1. Introduction
In Jolly Harbour, Caribbean Developments (Antigua) Limited (CDAL) purports to shift massive infrastructure costs to freeholders through monthly "maintenance charges," allegedly for the benefit of the "community." Meanwhile, the July 2022 Reserve Advisors Study demands multi-million-dollar "catch-up" repairs to sewage lines, seawalls, roads, and more—costs that CDAL seeks to offload onto freeholders. However, the Non-Binding Letter of Intent (LOI) dated June 23, 2020, along with CDAL's 2009 Financial Statements, reveals:
- CDAL treats Jolly Harbour infrastructure (roads, seawall, etc.) as its own "investment property" or "property, plant and equipment" for which it has historically taken depreciation expenses or recognized direct revenue (e.g., "Seawall revenue," "Land Sales").
- The LOI contemplates a sale of CDAL and affiliated entities to new owners, clarifying that CDAL (not freeholders) legally owns the infrastructure—and intends to sell it as an "asset," disclaiming "any further guarantees" as to its condition.
- British and Antiguan law (e.g., Waaler v Hounslow LBC [2017], Fluor Daniel Properties Ltd v Shortlands Investments Ltd [2001], and the Jolly Harbour Land Transfer covenant) limit how developers can charge freeholders. Only "reasonably incurred" costs for each parcel's direct benefit are recoverable, not massive "catch-up" from the developer's own negligence or mismanagement.
This article unpacks how these documents undermine CDAL's posture that freeholders must pay for the backlog of infrastructure decay. In reality, the developer is responsible for restoring or adequately funding items it owns, especially where these items have been explicitly carried on the developer's own financial statements and transacted as the developer's "assets."
2. Non-Binding LOI: How the "Assets" Are Being Sold to New Owners
The June 23, 2020 Letter of Intent regarding the prospective sale of CDAL (and affiliated entities) to "the Purchaser" includes:
- Acquisition of Shares in CDAL and its subsidiaries, recognized as a property-holding and revenue-generating corporation.
- $29,350,000 Purchase Price: Notably, the LOI references real estate as "properties," with roads, bridges, yards, and even seafront recognized as "assets," making clear that these are not "community" or "freeholder" assets but CDAL's corporate holdings.
- "As Is" Transfer: Section 11 explicitly states that any infrastructure (e.g., "maintenance and infrastructure deficiencies") is "old" and "built... in accordance with standards of those days" but will be transferred as is and "without any further guarantees."
- Investment Property Treatment: The LOI mirrors the notion from the 2009 Financials that CDAL sees roads, golf course, etc., as the developer's investment property or "property, plant, and equipment." It does not mention "community assets" belonging to freeholders.
Key Point:
If the developer's own documents treat roads, seawalls, and so forth as corporate property that can be sold and depreciated, then the developer—not the freeholders—bears responsibility for major "catch-up" repairs. Attempting to bill owners for the developer's backlog effectively double-charges them: first, by selling the land and seafront for profit, then sending them a bill to restore those same "assets."
3. 2009 Financial Statements: "Land Sales" and "Seawall Revenue"
In CDAL's 2009 Financial Statements, we see:
- Revenue lines: "Land Sales," "Seawall revenue."
- "Property, Plant and Equipment" or "Investment property" with depreciation schedules for roads,
bridges, yard, and seawall:
- "Roads, bridges, yard and seawall - 50 years" depreciation
- "Utilities - 20 years," etc.
- Accounting Policy: "All other repairs and maintenance are charged to the statement of income during the financial period in which they are incurred." If CDAL capitalizes or depreciates these assets, the cost to maintain them is the developer's overhead—unless there is a covenant or contract specifying owners must pay.
- No mention of "community ownership": The financials reflect that CDAL claims ownership and reaps direct revenue from these items (e.g., "Seawall revenue"), so these are not "common elements" or "freeholder assets."
Key Implication:
By classifying the roads, bridges, and seawall as "CDAL assets," the developer is required (under typical property law and standard corporate accounting practice) to maintain them at its own expense. Demanding that freeholders pay again for repair or replacement of these "company assets" contravenes:
- The Land Transfer covenant that owners only pay for items "to and for the benefit of [their] parcel." A neglected corporate asset is not a "benefit" if the developer consistently recognized income or depreciation from it.
- British precedents. In Fluor Daniel, a landlord/developer cannot transfer the cost of "under-maintained" property to tenants/owners, especially if that cost arises from the developer's own negligence.
4. Legal Analysis: Why Freeholders Should Not Foot the Bill
A. Waaler v Hounslow LBC [2017]
- This case clarifies that charges to property owners must be "reasonably incurred" and proportionate.
- If CDAL actively neglected these corporate-owned structures (seawall, roads, etc.), it cannot just pass multi-million-dollar "catch-up" onto owners, as that cost arises from CDAL's own default, not freeholder benefit.
B. Fluor Daniel Properties Ltd v Shortlands Investments Ltd [2001]
- Developer/management cannot unilaterally shift infrastructure decay that accrued from their inaction onto owners' "maintenance" fees without justification.
- The neglected state is a result of CDAL's own management choices.
C. Antiguan Contract & Property Law
- The "Land Transfer" covenant specifically states monthly fees must be "expended upon services... to and for the benefit of the above-mentioned parcel."
- If the roads, seawall, or golf course were being depreciated or sold by CDAL as corporate assets, owners have no direct ownership or "benefit," so claiming "maintenance charges" for them is questionable.
- Moreover, any cost from developer mismanagement is not "reasonably incurred" for each freeholder's direct benefit under basic contract law principles.
D. As Is / "No Guarantee"
The LOI explicitly states the new owners purchase the assets "as is," disclaiming "any further guarantees." If the original or continuing developer invests in them as "investment property," it stands to reason they alone must remedy neglected conditions at their own cost.
5. Implications for Freeholders
A. CDAL's Real Obligation
If the developer (CDAL) recognized roads, utilities, and seafront as corporate property, it alone is liable for bringing them to a functional state. This cost cannot simply be tacked onto freeholder charges.
B. "To and For the Benefit" of Parcels
Under the Land Transfer covenant, freeholders can challenge any portion of the monthly "maintenance" that covers old, decaying infrastructure the developer neglected, especially if that infrastructure was separately monetized or depreciated in corporate books.
C. Unlawful "Double-Charge"
By selling or leasing certain land, collecting "seawall revenue," or booking these items as "investment property," CDAL benefited financially. Now forcing owners to pay again for restoration is akin to unjust enrichment.
D. Due Diligence
The LOI's mention of major repairs (like a generator overhaul at $500–$600k, golf course land caution removal, etc.) signals that new or old owners recognized the backlog. If freeholders see a sudden "maintenance charge" spike to cover it, they can argue these are developer's overhead costs under Fluor Daniel principles.
6. Conclusion: The Non-Binding LOI & 2009 Financials Undercut CDAL's Maintenance Charge Claims
A. CDAL Owns the Infrastructure
The LOI clearly lumps Jolly Harbour's assets (roads, utilities, golf land, seafront) into a corporate sale. Meanwhile, the 2009 statements show CDAL classifying these items as property it sells, depreciates, or profits from.
B. Developer, Not Owners, Bears Negligence Costs
Waaler and Fluor Daniel confirm you cannot offload the backlog from your own mismanagement onto freeholders—particularly for assets recognized as "corporate."
C. Land Transfer Covenant
The monthly charge must be "to and for the benefit" of each parcel. By definition, CDAL's old, decaying "investment property" does not meet that threshold unless explicitly proven to benefit each freeholder's parcel (e.g., direct sewage lines to one's home). Even then, the developer's internal backlog remains its burden.
D. As-Is Sale
The LOI states that new owners are buying "as is," disclaiming "further guarantees," thus revealing that owners themselves never owned these items. If they are not freeholder assets, owners can dispute claims that they must bankroll the repairs.
Bottom Line:
The Non-Binding Letter of Intent and the 2009 Financials reveal that CDAL holds Jolly Harbour roads, seafront, utilities, etc. as its own assets, with capital recognition and depreciation. Under Antiguan and British legal precedents, the developer must not impose costs for its self-acknowledged backlog or "investment property" on freeholders. Freeholders have legal grounds to demand any "catch-up" or "restoration" cost remain CDAL's responsibility—not the owners', who should only pay fees "reasonably incurred" for each parcel's direct benefit.
7. Message Template to CDAL Management
Below is a template letter that incorporates the key findings from the LOI and financial statements when challenging CDAL's maintenance charges:
Subject: Formal Objection to Maintenance Charge Calculations
Dear [Name/Title at CDAL Management],
I write as a Jolly Harbour freeholder who objects to the manner in which CDAL calculates and imposes monthly maintenance charges, and to the recurring threats of utilities disconnection used against freeholders who contest those charges. Recent evidence—including your June 23, 2020, Non-Binding Letter of Intent ("LOI") for the potential sale of CDAL, along with the 2009 CDAL Financial Statements—confirms that Jolly Harbour's roads, seawalls, and core infrastructure are CDAL's corporate assets, not "community" assets. Under both Antiguan and British law, a developer cannot lawfully shift "catch-up" costs for its own neglected property onto freeholders.
1. Corporate Nature of Jolly Harbour Infrastructure
1. 2009 Financial Statements
• CDAL's statements show line items such as "Seawall revenue" and "Land Sales," plus depreciation schedules (e.g., "Roads, bridges, yard, seawall - 50 years"). This proves CDAL owns these assets, recognizes revenue from them, and treats them as "investment property" for its own benefit.
2. 2020 Non-Binding LOI
• The LOI outlines a potential US$29.35 million sale of CDAL, explicitly listing those same roads, seafront, utilities, and other infrastructure as part of the developer's corporate holdings. The LOI states these assets transfer on an "as is" basis—acknowledging backlog deficiencies are a developer concern.
Key Point: Because CDAL has historically owned, depreciated, and profited from these items, it stands legally responsible for their upkeep. Freeholders should not be forced to fund a backlog the developer itself created or ignored.
2. Land Transfer Covenant: Only Pay for "To and For the Benefit" of My Parcel
Under Antiguan and British law (Waaler v Hounslow LBC [2017], Fluor Daniel Properties Ltd v Shortlands Investments Ltd [2001]), freeholders pay only for reasonably incurred costs that directly benefit their parcels. The Jolly Harbour covenant echoes this principle: monthly charges must be "to and for the benefit" of each freeholder's property.
• Developer's Own Negligence: If roads, seawalls, or sewage lines degrade due to corporate under-maintenance, it is CDAL's liability. Owners cannot be compelled to cover these "catch-up" expenses, especially when the developer profited from them.
3. Threat of Utilities Disconnection Is Coercive and Unlawful
Many freeholders report that CDAL threatens to disconnect water or electricity whenever they dispute fees. Under basic British precedents (Lavender v Betts [1942], for example) and Antiguan property norms, developers/landlords cannot use utility shutoff as a tool of coercion without due legal process—particularly if the charges themselves are contested for failing to meet "direct benefit" standards.
• Unfair Practice: Attempting to compel payment of developer overhead by threatening to cut essential services contravenes the spirit and letter of the Jolly Harbour covenant, as well as the "reasonableness" requirement in Waaler.
4. Request for Action
1. Detailed Itemization of Maintenance Charges
• Freeholders want a breakdown showing precisely which line items are "developer overhead" (backlog repairs to corporate assets) versus genuine services to each parcel (e.g., direct sewage outflows, water usage from the meter onward).
2. Removal of Corporate-Asset "Catch-Up"
• Any backlog related to neglected roads, seawalls, or golf/utility expansions historically owned and depreciated by CDAL must be excluded from monthly charges. It is CDAL's cost of business, not the freeholders' burden.
3. Cessation of Disconnection Threats
• CDAL must halt the practice of threatening utility shutoff whenever an owner exercises the right to contest unlawfully inflated charges. Continuing such coercive tactics risks legal liability under Waaler, Fluor Daniel, and basic contract law.
4. Formal Written Response
• Freeholders request a prompt written statement clarifying how you plan to remove developer-overhead expenses from monthly invoices and ensuring no further intimidation via utility disconnection.
5. Legal Framework and Conclusion
• Waaler v Hounslow LBC [2017] EWCA Civ 45: Developers cannot impose charges unrelated to the property's direct benefit or that reflect the developer's own negligence.
• Fluor Daniel Properties Ltd v Shortlands Investments Ltd [2001]: Forcing owners to pay for backlog repairs to a developer's corporate assets is a violation of "reasonably incurred" charges.
• Antiguan Contract and Property Statutes: The Jolly Harbour covenant states freeholders pay only "to and for the benefit of the above-mentioned parcel." Anything else is outside lawful scope.
Given CDAL has historically labeled these roads, seafront, and golf course as "investment property," it alone must finance their backlog. Thus, a freeholder's monthly assessment cannot lawfully include overhead from historically mismanaged corporate assets. Additionally, disconnection threats undermine any good-faith negotiation on the matter.
Owners respectfully request that CDAL align with both legal precedents and the Land Transfer covenant by recalculating charges, removing "catch-up" items, and refraining from pressuring freeholders with service shutoffs. Thank you for your prompt attention to these issues; we await your written reply detailing how you will comply with British and Antiguan law.
Sincerely,
[Freeholder's Name]
Parcel ID: []
Date: []
Contact Information: [________]