Below is a point-by-point breakdown of the key language governing the "monthly maintenance charge" for Jolly Harbour freeholders. It integrates both factual findings from prior court rulings (e.g., Coleman) and foundational legal principles under Antiguan and British law—particularly regarding what qualifies as permissible "services" and how those costs must be audited, reasonable, and free from negligence-related or mismanagement overheads.
Key Points:
- Direct Benefit Required: Charges must directly benefit each specific parcel
- Audited Expenses Only: Fee increases must be based on properly audited common expenses
- No Negligence Costs: Freeholders cannot be charged for repairs needed due to CDAL's past neglect
- Service-Based Charges: Only legitimate services, not expansions or developer overhead, can be charged
- Market Rate Standard: Charges must align with typical market rates for comparable services
Land Transfer Excerpt:
"The Transferee shall pay the monthly maintenance charge … which is now levied by the Transferor and which is levied for and expended upon the services provided to and for the benefit of the above-mentioned parcel, which services are not limited to security, grounds maintenance, infrastructural maintenance, sewage, lighting and liability and risk insurance for common areas and the administration thereof. The said charge may increase or decrease from time to time having regard to the audited common expenses."
1. "The Transferee shall pay the monthly maintenance charge…"
Meaning
- The covenant clearly imposes an obligation on the homeowner (the "Transferee") to pay a recurring fee to the developer ("Transferor" or CDAL).
- The question is not whether a monthly charge exists, but how it is calculated and limited by subsequent clauses.
Legal Context
Courts generally uphold such fees provided they adhere to the specific conditions set out in the same covenant or in other binding land transfer documents.
2. "…expended upon the services…"
Services-Focused Obligation
- The charge must fund legitimate "services," not expansions, overhead, or developer losses.
- Typical services might include day-to-day maintenance or upkeep tasks (e.g., trash removal, grounds care, simple repairs, etc.).
Why "Services" Matters
- Under both Antiguan law and British common-law standards, the term "service" implies an actual, day-to-day function that benefits each freeholder—rather than broader capital investments or developer-driven overhead.
- The courts have often disallowed (or mandated reimbursements for) fees that fail to tie back to real, ongoing services.
Electricity/Water Utility Warning
- If the community budget lumps raw power generation costs or water production overheads into a blanket "maintenance" line—while separate metering is in place—this may run afoul of the covenant.
- Key Example: In the Coleman case and others, owners successfully challenged charges that were not tied to actual services for their parcels.
3. "…to and for the benefit of the above-mentioned parcel…"
Direct Benefit Requirement
This is the most critical language. Costs must directly benefit each parcel in question. Examples:
- Security: Neighborhood patrols or gate control that owners rely on.
- Road Upkeep: Routine patching, cleaning, lighting for roads that lead directly to an owner's villa/lot.
- Refuse Collection: The actual service of collecting and disposing trash from each parcel's area.
Limiting Principle: Reasonableness
Courts often interpret "to and for the benefit" as a reasonableness test:
- If the cost in question (e.g., a new sports facility rent, overhead for developer-run expansions) has no direct utility for the average freeholder, it likely fails this requirement.
- Disproportionate or inflated charges that exceed typical market rates for comparable local services can also be challenged.
Market Rate & No Negligence Overhead
- If the cost for, say, security is far above comparable market rates in Antigua, or if overhead is inflated by poor management, owners can argue it is not a legitimate "benefit" to their parcel.
- If essential capital repairs ballooned due to the developer's past neglect, the principle typically dictates that these extraordinary costs remain CDAL's responsibility, not the homeowners'.
"Limited to" vs. "Not Limited to"
- Some covenants read "which services are limited to" these items (security, grounds, etc.), narrowing the permissible scope.
- Others say "not limited to" these items, allowing some flexibility, but still anchored by the "to and for the benefit" principle.
- In either scenario, expansions or new amenities must be shown to directly benefit the parcel before freeholders can be charged.
4. "…liability and risk insurance for common areas…"
Requirement for Real Insurance
- The covenant typically references legitimate liability/risk coverage, implying a recognized insurer or a properly funded reserve that meets recognized insurance standards.
- Merely labeling a small fund "self-insurance" does not necessarily satisfy the "risk insurance" clause—especially if no formal policy or thorough segregation of funds exists.
Courts' Perspective
Under common-law norms, self-insurance that lacks transparency or a professionally audited basis may be deemed insufficient. Homeowners can demand an accounting (supported by British case law and local rulings) to ensure the "insurance" portion of fees is properly allocated and proportionate to actual risk.
5. "…The said charge may increase or decrease from time to time having regard to the audited common expenses…"
Mandatory Audit Process
- This clause obligates the developer (or the managing entity) to base changes in the monthly fee on actual, audited common expenses.
- Coleman and subsequent rulings in Antigua established that unilateral hikes without presenting thorough, updated audits can be declared invalid.
Audits Must Check Covenant Compliance
- Some audits merely verify that the math is correct (i.e., debits match credits). But the covenant demands an audit that ensures the cost categories themselves comply with "services" and "benefit of the parcel."
- If CDAL lumps capital expansions, overhead from mismanagement, or large developer debts into "common expenses" (vs. typical maintenance), the audit should reject those items as noncompliant.
Problematic Realities
- No Updated Audits: If no recent (e.g., 2024 or 2025) audit has been circulated, owners can argue it's a breach of the "having regard to the audited common expenses" standard.
- Developer's Overhead: "Common expense" does not include business expansions or developer overhead. Courts have repeatedly affirmed that expansions, repairs for neglected assets, or overhead for new commercial undertakings are not typically "common expenses."
6. Examples of Acceptable vs. Questionable Services
| Service Type | Acceptable Charges | Questionable Charges |
|---|---|---|
| Security | Normal gate control, roving patrols, neighborhood watch recognized by owners | Hiring additional staff to monitor developer-run expansions or farmland areas owners do not use |
| Grounds Maintenance | Mowing and landscaping common green spaces, trimming communal hedges | Maintaining private lots owned by CDAL for future commercial development, or gardening staff primarily for the developer's show properties |
| Infrastructure | Patching roads, street lighting near owners' parcels, routine sewage system upkeep | Entire large-scale generator or sewer plant replacement due to years of developer mismanagement, expansions for new commercial real estate |
| Sewage | Fees paying for ongoing sewage operation and meter-based usage or normal line upkeep | Remediation of massively neglected sewage infrastructure that soared in cost because of developer inaction |
| Lighting | Streetlights on communal roads, entrance gates, or areas owners actually use | High-end decorative lighting for expansions or new areas not beneficial to owners' daily transit |
| Insurance | A recognized policy or properly audited reserve specifically covering common areas | Vague "self-insurance" line items that do not show actual coverage or remain severely underfunded |
| Administration | Salaries for staff proportionately handling monthly billing, upkeep coordination | Developer overhead or managerial costs for private expansions, developer's unrelated commercial ventures |
7. Practical Consequences of Non-Compliance
Challenging Fee Increases
If CDAL unilaterally raises charges without a thorough, updated audit—and charges owners for expansions or overhead unconnected to "parcel benefit"—freeholders can legally contest these fees. Coleman established potential reimbursements if the charge violates the covenants.
Risk of Overpayment for Mismanagement
Fee hikes that reflect "catch-up" costs from earlier neglect or inefficiency by CDAL may breach the "services" or "to and for the benefit of" clauses. Courts often find developers, not homeowners, should bear the cost of assets they solely own when the reason for the expense is developer-caused negligence.
Utility Mergers & Threats
Merging separate utilities (like electricity/water) into a single, all-or-nothing bill effectively circumvents freeholders' right to dispute the questionable portion. Courts in Antigua have enjoined disconnections when owners challenge these non-service items as invalid.
Conclusion
What the Covenant Requires
- Payment for legitimate, parcel-benefiting services within typical, market-aligned costs;
- No inflated or non-service overhead from developer mismanagement;
- Fee increases only after an audit verifying compliance with the covenant's scope of "common expenses."
What's Being Done Instead (Allegedly)
- CDAL lumps in overhead, expansions, or neglected capital repairs for its privately owned assets, often bypassing or failing to produce a meaningful audit;
- Freeholders are threatened with utility disconnections if they dispute these charges, effectively forcing them to pay questionable fees.
Bottom Line
Any "community charge" that includes items beyond normal service costs or that results from the developer's own neglect violates both Antiguan law (guided by British common law) and the covenant language. If the monthly invoice does not clearly align with "to and for the benefit of the parcel"—and lacks the audited basis mandated by the covenants—owners may have strong legal grounds to contest or seek reimbursement for the illegitimate portions.