Property Development Schemes ('PDS') : The Legal Framework

Introduction

The Property Development Scheme or PDS was created by the Government in place since December 2014, as a successor to the previous schemes, that is, (i) Integrated Resort Schemes (IRS) and (ii) Residential Estate Schemes (RES).

We, therefore, have a situation whereby the previous IRS and RES will continue to benefit from the advantages granted to them under the previous schemes. The Investment Promotion Act 2000 (IPA 2000) was amended to cater for the new PDS which was set up after an exercise of consultation between Government and stakeholders earlier this year. Under the powers conferred by the IPA 2000 to the Minister of Finance and Economic Development, the latter enacted the Investment Promotion (Property Development) Scheme Regulations 2015 which provide the framework for the development of the new PDS.

The figures show that about 1,500 residential units were sold by January 2015 through the previous IRS and RES programmes. As a reminder, the RES was introduced after the success of the IRS when it was felt that smaller landowners should also benefit from property development and bring in Foreign Direct Investment (FDI) to the island. Numerous criticisms was, however, laid against those two schemes, the main one being that we were creating ghettos for the rich foreigners who were living by themselves and among themselves and not sharing or participating in Mauritian life. New ideas, therefore, had to be introduced.

After the world financial crisis, the slowdown of the property market and the wish to better integrate foreigners investing in real estate, it was felt that a new scheme was needed and so was born the PDS in May 2015. The Investment Promotion (PDS) Regulations 2015 were designed to govern the new set up.

The objects and legal basis of the PDS

The objects of the Scheme are to promote inclusive development and provide for living, employment and leisure opportunities for Mauritians, members of the Mauritian Diaspora and foreigners. The PDS also aims to ensure that the development accrues to the neighbouring communities and to small entrepreneurs. The Regulations define who can be a PDS developer, what a PDS certificate is and what are the obligations and responsibilities of the PDS Company. It provides the legal framework for the implementation of the PDS project and the organization for the PDS Social Fund. Finally, the Regulations enact the due process for the acquisition and resale of property whether residential...