Debunking JHPOA's 2025 Budget Memo

Debunk / Clarification:

1. Audited Accounts vs. Numerical Spreadsheets

• Under the land transfer covenants, any increase in maintenance (community) charges must be based on audited accounts reflecting common expenses for "services to and for the benefit of [the] parcel."
• Many homeowners have seen budget presentations and unaudited monthly statements, but have not received the detailed, independent audits verifying that all expenses correspond to legitimate "services," as required by Coleman and other rulings.

2. Selective Reductions vs. Root Expenditures

• The memo states that the 2025 rate was "reduced to US$497" from an original US$540 by removing some expenses. However, it is unclear whether the final budget still includes questionable line items (e.g., rent for private expansions, golf course or new development overhead, developer's "interest-free loan" repayment, etc.).

Debunk / Clarification:

1. "Fixed Costs" vs. Developer Overhead

• Wages for essential maintenance tasks (trash, basic road upkeep, sewage, etc.) can be "fixed" in the sense that they legitimately service owners' parcels. But wages or overhead that pertains to expansions, new offices, or wholly private operations must not be passed on to homeowners.

2. Choice of Services

• The suggestion that every single item in the 2025 budget is either "fixed" or "required" ignores the possibility that some expense lines (e.g., large "rent" payments for newly built offices or sports facilities) do not benefit every freeholder.
• Essential services—like functioning sewage and roads—are indeed required. But if the budget lumps in newly created "sports center rent" or certain overhead from private expansions, that isn't a "service" mandated by the covenant.

Debunk / Clarification:

1. Shareholder Ownership & Asset Divestments

• CDAL is wholly owned by Sabana Holdings Ltd. If CDAL sells or transfers assets (e.g., prime real estate, commercial center pieces) to sister companies or external buyers, any revenue may not necessarily "remain for homeowner use."
• In practice, owners have no guarantee how CDAL's net earnings are spent once consolidated within Sabana's corporate structure.
• The "interest-free loan" arrangement or prior asset sales highlight how money can leave the entity or be recouped by the developer's owners—outside the immediate benefit of homeowners.

2. Depreciation & Prior Neglect

• The official financial statements reflect that CDAL has historically depreciated the roads, bridges, sea walls, etc., as its assets. This underscores that if there are "profits" or shortfalls arising from the cost of maintaining them, that is an internal, corporate matter—not an automatic pass-through to freeholders.

Debunk / Clarification:

1. Mischaracterizing Others' Debts as Shared

• If certain owners do not pay properly computed fees, it can cause a shortfall. But owners have a right under the covenants to withhold or dispute charges that exceed "services to and for the benefit of [their] parcel" or that do not comply with the mandatory audit/increase procedure.
• Coleman and related cases confirm that a developer cannot simply lump "bad debt" from contested fees into universal community charges without verifying those fees were lawfully due.

2. Responsibility for Developer's Mismanagement

• If certain "delinquent" amounts result from questionable expansions or overhead that freeholders are not obliged to pay, that is developer overhead, not a community cost.
• The fact that CDAL lumps it in the budget (and calls it "homeowner cost") may breach the covenant or lead to more disputes.

Debunk / Clarification:

1. 2-Year Interest-Free Loan or "Grant"

• The memo references an alleged US$3.8 million "grant" and a "2-year interest-free loan," while the 2023–2024 budgets highlight how monthly fees are used to repay US$800k (or more) for infrastructure.
• If the developer truly funds expansions on its own, why are monthly fees "amortizing" an interest-free loan?
• If a "grant" or "loan" is truly for developer-owned roads or sewage, it remains unclear why freeholders must be charged monthly to repay that sum—particularly if it addresses capital replacements or prior neglect in the developer's infrastructure.

2. New Sports Facilities & Rents

• The 2025 budget clearly includes "Rent for Tennis, Pickleball, Pool," "Admin offices," "Warehouse," "Security huts."
• Claims that "no homeowner funds have been used" for new developments is contradicted by line items in the official budget for "Rent Expenses" that freeholders are expected to pay—despite no direct or necessary benefit.

Debunk / Clarification:

1. Sewage Overhaul

• If the sewage plant or roads were left to decay under prior ownership, that remains the developer's legal liability if those assets remain under CDAL's ownership.
• Land-transfer covenants do not convert that developer liability into a universal homeowner debt, unless it is a normal upkeep item enumerated as benefiting the parcel.
• Overhauls or large-scale replacements to rectify extended mismanagement often remain the developer's responsibility, per "to and for the benefit" disclaimers in the covenant and standard developer obligations in many British common-law jurisdictions.

2. Risks

• Approving major "catch-up" or "replacement" costs without a covenant-based justification can shift burdens onto owners for corporate failings.
• This is exactly why owners demand an independent audit verifying whether these "repairs" or "capital expansions" benefit each parcel.

Debunk / Clarification:

1. JHPOA Is Not a Mandatory Representation

• Many owners never consented to JHPOA membership. Indeed, some disclaim membership or object to JHPOA's attempted "EC$10 monthly charge" in the 2025 budget.
• The JHPOA saying it "approves" the budget for all homeowners does not reflect a binding legal authority—nor does it override the land transfer covenant's actual conditions.

2. Takeover of CDAL—A Potential Risk

• If JHPOA or any homeowner group contemplates "taking over" a deficient or gutted CDAL, they must confirm whether the developer's historical liabilities remain with the developer or whether owners inadvertently acquire a shell saddled with neglected infrastructure.
• This raises huge legal/financial exposure for homeowners who never opted in.

3. Legal Right to Challenge Invoices

• Under local law and precedent (see Coleman, Bigler, etc.), owners can challenge fees they believe are not covenant-compliant or that reflect expansions or overhead beyond "services for the benefit of [their] parcel."
• Paying an invoice that lumps in questionable or developer-responsibility items can undermine an owner's ability to dispute them later.

Owners can request:

• An immediate, thorough disclosure of each line item's basis
• The official audited statement that justifies a higher charge
• A demonstration of how any large capital repairs remain a developer cost, unless there is explicit consent from owners or a covenant-based formula stating otherwise