Deandrea Hamilton and Dana Malcolm
Editorial Staff
#TurksandCaicos, December 14, 2022 – The Crown Land review, jointly conducted by the TCIG and the UK Government has exposed that over 1,100 parcels of Crown Land are subject to long standing disputes about ownership and titles in the Conditional Purchase Lease program. Now, the expensive and contentious CPL pathway to land ownership is heading to the scrap pile, with some last ditch measures agreed in order to give people in this precarious position a chance to finally secure properties in question.
The Review proposes to write-off arrears on Conditional Purchase Lease agreements to give land owners a fresh start and final opportunity to honour their commitments.
“If this policy is to be pursued, it will be necessary to have a finite period of time within which applicants must come forward to apply for the freehold and gain the benefit of the write-off,” explains the review, adding, “A finite time period, such as three years, would ensure that titles are quickly regularised and would also save the applicant from further delays requiring a fresh revaluation which would cause the freehold price to go even higher.”
The Turks and Caicos Islands Government is likely now to agree not to reintroduce Conditional Purchase Leases in the country as per recommendations included in the newly published crown land review. For those who currently have a CPL the recommendations set out specific guidelines on how to proceed.
CPLs in the Turks and Caicos provide residents with a three year lease on residential land after which they can either extend or terminate the lease. The review, in the fact-finding process, found that six CPLs were surrendered or terminated; that 383 were cancelled for non-payment of rent and 301 bought the free hold title. It left hundreds of CPLs incomplete and unresolved.
The report, released on December 8, 2022 said: “But it was made clear that a large number of people still claim land under expired CPLs and have not done anything about selecting their terminal option. There are 1,101 parcels of Crown land in this position. This is despite the fact that the Crown Land Ordinance envisaged that all CPLs, and all their two-year extensions, should have disappeared by 2017 at the absolute latest.”
A plan to bring some finality to those with unsettled CPLs has been laid out extensively in the review which also reveals that the CPL program is a monster-sized mess with both government and leaseholders at fault.
“It is clear that leaseholders have not complied with their obligations or sought renewal of their lease, and it is also clear that Government has allowed people to assume that this is acceptable by not taking active enforcement steps in the past. Together, these factors have contributed to a culture in which CPLs have not been adhered to for decades and this explains how there comes to be such a disparity between the original CPL freehold prices and the revaluations.”
The joint Crown Land Review has anticipated that a significant problem will emerge when the parcels of land in question are valuated. Land prices in the Turks and Caicos Islands have risen sharply in the 10, 20 or 30 years since the CPLs were agreed and the appraisals to determine fair market value today will dramatically alter the costs in the original agreements.
The review offered a striking example: “To take one documented example, the freeholds in a pair of undeveloped residential plots in Providenciales were offered in the original CPL at $6,750 and $8,900 in 1999, and upon revaluation were priced at $30,800 and $73,500 respectively in 2007; they have undoubtedly gone up much more since then. Other unconfirmed examples were given to us by members of the public who spoke of more recent valuations, such as from $20,000 to $200,000, showing a tenfold increase in the freehold price upon revaluation. The effect of such re-valuations is that any person who has budgeted in reliance on the original CPL freehold price, despite the CPL having expired, will not be able to afford the increase.”
It could mean, homes and other constructions on parcels in an incomplete CPL, where no freehold title is obtained by the leaseholder, would be lost. The Review frankly points out that Government is not obligated to stick to the original price and that Government has been less than proficient in managing the CPL program, but if the CPL holder is able to pay off its rent arrears, then a new agreement could be drawn up with the help of a lending institution.
“Our conclusion is therefore that all arrears should be written off for anyone who buys the freehold. This will reduce the financial burden for people who choose that option, and it will also increase the likelihood of mortgage finance being available for the freehold purchase.”
A public awareness campaign is recommended to ensure no one in this category “misses out”.
The review also outlines who qualifies for the write-off; how and whom CPL parcels can be passed on to; recommends actions to distinct categories of CPLs; addresses government mismanagement and leaseholders who have lost documentation and after attempts to regularize CPLs the review suggests it is best to phase out the process entirely.
Recommendation 17: that CPLs should not be reintroduced. Turnkey housing (starter homes and rentals) should be the priority for those people still unable to afford undeveloped land even with the benefit of the Islander discount.