The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Homeowners at the controversy-plagued Oceania Heights project are demanding that the developers repay them a collective $6.95 million, although one yesterday said he expected an offer of nothing better than “50 cents on the dollar”.

Tribune Business has obtained documents detailing the demands made by 13 homeowners and a contractor of Canadian citizen, Howard Obront, and Bahamian attorney, Anthony Thompson, just as a new row between the two sides erupted.

The source of the latest rift at the upscale Exuma-based development is the Bahamas Electricity Corporation’s (BEC) decision to cut off electricity to the pumps that provide Oceania Heights’ entire water supply, due to a $5,681 unpaid bill.

This has left the entire project without water supply since last Wednesday, with Mr Obront and several homeowners now squabbling over who should pay what in settling the BEC bill - and for repairs to the pump system and its motors themselves.

Christopher Fleming, one of Oceania Heights’ homeowners, and who is among Mr Obront’s most vehement critics, yesterday said the developer was supposed to pay 30 per cent of the bill.

However, attorneys for Mr Obront argued that the homeowners were making “unfair and unreasonable” demands of their client, and that all homeowners should pay their fair share.

Fred Smith, the Callenders & Co QC and partner, said given that there were 12 properties currently built and in use at Oceania Heights, each owner should contribute 1/12th of the water system’s electricity bill.

Detailing the cause of the latest Oceania Heights blow-up, Desmond Williams, the Exuma-based manager for many of the homes at Oceania Heights, told Mr Smith via a February 14, 2013, e-mail: “On Wednesday of this week BEC suspended service to the electric meter which is utilised to operate the three water pumps at Oceania Heights.

“Without the operation of the pumps water service at Oceania is non-existent. With both residents and guests in residence, the situation is problematic.”

Mr Fleming yesterday told Tribune Business that based on his conversation with Mr Williams, who had spoken to Mr Obront, the developer was insisting that he receive a $600-plus credit for previously paying someone to come and repair the pumps one year ago.

This, Mr Fleming said, stemmed from the pump motors burning out. The motors were re-wired and put back in, but burned out again in January 2013.

The homeowners and Mr Williams, alleged Mr Fleming, “spent time and money having them repaired” yet again. The latter claimed that once the pumps and motors were disassembled, the amount of sludge clogging them suggested they had not been maintained properly since first being installed in 2005.

This version of events is supported by Mr Williams’s e-mail to Mr Smith, which said of the pump motor burn-out: “Because this was the second occurrence in less than one year, we took the complete system apart for inspection.

“What we discovered was ‘sludge’ in the pump mechanism which required the motors to become over-stressed. It became clear that the pump mechanism was never maintained in the past, although the homeowners paid for the maintenance to be performed.

“Both the electric motors and pumps were sent out (to Nassau) to be repaired. The cost of the repairs was funded by the existing homeowners. Howard [Obront] did not pay anything towards these repairs.”

Then, to add - at least in the eyes of the homeowners - further insult to injury, BEC shut off electricity supply to the water pumps within weeks of their repair.

Mr Williams told Mr Smith: “When the electric meter was shut off I did some investigation. What I discovered was the electric bill was last paid in August of 2012.

“The manner in which the bill was calculated is consistent in how the water bill is calculated. The bottom line is we are asking Oceania Heights to pay approximately 25 per cent of the electric bill, which leaves the remainder as their proportional share of the motor and pump repairs.

“Motor and Pump repair $1,200, proportional share of electric bill $1,600.”

Mr Fleming yesterday told Tribune Business: “What we’re asking him [Mr Obront] to pay is his proportionate share, 29.9 per cent.

“The homeowners are paying 70 per cent of the bill, he is paying 30 per cent, and he won’t pay his share. People should pay what their usage is.”

However, Mr Smith disputed this, and told this newspaper: “Each person should pay their proportionate part, rather than get my client to pay 50 per cent.

“They’re demanding my client pay 50 per cent. That is completely unfair and unreasonable, and my client suggests that each of the 12 homes pay their proportionate share of 1/12th.”

Agreeing that every lot buyer at Oceania should contribute to water supply electricity costs, Mr Smith said that given the absence of any community amenities “yet” and only 12 homes built, the burden should be borne by those homeowners.

Mr Obront owns a property at Oceania Heights, and Mr Smith said: “There is such a thing as fairness. Why should he pay 50 per cent?”

But Mr Fleming suggested that Mr Smith was incorrect. He argued that every homeowner’s monthly water usage was calculated as a percentage of total consumption, and this was multiplied by the electricity bill to generate each homeowner’s share of the latter - not a straight 1/12 divide.

Mr Fleming also said there were nine homes currently in use at Oceania Heights, three of which were now in the hands of the banks - Butterfield Bank (Bahamas) and CIBC FirstCaribbean International Bank (Bahamas) included - after their owners “walked away” in frustration.

And he added that he was set to report the latest Oceania Heights mishap to Deputy Prime Minister Philip Davis’s office, describing it as a “health and safety issue”.

Mr Fleming said tenants renting Dr Shalev’s property, a family of four, had left already due to the absence of water.

The latest dispute comes as Tribune Business obtained details of the specific demands made by the Oceania Heights homeowners for compensation.

The document, dated January 28, 2013, suggests compensation ranging from just providing clear title documents to the properties of Teresa Cope and Dr Roberge, to $1.46 million for Mr Fleming.

Other buyers are seeking six-figure refunds for alleged ‘double selling’ of their lots, of because they were sold lots whose ownership was questionable due to a court case that went all the way to the Privy Council.

Asked what he expected to receive as a settlement offer, Mr Fleming told Tribune Business: “That they pay 50 cents on the dollar over a five-year period. I don’t expect anything better than that. I can be optimistic, but I’m a realist.”

Mr Fleming said Pedro Rolle, the Exuma Chamber of Commerce’s president, had told him attorneys representing Oceania Heights’ principals had met three times.

“The meetings have been productive, and attorneys or the principals said they were committed to coming out with a solution to resolve all the problems.”

Mr Fleming said they had promised to put something in writing to the homeowners this week, and had not disputed the compensation figures put forward by the homeowners.

The homeowners’ proposal said: “The remedies proposed herein have been pared back to what property owners consider bare bones compensation.

“Please note that no compensation is being sought for several costly matters: legal fees; lost interest on monies tied up for more than a decade (interest that in many cases exceeds the principal); maintenance fees that have been paid, etc).”

The proposal also suggests that the Government fund the amenities long-promised for Oceania Heights by the developers, but never delivered.

“With regard to promised community amenities (restaurant, fitness centre, path to beach, finish coat on all roads, proper water system etc), these were all paid for, via the property purchase prices,” the homeowners alleged.

“There are no such amenities. These amenities were included in the approved plan of subdivision, yet no monitoring was done by Public Works following subdivision approval to ensure vendor performance on construction of these amenities.

“The owners therefore see a role for government in finding a solution to this problem. The proposal is that government fund the construction of these amenities – with suitable community-building/economic development optics (government signage and other communications, linked to the overall economic development of Exuma.”

The Oceania Heights homeowners suggested a partnership between the Government and themselves on this initiative, and proposed creating an Oceania Heights Community Association.

And they also proposed a joint Oceania Heights/February Point community association be formed, linking the two Exuma-based developments.

As for the thorny issue of Stamp and real property taxes that should have been paid on their purchases, the homeowners proposed: “With regard to Stamp Duty owing and real property taxes, the property owners propose that for those who have not yet paid Stamp Duty, commercial appraisals should be conducted and used as the basis for Stamp Duty owing and for real property taxes going forward.

“Furthermore, the property owners propose that real property taxes calculated to date should be forgiven or paid by Oceania Heights Ltd (OHL,) due to the fact that almost all of the properties continue to rest in trusts held by OHL.”