Investing in Property Outside Canada
While largely remote to most Canadian clients without investments/houses/properties in sunny climate environments, for those that have taken that initiative, please read on.
Recently, a Canadian resident/citizen bought his dream home in Barbados. After investing heavily in both the purchase as well as improvements and the retention of locals for various services, it came time to move on in his retirement plans which, in this case, did not mean living happily ever after in Barbados. No reflection; just new plans.
That, of course, involved the sale of his property. That’s when the rub started.
First, as it turned out, his original purchase was not properly recorded. In fact, it wasn’t recorded at all despite the retention of a Barbados lawyer to do so. The lawyer neglected to register and the client neglected to require full reports on his purchase, relying, as he did, on his Barbados lawyer.
Then, upon his efforts to sell, his source of ownership (previous deeds, title documents, etc.) did not even exist. That required a “Rectification Deed” and a change to the title which was, at considerable cost, eventually obtained to place him in the position that he should have been in at the time of acquisition.
But then here’s the message: Currency control.
While purchased (and later sold) in US Dollars, the extraction of the client’s US Dollars was held up by the Barbados authorities.
Whether currency conversion shortages or mere obstreperousness, there was a reluctance to provide US Dollars and preference to provide the client with the equivalent in Barbados dollars which of course have lower currency recognition than do US Dollars.
Eventually, our client did receive his US Dollars but only after we assisted in engaging another Barbados law firm to go to bat for him. Only as the result of extensive (and expensive) legal maneuvers did the client receive what he should have received.
Remember always 3 points must be considered when investing in a foreign jurisdiction: Getting in; Getting along (with local authorities) and Getting out. And getting out means not only getting out personally but also with your investment.
Be sure you address all of these and never overlook the one relating to getting out.
Read more about the sale of Personal Use Home or Condo in the U.S.
Ministry of the Attorney General Information on Estates, Wills and Trusts
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This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.