Emergency Relief Guarantee Fund Act


Published: 1999-11-11

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Emergency Relief Guarantee Fund Act
EMERGENCY RELIEF GUARANTEE FUND [CH.35 – 1


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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

EMERGENCY RELIEF GUARANTEE FUND
CHAPTER 35

EMERGENCY RELIEF GUARANTEE FUND

ARRANGEMENT OF SECTIONS

SECTION

1. Short title.
2. Interpretation.
3. Minister to be a corporation sole.
4. Powers of Minister to guarantee loans.
5. Application for guaranteed loan.
6. Conditions for the grant of a guaranteed loan.
7. Special interest rate.
8. Emergency Relief Fund.
9. Authorised limits on guaranteed loans for residential property and businesses.
10. Accounts and audit.
11. Annual report.
12. Borrower to repay to Government sums paid from the Fund.
13. Quarterly reports by approved lender.
14. Settlement of guaranteed loan.
15. Offences in respect of guarantee.
16. Regulations.
17. Exemption from customs duty.
18. Exemption from stamp duty.
19. Registration of documents.
20. Preparation of deeds etc.
21. Exemption from legal fees.
22. Statement of Administrator.
23. No documentary title to property.


EMERGENCY RELIEF GUARANTEE FUND [CH.35 – 3


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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

CHAPTER 35

EMERGENCY RELIEF GUARANTEE FUND
An Act to establish an Emergency Relief Guarantee

Fund to allow the Government to guarantee loans for the
relief of persons who have suffered hardship and loss as a
result of a disaster and for purposes connected thereto.

[Assent 8th November, 1999]
[Commencement 11th November, 1999]

1. This Act may be cited as the Emergency Relief
Guarantee Fund Act, 1999.

2. In this Act —
“approved lender” means —

(a) Bahamas Development Bank;
(b) Bank of The Bahamas Ltd;
(c) Barclays Bank PLC;
(d) Barclays Finance Corporation (Bahamas)

Ltd;
(e) British American Bank (1993) Ltd;
(f) CIBC Bahamas Ltd;
(g) Citibank N.A.;
(h) Commonwealth Bank Ltd;
(i) Finance Corporation of Bahamas Ltd;
(j) Royal Bank of Canada;
(k) Scotiabank (Bahamas) Ltd;
(l) Workers Bank Limited; or
(m) any other financial institution, insurance

company or credit union approved by the
Minister;

“disaster” means any natural disaster or any other
exigency declared by the Minister of Finance
under the Tariff Act by Notice in the Gazette;

“Fund” means the Emergency Relief Fund estab-
lished under section 8;

“guaranteed loan” means a loan guaranteed by the
Minister under section 4;

44 of 1999

Short title.

Interpretation.

Ch. 295.

CH.35 – 4] EMERGENCY RELIEF GUARANTEE FUND





STATUTE LAW OF THE BAHAMAS [Original Service 2001]

“Minister” means the Minister responsible for dis-
aster preparedness or such other Minister as
may be appointed by the Prime Minister.

3. (1) The Minister shall, as respects the functions
assigned to him by or under this Act, be a corporation sole,
with power to acquire, hold, lease, and dispose of property,
to enter into contracts, to sue and be sued and to do all
things necessary for the purposes of this Act and all
property transferred to the Minister by this Act or any other
Act or which otherwise becomes vested in him shall be
held by him in trust for Her Majesty in right of Her
Government of The Bahamas for the purposes of this Act.

(2) Upon and by virtue of the appointment of any
person to be the Minister charged with the responsibility
for the administration of this Act, the benefit and burden of
all deeds, contracts, securities and things in action vested in
his predecessor at the time of his predecessor ceasing to
hold office shall be transferred to and vested in and enure
to the person so appointed in the same manner as if he had
been contracted with instead of his predecessor and as if
his name had been inserted in all such deeds, contracts or
securities instead of the name of his predecessor.

4. (1) The Minister may in such manner and on
such terms and subject to such conditions as may be agreed
between him and an approved lender —

(a) guarantee the discharge by a borrower of his
obligations under any agreement (in this Act
referred to as a “guaranteed loan”) which may
be entered into by the borrower with an
approved lender in respect of any borrowing or
under any deed, agreement, promissory note or
other instrument issued pursuant to any such
agreement; and

(b) assume such other obligation as may be agreed
between the Minister and an approved lender in
relation to or pursuant to any such deed,
agreement, promissory note or other instrument.

Minister to be a
corporation sole.

Powers of
Minister to
guarantee loans.

EMERGENCY RELIEF GUARANTEE FUND [CH.35 – 5


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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

(2) Section 17 of the Financial Administration and
Audit Act shall not apply to any guarantee made by the
Minister under subsection (1).

(3) The Minister may by Order published in the
Gazette specify a financial institution, an insurance
company or a credit union as an approved lender for the
purposes of this Act.

5. Every application made under this Act by an
approved lender for a guaranteed loan shall be made to the
Minister within nine months immediately following the
disaster.

6. (1) Subject to subsections (6) and (7) a loan may
be guaranteed under this Act if all of the following
conditions are satisfied that is to say —

(a) the applicant is unable to meet the eligibility
requirements for obtaining a loan but the
approved lender is of the opinion that such
applicant is capable of making the payments of
the loan;

(b) the loan is made to a person who is not less than
eighteen years of age;

(c) the purpose of such loan is to repair or replace
occupied residential property, furnishings and
appliances damaged or destroyed by any disaster
or to replace or repair businesses damaged by
any disaster including rental accommodations,
fishing boats, engines, farm buildings, farm
equipment, citrus or fruit trees, vegetable crop,
livestock, restaurants, processing plants and
other commercial enterprises;

(d) the loan does not in the case of a residential
property exceed fifty thousand dollars or in the
case of a business does not exceed seventy-five
thousand dollars;

(e) the loan is made on terms that all money
borrowed under the loan shall in the case of
residential property be repaid within a period of
twenty years from the date of the loan or in the
case of a business be repaid within a period of
ten years from the date of the loan; and

Ch. 359.

Application for
guaranteed loan.

Conditions for
the grant of a
guaranteed loan.

CH.35 – 6] EMERGENCY RELIEF GUARANTEE FUND





STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(f) the applicant has provided to the approved
lender satisfactory estimates for completion of
any works in respect of paragraph (c); such
estimates to be approved by the Administrator of
the district in which the work will be carried out
and in the case of works in New Providence, by
the Director of Public Works.

(2) Where the purpose of a loan is for the repair or
replacement of residential property, the owner shall satisfy
the approved lender that the owner occupied such property
immediately prior to the disaster and that such owner
intends to occupy that property as soon as it has been
repaired or replaced.

(3) Where the purpose of a loan is for the repair or
replacement of any business, the owner of such business
shall satisfy the approved lender that he operated such
business immediately prior to the disaster and that he
intends to operate such business as soon as it has been
repaired or replaced.

(4) The Minister may require that there is a valid
policy of insurance on the life of the borrower with an
insurance company registered under the Insurance Act for
such an amount as is sufficient to cover the full amount of
the loan or require the borrower to take out a mortgage
redemption policy with an insurance company registered
under the Insurance Act and to maintain the policy by
regular payment of premiums and assign the benefits of the
policy to the approved lender and deposits it with the
approved lender.

(5) Where a borrower does not qualify for a policy
of insurance, the Minister may waive the requirement
referred to in subsubsection (4).

(6) The Minister may require that every premises
which is a security for a loan guaranteed under this Act
shall be insured and kept insured by the approved borrower
against all risks as may be prescribed by the Minister for
the purposes of this Act.

(7) Notwithstanding subsection (1)(a), where an
applicant is able to meet the eligibility requirements for
obtaining a loan and satisfies all the other conditions of this
section he may be granted a guaranteed loan under this
Act.

Ch. 346.

Ch. 346.

EMERGENCY RELIEF GUARANTEE FUND [CH.35 – 7


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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

(8) The approved lender may with the approval of
the Minister grant a guaranteed loan to an applicant with a
first legal mortgage.

7. The rate of interest chargeable by an approved
lender and payable by a borrower on any guaranteed loan
under this Act shall —

(a) in the case of residential property be at a rate not
exceeding the prime rate; and

(b) in the case of any other property be at a rate not
exceeding the prime rate plus one per centum.

8. (1) For the purposes of this Act the Minister
shall establish a fund to be known as the Emergency Relief
Fund into which the Minister shall cause to be paid the sum
of one million dollars and all payments required to be
made by the Government pursuant to this Act shall be paid
out of the Fund.

(2) The Fund shall consist of —
(a) two per cent of every loan guaranteed under this

Act; and
(b) such money as may be provided from time to

time out of the Consolidated Fund of The
Bahamas.

(3) Whenever any sum is paid out of the Consolidated
Fund under subsection (2), the Minister shall prepare a
statement and lay it before the House of Assembly.

(4) Without prejudice to the provisions of
subsection (2), where the Fund at the end of any financial
year exceeds ten percent of the total amount of guaranteed
loans in force, the Minister shall apply the surplus towards
repaying to the Consolidated Fund all sums paid there-
from into the Emergency Relief Fund in accordance with
subsection (3).

(5) The Minister may from time to time invest any of
the liquid assets of the Fund in commercial bank deposits and
securities which are obligations of the Government, as well as
securities approved by the Governor-General.

(6) No payments shall be made out of the Fund except
such payments as are authorized to be made by this Act.

Special interest
rate.

Emergency Relief
Fund.

CH.35 – 8] EMERGENCY RELIEF GUARANTEE FUND





STATUTE LAW OF THE BAHAMAS [Original Service 2001]

9. (1) The aggregate amount of all borrowings in
respect of all residential property guaranteed by the
Government under this Act shall not exceed twenty million
dollars or such greater sum as may from time to time be
specified by resolution of the House of Assembly.

(2) The aggregate amount of all borrowings in
respect of business ventures that are guaranteed by the
Government under this Act shall not exceed ten million
dollars or such greater sum as may from time to time be
specified by resolution of the House of Assembly.

10. (1) The Minister shall keep proper accounts and
other records in relation to this Act and shall prepare
annually a statement of accounts in a form satisfactory to
the Minister of Finance which shall conform with
established accounting principles.

(2) The accounts of the Minister shall be audited by
an auditor appointed annually by the Minister and
approved by the Minister of Finance.

(3) Nothing in this Act shall prevent the Auditor-
General from carrying out any functions of auditing or
reporting on the accounts of the Minister at the request of
the Minister and for that purpose the Auditor-General shall
be entitled to have access to all books, records, returns and
reports relating to such accounts.

11. (1) The Minister shall, not later than four
months after the expiration of each year and in any event
not later than the thirtieth day of March next or such other
later date as may be approved by the Minister, submit to
the Minister of Finance a report containing —

(a) an account of his transactions throughout the
preceding financial year in such detail as the
Minister of Finance may direct; and

(b) a statement of the accounts of the Minister
audited in accordance with section 10(2).

(2) The Minister shall cause a copy of the report
together with a copy of the auditor’s report to be laid
before both Houses of Parliament and such reports shall be
published in one newspaper published and circulating in
The Bahamas.

Authorised limits
on guaranteed
loans for residen-
tial property and
businesses.

Accounts and
audit.

Annual report.

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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

12. If any sum is paid out of the Fund in section 8 in
respect of any liability incurred by the Minister under a
guarantee or other undertaking given in exercise of the
powers conferred by section 4, the borrower shall repay
such sum (together with interest thereon at such rate as the
Minister may prescribe) to the Fund, in such manner and at
such time as the Minister may direct.

13. An approved lender shall submit quarterly reports
to the Minister commencing at the end of the calendar
quarter which first occurs following the disbursement of any
guaranteed loan, in such form as may be prescribed and
otherwise required under this Act, listing all guaranteed
loans administered by it and which are in arrears at the end
of that quarter and advising the Minister of the steps taken to
recover such arrears.

14. (1) An approved lender, who is the creditor in
respect of a guaranteed loan shall notify the Minister where
default has occurred in respect of the loan.

(2) The approved lender shall make all reasonable
efforts to recover the loan and if such efforts have failed
the Minister shall within a period not exceeding two
months following the receipt in writing of the claim under
the guarantee pay to the approved lender all sums owing in
respect of the guaranteed loan and the approved lender
shall transfer to the Minister or his nominee, all rights to
and in respect of the guaranteed loan.

(3) The payment by the Minister to an approved
lender in respect of a guaranteed loan shall discharge the
Government from all liability to the approved lender in
respect of the guaranteed loan.

(4) In this section “default” means where payments
due under the loan have been outstanding for a period of
three months or more or where a business ceases to
operate.

15. If any person, in giving any information, making
any application or claim for the purposes of this Act,
makes any statement which he knows to be false in a
material particular, or recklessly makes any statement
which is false in a material particular, that person shall be
liable on summary conviction to a fine not exceeding three
thousand dollars.

Borrower to re-
pay to Govern-
ment sums paid
from the Fund.

Quarterly reports
by approved
lender.

Settlement of
guaranteed loan.

Offences in
respect of
guarantee.

CH.35 – 10] EMERGENCY RELIEF GUARANTEE FUND





STATUTE LAW OF THE BAHAMAS [Original Service 2001]

16. The Minister may make regulations for the
purpose of giving effect to this Act, and in particular for
prescribing anything by this Act required to be prescribed.

17. Notwithstanding anything to the contrary in the
Tariff Act and the Family Islands Development Encour-
agement Act (now lapsed), the Minister of Finance may by
Order in the case of a disaster declare that such building
materials as may be specified in that Order and imported
into those islands referred to in that Order for use in
construction in those islands shall be exempt from customs
duty and such exemption shall be for a period not
exceeding twelve months from the date of the Order.

18. Instruments or transactions relating to any loan
guaranteed under this Act shall be exempt form the
payment of stamp duty under the Stamp Act.

19. (1) All agreements, promissory notes or other
instruments including equitable mortgages used for the
purpose of this Act shall be endorsed by the approved
lender with the words “Emergency Relief Guaranteed
Loan” and shall be recorded in the Registry of Records.

(2) No fees required under the Registration of
Records Act shall be chargeable in respect of the recording
or the issue of any agreement, promissory note or other
instrument including an equitable mortgage used in
connection with or relating to any loan guaranteed under
this Act.

20. Notwithstanding section 22 of theLegal Profes-
sion Act, 1992 it shall be lawful for an officer of an
approved lender to draw up or prepare any agreement,
promissory note or other instrument including an equitable
mortgage for the purpose of this Act.

21. (1) An approved lender shall not be required to
retain the services of an attorney-at-law in respect of any
documents used in connection with or relating to any loan
guaranteed under this Act.

(2) A borrower under this Act shall not be required
to pay any legal fees for the preparation of any documents
used in connection with or relating to any loan guaranteed
under this Act.

Regulations.

Exemption from
customs duty.
Ch. 295.

Act 14 of 1997.

Exemption from
stamp duty.
Ch. 370.

Registration of
documents.

Ch. 187.

Preparation of
deeds, etc.
Ch. 64.

Exemption from
legal fees.

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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

22. (1) An applicant shall before a loan is granted
for the purpose of this Act provide to the approved lender a
statement, from the Administrator of the district on which
the property or business is situated, confirming that the
damage relating to any residential property or business was
caused by a disaster declared by the Minister under this
Act and that such property was occupied by the applicant
or that such business was operated by the applicant
immediately prior to the time of the disaster and this
statement shall be sufficient for the purpose of subsections
(2) and (3) of section 6.

(2) In the event of a disaster in the island of New
Providence the statement referred to in subsection (1) shall
be prepared by the Director of Public Works.

23. (1) Notwithstanding any other law to the
contrary an applicant in the islands specified by an Order
under subsection (3) for a guaranteed loan under this Act
who does not possess documentary title in respect of the
property upon which his premises is situated may be
granted a guaranteed loan.

(2) The applicant under subsection (1) shall be
required to sign a promissory note containing the terms and
conditions of the loan.

(3) The Minister may by Order designate the islands
to which subsection (1) shall apply.

(4) The approved lender shall in the case of those
islands specified in the Order referred to in subsection (3)
require an affidavit of the applicant sworn before the
Administrator of the district on which the property is
situated attesting to how the applicant came into posses-
sion of the property and the period of time the residence of
the applicant was constructed thereon.

Statement of
Administrator.

No documentary
title to property.