LEASE OF NICIL LANDS TO THIRD PARTIES.
There has been much confusion and misinformation circulating in the media and about the alleged disposal of lands which were the property of NICIL by the Lessees to third parties without the written permission of NICIL.
Set out below are the applicable laws and regulations in relation to the disposal of various interests in land held by NICIL which are subject of the ongoing Police Investigations.
Common Misconception # 1.
All lands which are held by the State or corporation or companies in which the State owns all the shares are State Lands.
The legal position.
1. All lands owned or held by the State or Corporate entities in which the State owns all the shares are not necessarily State lands.
2. State Lands are restricted to lands which are referred to in the State Lands Act Chapter 62:01. These lands do not refer to lands held by transport.
3. The transfer of State lands is governed by the provisions of the regulations issued under the State Lands Act Chapter 62:01 of the laws of Guyana.
4. Regulation 12 requires every holder of state land whether by lease, licence or permission who would like to transfer their lease licence or permission, to make an application in writing to transfer the lease licence or permission.
5. Lands owned or held by transport are not governed by or subject to the State Lands Act. They are governed entirely by the provisions of the Deeds Registry Act Chapter 5:01 of the Laws of Guyana.
6. Section 23 of the Deeds Registry Act provides “ From the 1st January 1920 every transport of immovable property other than a judicial sale transport shall vest in the transferee the full and absolute title to the immovable property or to the rights and interest therein described in that transport, subject to
(a) Statutory claims
(b) Registered incumbrances
(c) Registered interest registered before the date of the last advertisement of the transport in the Gazette
(d) Registered leases registered before the date of the last advertisement of the transport in the Gazette
Provided that any transport, whether passed before or after the 1st January 1920, obtained by fraud shall be liable in the hands of all parties or privies to the fraud to be declared void by the Court in any action brought within twelve months after the discovery of the fraud or from the 1st October 1925, whichever is more recent.”
7. Lands held by transport are only subject to the conditions set out in the transport. There is no law or regulation which requires that any written permission be obtained from anyone before land or any interest in that land is transferred by the owner/ holder of the transport to a third party.
8. There is no law or regulation which requires any State owned company or corporate entity to require written permission before any interest in the land is transferred by a Lessee (tenant)..
9. The NICIL lands (Immovable property) subject to the present ongoing Police investigations were held by transport by NICIL There is no condition or covenant in the transport which required that written permission be obtained from NICIL or anyone else before a Lessee(tenant) transferred any interest to a third party.
10. NICIL entered into leases with various entities which expressly conferred on the lessee the right to transfer their interest without the written permission of NICIL. It also entered into leases with various persons which either required their permission to transfer to a third party and some which did not contain that provision.
11. There is no law which requires state corporations or state companies to include in any lease of property held by transport by them, a provision that the written permission of NICIL be first obtained.
Common Misconception # 2
The State lost money when NICIL lands were “sold” by the Lessees to third parties.
The legal position.
1. NICIL leased various properties to Lessees (tenants) at prevailing commercial rates based on the Government valuation of the property.
2. It means that the Lessee (tenant) did not “buy” any land, they merely entered into a lease with NICIL for twenty years and are obliged to pay the rent for the entire period unless the lease was terminated.
3. The Lessee (tenant) therefore could not “sell” the property as they did not own the property. All the Lessee (Tenant) held was a lease to the property for a period of 20 years or such period stated in the Lease.
4. When the lessee (tenant) entered into an agreement with a third party to “sell” their interest in the lease, they could only “sell” or dispose of what they had obtained from NICIL which is the remainder ( remaining time) of the lease. For example they could not pass transport of the property to a third party because they did not own the transport. NICIL remains the owners by transport of all the properties under investigation.
5. When the Lessee “sold” their interest the new Lessee (tenant) would still have to pay NICIL the rent due under the original lease agreement so the State nor NICIL has lost no income as every subsequent Lessee (tenant) is obliged to pay NICIL the same commercial rental rates for the property as the original tenant.
6. In other words the new Lessee (tenant) steps into the shoes of the original Lessee (tenant) and is obliged to pay NICIL the same rent as the original lessee.
7. If the Lessee (tenant) had not “sold” their interests, NICIL would get the same rent under the Lease. NICIL gets what it had agreed to receive as rent the property for from the start to the end of the lease. No loss to NICI or the State.
Dated this 28th day of November 2020.
C.A. Nigel Hughes.
Attorney at Law for Calvin Heath London.