The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A well-known western New Providence community is facing a revolt by resident homeowners, who are promising to employ “very stringent measures” to overturn a $660,000 ‘special assessment fee’ levied on them by an absentee Board.

Tribune Business can reveal that resident homeowners at Delaporte Point are organising a petition demanding that the ‘special assessment’ be rescinded, amid wider concerns over how the gated Cable Beach community is being run.

This latest fee appears to have been ‘the final straw’ for some residents, already concerned about “transparency and accountability” in Delaporte Point’s management, and previous management fee increases.

A copy of the January 26, 2015, petition letter seen by Tribune Business, blasts the 37 per cent increase in management fees imposed on Delaporte Point owners between 2011 and 2015.

Arguing that the increase was really 47 per cent if Value-Added Tax (VAT) was included, the letter said such “a continual outlay” should not be required if the community was properly maintained.

“It would be expected that either fees would increase about 2 per cent yearly to keep up with cost of living, or there would be a 12-15 per cent increase every six years approximately,” the letter said.

“However the directors increased fees by 14 per cent within two years, and then charged VAT on this increase.

“At the annual general meeting (AGM) held in 2013, the directors discussed that an analysis of fees would be done, and the members would be receive a report, but fees were increased 10 per cent without any further communication. Fees were again increased in 2015 without any consultation or vote by owners.”

Homeowners opposing the special assessment fee are now getting increasingly anxious, as Delaporte Point’s Board have warned they will levy a 15 per cent interest penalty on 25 per cent of the sum owed if the full amount is not paid by today (March 31).

But Delaporte Point Ltd, in a written response to multiple Tribune Business questions, refuted all allegations over how the community - featuring some 100 homes and condominiums - is being managed.

Promising “complete transparency and accountability” over the special assessment fee and the projects it will finance, the Board said the decision to charge it was “legitimately authorised”.

And it blasted the “minority of owners” opposed to the special assessment fee, arguing that their resistance would prevent infrastructure investment vital to maintaining Delaporte Point and residents’ property values.

That is unlikely to satisfy the 25-30 homeowners who, according to Tribune Business’s sources, have signed up to the petition against the special assessment fee.

This newspaper’s sources confirmed that the special assessment fee has effectively ignited simmering tensions that have festered for several years, centred on Delaporte Point’s governance and finances.

It has also highlighted the “divide” between full-time, resident owners and those who are non-residents. Tribune Business was told that the latter account for between 60-66 per cent of Delaporte Point’s owners, with the existing Board’s make-up 100 per cent non-resident - many of whom have their primary residence overseas.

Several homeowners spoken to by Tribune Business declined to speak publicly, but one who did - and who is opposed to the special assessment fee - is ex-PLP MP and senator, Philip Galanis.

A Delaporte Point resident since 1981, Mr Galanis criticised the past two Boards for creating a “divisiveness” that had undermined the community’s quality of life.

And he indicated that homeowners opposed to the special assessment fee could resort to legal action unless the Board addressed their concerns.

“I have some serious concerns about the current governance of Delaporte Point in as much as the present Board of Directors is comprised of 100 per cent non-resident persons, which is unprecedented in the development’s history,” Mr Galanis told Tribune Business.

He added that when he served on the Board, any special assessments had to first be approved by the homeowners, with a full accounting for how the funds raised were spent.

Mr Galanis, though, said the existing Board had “taken the unprecedented step of assessing, providing a specific assessment of $660,000” without first obtaining the approval of Delaporte Point Ltd residents.

And, expressing concern about how the current Board were elected/appointed, Mr Galanis told Tribune Business that the Government “ought to be concerned about the potential loss of more tax revenues”.

He explained, and this was confirmed by others at Delaporte Point, that some owners - both resident and non-resident - were advertising their homes as rental properties online.

As a result, Mr Galanis questioned whether these owners of income-producing properties were paying due Business Licence fees and “charging the requisite” VAT of their tenants.

“Delaporte Point has always been a wonderful community, but the two recent Boards have created such divisiveness it’s become a not very pleasant place to live, and the resident owners are seeking to remedy that,” Mr Galanis told Tribune Business.

“We intend to take very stringent measures. We’re going to use all legal means to arrest this impasse.”

Other Delaporte Point homeowners, speaking on condition of anonymity, questioned why no extraordinary general meeting (EGM) of homeowners had been held to approve the special assessment fee.

And they questioned how the funds would be managed, citing a lack of transparency over Delaporte Point’s rental income and paint (maintenance) accounts.

Together with the special assessment, the petition letter suggests that these two revenue streams mean that the community will be sitting on a $1.3 million funding pool.

“There’s no transparency, and when owners ask for accounts and proof of stuff, they just say they’ve done it and that’s it,” one Delaporte Point source said.

“Last year, they said the management fee increases were due to VAT. That’s what they said. What we said is that since VAT did not come in, take the fee back down, but they didn’t. They’ve now put in another fee increase, so they’ve added a VAT on a VAT.”

Another contact, while effectively confirming the ‘VAT on VAT’ claim, said Delaporte Point in 2014 forecast that its ‘cost of doing business’ would increase by 3.5 per cent, and raised fees accordingly.

“The cost of operating the facility, with things breaking down, was spot on,” the source said. They added that the 2014 fee increase raised $50,000-$60,000, which they described as monies well spent and fully accounted for.

Acknowledging the “disharmony” at Delaporte Point, the source said 60 per cent of homeowners had paid their special assessment fee, which - at an average $4,000 to $6,000 per resident - was needed to finance sea wall repairs and other community improvements.

They added that those opposed to the special assessment fee had “no legal leg to stand on”, as its raising was entirely consistent with Delaporte Point’s covenants and the law.

“There are some personality issues, and they can’t seem to get past what happened in the past,” one source said of Delaporte Point.

“There’s a total disharmony between the owners, and how you get past it I don’t know. I’m not sure they’ll ever get to the bottom of this.”

Delaporte Point Ltd, which is the Board, did not respond directly to numerous Tribune Business questions, instead issuing a general response.

Pointing out that the community, first built in the 1970s, “needs constant upkeep and modernisation”, the Board said waste management, water supply and leisure facility upkeep needed to be tackled in addition to seawall erosion.

“Clearly, there are significant costs at this point in time to be incurred to achieve these goals over and above the normal operating budget,” the statement to Tribune Business said.

“The Delaporte Point Board and the majority of fellow owners understand the return of value these investments will bring to the Delaporte Point community, now and in the future, and also recognise that these investments correspond to sound management and duty of care.”

Delaporte Point then added: “There are - as often in these cases – a minority of owners who are opposed to these expenditures. Their opposition to necessary infrastructure investment, if listened to, would have negatively affected all the owners over time, and ultimately is not in the interest of the Delaporte Point community nor the interest of the broader Bahamian community. Preserving these resources serves, in fact, all citizens.

“It is unfortunate that this minority has chosen to air their discontent in the public arena. The Delaporte Point Board has responded on numerous occasions to their questions, and has made it a clear priority that there will be complete transparency and accountability of these projects.

‘In addition, these investments need to - and are - going ahead because they have been legitimately authorised in accordance with the covenants and rules that govern the community of Delaporte for the benefit of the whole community and, most importantly, have the support of the majority of owners at Delaporte Point.”