The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Homeowners at the controversy-plagued Oceania Heights project believe they can raise a $2 million-plus ‘war chest’ to finance the development’s infrastructure build-out, with beach access and a fitness centre the leading priorities.

Chris Fleming, the head of the development’s new Homeowners Association, told Tribune Business he felt around $2 million could be raised from a combination of maintenance fees; the sale of 12 unsold lots; and the payment of balances due on partially sold property.

“We have sent out to each of the owners an invoice and a write-up, and we’re expecting feedback from that,” Mr Fleming said, adding that the Homeowners Association Board had decided to set the annual maintenance bill at $1,000 per lot.

Estimating that this would raise between $80,000-$90,000 if everyone paid, Mr Fleming added: “We also have people who purchased property and did not complete their payments.

“The Board voted, and said these people would only have to pay 50 per cent of the outstanding balances. We should be able to raise $800,000 from that, as there are six-seven properties like that.

“Then, what we plan to do with the money, is put in the infrastructure that was long-promised. The first thing we hope to do is a workout centre, which is what people always ask for.”

The Homeowners Association’s formation, and assumption of control at Oceania Heights, marks the final stages in settling the dispute between the property owners and Oceania’s original developers, Canadian citizen Howard Obront and Bahamian attorney Anthony Thompson.

Mr Fleming said Pedro Rolle, Exuma’s Chamber of Commerce head and Oceania’s new president, had been due over the Christmas period to pick up from the now-cooperating Mr Thompson all the necessary paperwork for the Homeowners Association to establish a bank account with Royal Bank of Canada (RBC).

In his message to fellow Oceania property owners, Mr Fleming warned: “The current condition of the resort is poor; there has been nothing done in the last 12 months.

“Of the nine homes at Oceania Heights, three are currently owned by banks and one owner has stopped paying the mortgage. Two of the banks have chosen to work with the Homeowners Association while we will continue to reach out to the third.

“We continue to pursue legal redress, against the Obronts and we are hopeful that Government action will occur early next year.”

Mr Fleming described the planned rebranding of Oceania Heights as “appropriate”, adding: “The Board is committed to trying to restore the resort back to the promise we all thought we had invested.”

He told Tribune Business the Board was also reaching out to the owners of generational land that lay between Oceania Heights and the Queen’s Highway to see if the development could obtain an access path to the road and beach.

Mr Fleming said the Homeowners Association’s creation had allowed it to take possession of 12 unsold lots at Oceania Heights, although it has not yet taken over the 11 properties previously encumbered by a recent Privy Council case.

With the value of those 12 lots estimated at between $150,000-$200,000 each, he suggested that using a conservative $100,000 sales price, some $1.2 million could easily be raised to finance Oceania’s continued build-out and amenities.

Added to the balances owing on the part-paid properties, Mr Fleming said some $2 million could be raised and used to “put in a good deal of infrastructure”.

“The establishment of the Home Owners Association provided the owners with approximately 10 properties,” Mr Fleming said in his note to fellow Oceania investors.

“It is our intent to monetise the property and invest in resort amenities. There are also several people that have purchased property and have additional funds owed to the Homeowners Association. The two sources of funds will be utilised to install some of the promised amenities, beginning with the workout centre.”

And Mr Fleming told Tribune Business that he and the Association also believed a solution was also in the offing for the multi-million dollar Stamp Duty and real property tax payments issues at Oceania Heights.

Numerous Oceania homeowners have been hit with real property tax bills, totalling several hundred thousand dollars, going back several years after their names and addresses were passed to the Ministry of Finance.

However, in his note to other homeowners, Mr Fleming outlined a situation he feels makes it impossible for the Ministry to levy those bills.

The situation goes back to how Oceania Heights was originally structured, as a giant tax avoidance scheme, to make good on its promises to investors of ‘tax free real estate’.

Apart from not passing on Stamp Duty payments by real estate purchasers to the Treasury, attorney Mr Thompson also told buyers that if they allowed him to hold their properties ‘in trust’, as a Bahamian he would not be subject to real property tax.

Prior to 2007, undeveloped Family Island properties owned by Bahamians were not subject to real property tax, but the then-Ingraham administration changed the law to eliminate the loophole exploited by Mr Thompson.

However, as Mr Fleming pointed out in his note, many Oceania Heights owners do not ‘legally own’ their properties as Stamp Duty was never paid, and the conveyances never brought forward for Stamping.

As a result, he suggests the Ministry of Finance cannot levy the previous real property tax payments against them. The solution, Mr Fleming said, was for homeowners to bring their Stamp Duty current, then pay all real property taxes from this point forward,

“The great majority of the ‘owners’ do not actually (legally) own their property and are therefore not responsible for the payment of ‘real property tax,” Mr Fleming said.

“According to our attorney, if you legally do not own your property, you cannot be obligated to pay any back taxes due. This means that if you do not have the actual deed to your property, you do not owe any back taxes.”

To resolve the situation, Mr Fleming said Mr Thompson had agreed to attend a meeting at the Ministry of Finance with the homeowners.

“According to recent appraisals done by Sea Side Realty, the current average estimated value of the properties at Oceania Heights is between $150,000-$200,000,” Mr Fleming added.

“This is far lower than what each of us paid for our property, but that is the reality we face given the state of the development and the lack of amenities and improvements we were promised when we bought into this situation.”

He urged all homeowners to pay for an appraisal based on the new property values, and added: “The Deputy Prime Minister has agreed to support Stamp Duty and real property tax amounts based on the new, current appraised values.

“Only after the payment of Stamp Duty to the Government will you legally own your property. Our intention is to realise our vision for Oceania Heights - to build the community and lifestyle we thought we were buying many years ago - a luxury destination with all the amenities expected in an upscale community, surrounded by the beauty of the ever-changing ocean, exhilarating views, the warm salty breezes, the unparalleled beaches and the laid-back life only offered in Exuma.”