01 April, 2008

Beach Development

Is it Illegal to Build a Villa on a Beach. I received the following email. I thought of just answering it. Then, I thought, “Why not make it a post?” This is the result. First, the email:

“Dear Mitch:

Sunset Homes is building a large beach front villa next to Bananas by the Sea on Meads Bay. The place is huge. I thought beachfront personal dwellings were against the law in Anguilla. Also, Viceroy has erected a large sales office right on the beach - how can that be allowed? Photo attached.”

First, on the building of beach villas, generally. No, there is no law against building a beachfront villa. For this to be prohibited would mean that there is in Anguilla some sort of enforceable zoning or planning law that is being infringed. Those of you who read this blog regularly, will by now be aware that there is no enforceable Planning Act in Anguilla. Such law as there is, is so antiquated and irrelevant to modern town and country planning concepts as to be laughable. It is a law that we inherited from the old St Kitts Administration, before the Anguilla Revolution of 1967.

Second, Yes, there was a policy at one time of making it difficult for villas to be built on the beachfront. Early in Emile Gumbs’ administration, after people complained about Chuck Norris being given permission to purchase a lot of land on West End Shoal Bay, the government established and published a policy that in future no licences would be given for the building of a villa on a beach. Villas were relatively non-productive, and would be discouraged. Beaches were to be reserved for the development of Anguilla’s tourism plant, ie, hotels.

When a non-Anguillian applies for an Aliens Landholding Licence, as is obligatory, to own property on Anguilla, it is a simple matter to prohibit the acquisition of land on a beach for the purpose of building a villa. Aliens were not allowed to do it. When it came to an Anguillian building on a beach, that tool or leverage never existed. The Anguillian is not required to apply for any licence to build on a beach. There is no law restricting building on the beachfront. Any officer of the Planning Department who contemplated prohibiting an Anguillian from building on a beach would have been slapped down by the Attorney-General’s Department. It is the Attorney-General who would advise on any action by any Department that will have legal consequences, at least, the strong likelihood of having to defend a legal suit. The A-G would know that such a case could not be won. So, even before the policy of using administrative discretion to limit building on beaches was relaxed, Anguillians have been building on the beachfront.

Third, is the question of fronting. Fronting occurs when an Anguillian pretends to own some or all of a business or property in order to assist the real, foreign, owner from having to comply with alien taxes and other burdens. When the property is land or a business, the Anguillian puts his name forward to government as the owner. When the property is a company, the Anguillian holds some or all of the shares and directorships “in trust” for the foreigner. The share ownership is accompanied by pre-signed, undated share transfers to permit a swift and unilateral transfer of the shares out of the hands of the Anguillian. This is generally a crime. That has never stopped it happening. Law firms have been accused of doing it. Politicians have been alleged to do it. Some civil servants are said to supplement their meager income by doing it. Even ordinary Anguillians do it. It is one of the commonest industries in Anguilla today. Many of the fine “locally owned” developments on the island are owned and funded by foreigners. When the development is sold, the Anguillian is supposed to receive his compensation by way of a small but healthy percentage of the proceeds of sale.

What these foreign speculators are only now beginning to learn is that, unless the illegal fronting is organised by an attorney with experience in these matters, they are likely to get ripped off by the Anguillian. What typically happens is that the Anguillian holds out for more than the agreed reward. He pretends that he thought he was really the majority owner. He then threatens to put a spoke in the works unless the demanded payment is made.

I have no idea who owns Sunset Homes. Nor, have I any reason to believe they are doing anything illegal. They probably fall into the category of an Anguillian owner doing what he wants with his own land. That is not against the law.

That is simply evidence of Anguilla not yet being mature enough to establish clear and fair planning laws.

Back to the Constitution next post.


  1. Zoning is evil.

    Houston, Texas, for instance, has no zoning laws whatsoever. Private covenants between property owners, certainly, but no zoning at all.

    You don't see Houston falling into the sea, or rotting in its own, heh, development. Far from it. Houston is not only one of the fastest growing towns in the world, it is also rated one of the greatest places to live in the United States. This in a climate with 100F temperatures, 100% humidity, and blue skies in the summer (you have to mow your lawn twice a week just to keep up with it) -- not to mention hurricanes :-) -- and built on a former pestilential swamp, to boot.

    One of the nice things about Anguilla is its freedom, on paper if not in actual practice, from the encumberance of hyper-regulation that has destroyed large swathes of the formerly-developed Western world. Detroit has extensive zoning. It is a wasteland. Michigan is one of the most highly regulated states in the US, for the most part, is the only state in the that country that had a recession while the rest of the economy was booming. Before Thatcher, it was impossible to build anything in London, which was going the way of Detroit. New York, before Guiliani, was in the same shape and de-regulation turned it around. And the canonical example, Shanghai, is almost completely deregulated, no mater what draconian laws the communists still have on their books, and it is positively exploding with new wealth, created literally ex nihilo, in the space of a couple of decades.

    The pendulum is swinging the other way in the rest of the world, particularly the US, with, I predict, the inevitable disastrous consequences in the long run, but that's no excuse for Anguilians to abolish property rights here as well just because the rest of the world is going to go to hell in a hand-basket. :-)

    People should build what they want on their own land. When people build a factory in a neighborhood, if you want to pick the "worst" possible example, they do it for an economic reason. The abutters to the new "industrial blight", strangely enough, *make* money in the long run, because industrial land is worth significantly more than residential land. Before the implicit confiscation of zoning laws became ubiquitous, this is how industry developed in places like Chicago, and New York, and London. Chicago, for instance, completely burnt to the ground and was rebuilt in less than a decade. San Francisco the same. Not to London itself. Over regulation almost killed all three

    Is Anguilla going to turn into a mega-city and slink into the ocean of its own weight if it has no zoning? Of course not. There are few natural trade routes (rivers, large natural harbors, mountain passes, straits, whatever) running through this part of the Caribbean.

    Though It is nice to think that Anguillians are such competent, strong, determined people that if they completely de-regulated trade, they would, like the China traders of early 19th century Massachusetts, or, horrors, the empire-era British, make The Rock a capitalist paradise, and take over the world. :-).

    Whatever happens, though, Anguillians should understand that the easiest ways to make their life easier, financially, and otherwise, is to *not* pass so many laws that, eventually, *everyone* is a criminal. Especially laws about what people do with their own land and other property. That way penury lies.

  2. I will be the first to acknowledge that this is a fair and balance post.

  3. Anonymous if you'd seen the ruination of some of Europe's loveliest coastline by overdevelopment (e.g. Spain & Bulgaria) you'd take a different view. Unless of course you just don't care as long as you get what you want.

  4. catch 22. land rights vs. land use. i would love to open a reggae bar in my purely residential island neighborhood, because it would be a blast; and to piss off my florida white trash neighbors (i'm white also). however, peace is tenable, and i would prefer to adjudicate a reasonable resolution as "friends", rather than create a battle zone over my wants. - scotty

  5. Mr. Mitchell, are you saying that Anguiullians holding shares in trust, as you put it, for foreigners is a a crime? So the people and companies who are in the business of providing company management services,like you used to with the boards on your office building walls with thousands of offshore companies, are committing illegal acts??

  6. Repeat after me:

    "It's not my land."

    Say that to yourself three times, and maybe you'll get the hint.

    As Freidrich Hayek said once, "Externalities are the last refuge of the dirigistes."

    (As for the definition of "externalities" and "dirigistes", Wikipedia is your friend. I'd start at 'dirigisme", myself, but that's just me...)

    Finally, as to whether or not to start "Bob's Bush Bar and Machine Gun Range" next to your neighbors in, say, the big blank spot on the map off of Mango Garden Road (just down the hill from that quiet, off-the-grid ashram at bottom of, heh, the back side, of White Hill...), see "covenants", above.

    Meanwhile, the current equivalent of someone who needs to recite the third paragraph above is a certain brand-new -- or at least freshly-relocated -- beach bar at the end of Sandy Ground. It seems that an abutter just bought (leased?) a "villa" on some of the best bar-building real estate in the known universe and is complaining about the noise.

    Meanwhile, I repeat:

    Zoning is Evil.

    Better Spain and Bulgaria than Cuba and North Korea, while we're talking about "progressive", not to mention "pristine", giant blank spots on the "lights out" map of the globe.

  7. Section 9 of the Aliens Landholding Regulation Act makes it an offence for an Anguillian to hold land in trust for an alien.

    The same section makes it a summary offence triable by the Magistrate. The fine is EC$1,250.00 or three months imprisonment.

    Section 3 says that any land held in trust for an alien is liable to forfeiture by the government.

    What the Act does not do is to make it an offence to hold “any interest in land” in trust for an alien. What some lawyers have done is to advise that a trust of the shares in a company that owns land is not caught. So, they persuade the foreigner to form one or more companies to buy land in Anguilla without a licence. The lawyer or his secretaries hold the shares and directorship in trust for the alien.

    This is a loophole that some lawyers have in vain been asking government to block for many years. It is a simple drafting thing to do.

    When a lawyer used this loophole in St Vincent for a wealthy foreign client some years ago, the government found they could not prosecute the lawyer or the client. Nor could they forfeit the land. What they did was to declare the alien a prohibited immigrant. They commenced steps to acquire the land. The foreigner could not come back to St Vincent. He never got back his money.

    This trick does not happen in St Vincent any longer.

    How come we in Anguilla so seldom learn from the mistakes of others?



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