Extinguishment Of Purchasers' Rights - The Importance Of Priority In An Unregistered Land System

The Bahamas has an unregistered land system that is based on the conveyancing laws of England and Wales prior to 1925. Therefore, deeds and documents should be recorded in the Registry of Records in The Bahamas ("the Registry") as soon as possible in order to:

put the world on notice as to the existence of ownership and interests in the property and secure priority against the subsequent recording of any mortgage, charge or agreement in the Registry which can potentially affect title to the property. Priority becomes particularly important in high net-worth commercial and condominium development transactions. Take, for example, an instance where a developer purchases property to develop a condominium project and records the conveyance in the Registry. During the course of the development, the developer agrees to sell units in the condominium. A number of purchasers enter into agreements for sale with the developer and pay deposits, installments and construction stage payments, but these agreements are not recorded in the Registry.

The developer later enters into a loan agreement with a mortgagee (lender) to assist with the construction, development and completion of the condominium project. The mortgagee lends funds to the developer and in return, the developer mortgages the property to the mortgagee...