_{Photo: Celeste Pederson, Real Estate Broker}

U.S.-trained real estate broker advocates for urgent licensure in Belize

COROZAL, Mon. June 17, 2024

Celeste Pederson, a real estate broker behind Celeste Kimberly Properties, was licensed in the state of California, USA, in commercial real estate, and recently started practicing in her mother’s hometown, Corozal. Since she started doing business in the real estate world in Belize, there have been at least two land fraud scandals that have erupted, which have underscored the very urgent need for oversight and regulation. For Pederson, that means a licensure system for real estate agents, and a Multi Listing System (MLS) showing all homes available on the market, ownership, sale prices and dates, etc.

She explained that to get her license in the first place, she had to qualify to take, and then pass, a stringent exam. One requirement to even apply to become a real estate agent is honesty; therefore, a background check is required. Subsequent to receiving a license, an agent must engage in continuing education programs, as laws are amended and practices change, particularly with the advent of social media.

According to the California Department of Real Estate website (https://dre.ca.gov/Examinees/RequirementsBroker.html), to be approved to sit the exam, applicants must pass 8 college-level courses, including Real Estate Practice; Legal Aspects of Real Estate; Real Estate Finance; Real Estate Appraisal; Real Estate Economics or Accounting; and a three other courses from the following options: Real Estate Principles, Business Law, Property Management, Escrow, Real Estate Office Administration, Mortgage Loan Brokering and Lending, Advanced Legal Aspects of Real Estate, Advanced Real Estate Finance, Advanced Real Estate Appraisal, Computer Applications in Real Estate, and Common Interest Developments. In the case of Belize, it has been described as a free-for-all, as people without any solid real estate background are entering the sector in droves.

This lack of qualifications can be detrimental to buyers. Pederson commented, “Another practice unique to Belize is the lack of clear role definitions for real estate agents, which are established in countries that require licensing. Real estate agents are not lawyers or financial professionals, and should not be giving legal or financial advice.” She noted that few Belizean lawyers specialize in real estate, and even fewer agents have a solid foundation in real estate law and contract comprehension. She highlighted, “As a result, contract negotiations can quickly become murky, with agents unable to represent their clients appropriately, and lawyers potentially capitalizing on this knowledge deficit.”

But beyond a lack of qualifications, there is the matter of deliberate schemes to defraud buyers of their life’s savings. Regarding this, Pederson remarked, “… what they’re doing is obviously already illegal. So, we just need to enforce the laws that are already in place when that happens. But that’s also a sign of chronic misconduct. If someone didn’t hatch the scheme overnight, they had been practicing this for years, and maybe the first people that they defrauded, if there was an easy recourse for them to be reported, then they wouldn’t have the opportunity to perfect it and continue doing this for years.”

Pederson described some of the requirements that are in place by way of oversight in California. Among them is the obligation that agents display their license numbers on all advertisements, including signage, business cards, and email signatures. She stated, “This transparency allows for any unethical or illegal actions to be reported to the state licensing authority, resulting in immediate fines that can exceed thousands of dollars, with repeat offenses leading to disbarment.” Notably though, whereas the belief is that when international real estate brands operate in Belize, they will continue to function with the same high level of trust and reputability, Pederson points out that they are only required to “operate within the standards of the local governing body, which, in our case, are minimal to non-existent.” Instead, according to Pederson, what we have in Belize are private boards competing to act as the governing body and “… that’s like making the mouse in charge of the cheese factory.” “How are we going to investigate and regulate ourselves?” she questioned.

As a result of the looseness that prevails in the sector in Belize, Pederson says foreigners may erroneously think they are entitled to rights and standards applicable elsewhere. For instance, they would expect the disclosure of structural defects or past events that could inhibit future sales, like a crime at the home, that would diminish market value. However, she says that here in Belize they may run into “home inspectors who provide kickbacks or falsely pass inspections to facilitate rushed and subpar closings.” Buyers also expect a clear path for recourse, which does not currently exist “if an agent misrepresents a property or acts unethically during a transaction.” Furthermore, Pederson notes that in countries with stringent licensing systems, “Brokers and business owners are primarily responsible for protecting consumers, and are liable for all infractions that occur within their brokerage. Punishments can range from fines and disbarment to jail time. Here in Belize, however, the consequence seems to be merely the inconvenience of rebranding.”

Interestingly, some real estate agents in Belize encourage foreign land buyers to purchase Belize property using IBCs (International Business Company) to avoid paying the 8% stamp duty to transfer title. Due to the IBC structure, IBCs are not required to pay local taxes. They describe it as tax optimization for offshore investment.

Speaking about the loss in revenue incurred by the Government as a result of land fraud, Pederson remarked, “Belize is such a beautiful country with so much prime real estate, and in my opinion, we’re giving it away. And if more protections were put in place, more investors would step into our market, our transactions would move so much more smoothly, and these prices would go up, and so would the stamp tax and everyone would benefit and win.” We asked whether she thinks Belize should stop selling crown land to profiteers who flout Belizean laws and disregard environmental protections. She responded, “A lot of this waterfront land, mangrove land, it’s being essentially almost given away with the low prices that are being given to developers. I’m not sure what the motivation is. Maybe it’s, ‘if they develop the land, maybe we’ll start getting some property tax moving in;’ but maybe it’s best that the land isn’t developed and given away so so freely and so cheaply, because maybe it would serve Belize better as natural marine habitats—and if we are going to sell it, sell it for top dollar.”

Amandala has learned that the Ministry of Natural Resources is currently working on a draft real estate law.