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Feb 05, 2008

Bermuda's PRO-LANDLORD rental market


Bermuda properties and real estateBermuda rental market practice is PRO-LANDLORD, despite the increased coverage of the Rent Control Act.

Keep in mind that Non-Bermudians are not allowed to rent their homes without government permission and only for periods of up to a year.

Rents: Can landlord and tenant freely agree rents in Bermuda?

In Bermuda, rental units are either covered by the Rent Control Act or the Landlord and Tenant Act. All homes and apartments (flats) with an annual rental value (ARV) of less than BM$24,600 are subject to rent control, according to the Rent Increases (Domestic Premises) Control Amendment Act 2004. Rent increases must be agreed upon by the landlord and tenant. In case the tenant refuses to agree, the landlord must ask for an approval from the Rent Commissioner.

Premises licensed as tourist accommodation are exempted from the rent control law. Rental units with lease periods of 12 months or less are also not covered by the rent control law.

Lease agreements lasting for three years or less are covered by the Landlord and Tenant Act of 1974. The law allows landlords and tenants to freely negotiate the rent.

Deposits

The Rent Control Act mandates that security deposits must not exceed 2 weeks worth of rent or $100, whichever is bigger, for rent controlled units. The deposit shall be returned after deductions for repairs are made. The payment of key money or reservation fee is illegal.

What rights do landlords and tenants have in Bermuda, especially as to duration of contract, and eviction?

The Landlord and Tenant law outlines the provisions for terminating contracts. A contract of tenancy granted for a specific period of time terminates without notice when that period expires.

Bermuda villas and housesAny breach of obligation of one party allows the other party to terminate the contract. Bankruptcy or liquidation of the tenant is also a ground for cancellation of contract. Common violations are non-payment of rent, non-payment of utilities, use of the premises other than for private dwelling and subleasing of the property without the consent of the landlord.

If the landlord fails to make the necessary repairs, the tenant can apply to Magistrate Court to withhold rent until the repairs are done. Once the repairs are completed, the tenant must pay all back rent to the landlord.

A written notice is required before either party can unilaterally terminate the lease agreement. For a yearly rental agreement, a six-month notice is required. Yearly rental agreements cannot be canceled during the first year. For a monthly rental, a month’s notice is required.

If the tenant refuses to vacate the premises after the expiration of the contract or of the notice to terminate the lease agreement, the landlord can apply for an order for possession and claim for arrears in rent and compensation with the court of summary jurisdiction. The court would then direct the Provost Marshal General to evict the tenant and/or claim compensation.

EVICTION FOR NON-PAYMENT OF RENT

Duration until completion of service of process 4
Duration of trial 25
Duration of enforcement 21
Total Days to Evict Tenant 50
Courts: The Lex Mundi Project

How effective is the British legal system?

There are not many landlord and tenant disputes in the upscale vacation rental market. At the lower end of the market, covered by the Rent Control Act, there are complaints that cases are piling up with the Rent Commissioner, working in favor of the landlord. There media reports of landlords being able to evict tenants even without court proceedings by changing the lock on doors.

Legislation

The Landlord and Tenant Act 1974 covers rental premises except for rent controlled properties which are covered by the Rent Increases (Domestic Premises) Control Amendment Act 2004.

     





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