on the form of contract and contracting parties. It is not uncommon for standard type FIDIC or other contracts to be used. That said, indemnification and warranties against defects are the most common.

These events are usually provided for in the building contract. There could be penalty clauses providing for liquidated damages for cost overruns and many owners will hire a quantity surveyor to oversee and manage the project in accordance with budget, value the work-in-progress, prepare the Bill of Quantities for payment, etc. Both the owner and the contractor can agree beforehand who will bear responsibility for cost overruns. Insurance companies offer Contractors-All-Risks policies where both the principal and the contractor can be covered for unforeseen events that could delay completion of the project and incur additional costs. This generally applies to large-scale projects, both residential and commercial. 

In contracts of higher value, penalties for late delivery of works is not uncommon. Performance bonds usually relate to commercial contracts or high-end residential contracts. 

The Civil Code provides that architects, builders and other workmen have a privilege upon the buildings, or other works constructed by them, for the payment of their work and materials. This is subject, however, to specified rules. Satisfaction of the lien or a court order will be required to remove liens once placed. 

Most projects, which are sufficiently large, will provide for certificates of practical completion to be issued by a quantity surveyor or other construction professional prior to a property being made available for habitation or use. The issue of the certificate of practical completion will mark the commencement of the defects liability period, cause the responsibility for insurance of the works to move from the contractor to the employee and half the retention fee to be released to the contractor. 

If the regular business of a company is to sell real estate, eg, a developer, and revenue will exceed $400,000 per annum, then VAT is payable on the sale price at the rate of 12.5%. However, if a company sells a building as a one-off event, no VAT is payable.

Projects that qualify for concessions from the government often obtain exemption from or reduction of the applicable stamp duties payable on the initial acquisition of the real estate. 

Business premises are subject to payment of property tax at the rate of 0.4% of the open market value and residential property at the rate of 0.25% of the open market value.

Withholding taxes for foreign investors are charged at the rate of 25% on payments to extra-regional consultants or entities and 15% on regional consultants or entities. 

Taxation is levied on rental income from real estate less allowable expenses at the rate of 30% per annum. 

Development costs are accumulated and amortised as the developed land is sold. There are no Capital Gains Taxes in Saint Lucia, only vendor’s taxes on the sale of property. 

No depreciation or capital allowances are taken on land but capital allowances at the rate 2.5% pa on commercial buildings and 5% pa on industrial buildings can be used to reduce the tax liability for income arising therefrom. Loan/mortgage interest on the purchase or construction of a home or investment property is also an allowable deduction. Incentives are available for the building of tourism type developments under the Hotels’ Incentive Act and tax holidays can be granted where approved by Cabinet.