Dubious Rent Expenses in CDAL's 2025 Budget: Legal Analysis Under Antiguan Rent Restriction Act

Published: January 12, 2025

In CDAL's 2025 budget presentation, several line items labeled "Rent Expenses" stand out for both their substantial cost increases and the questionable benefit they provide to Jolly Harbour freeholders. Specifically, freeholders are being charged for:

Tennis, Pickleball, and Pool – New sports and pool facilities
Warehouse – Renovations to an older storage building
Administrative Offices – A newly constructed space for CDAL admin, maintenance, and grounds staff
Security Huts – The new security booth(s) at Jolly Harbour's recently altered entrance

According to finding of freeholders, this "rent" is paid to various entities under the Sabana corporate umbrella (including "Porto Paloma," a sister company of CDAL), and in some cases, the land or buildings are apparently owned by CDAL itself.

CDAL's lease contract description from Financial Statements — Notes to the Financial Statements December 31, 2023

1. Inflated Rent Items: A Quick Overview

Significant Rent Increases for 2025:

Tennis, Pickleball, and Pool: 66% increase (EC$240,000 → EC$400,000)
Administrative Offices: 133% increase (EC$150,000 → EC$350,000)
Warehouse: 11% increase (EC$180,000 → EC$200,000)
Security Huts: 33% increase (EC$30,000 → EC$50,000)

A. Tennis, Pickleball, and Pool (Leisure/Sport Complex)

Budget Increase: From EC$240,000 (2024) to EC$400,000 (2025) - A 66% jump
Alleged Purpose: Sabana is constructing a sports/leisure complex supposedly for the community, but survey data suggests only 13% of 147 respondents expressed excitement about a pickleball court
Covenant Issue: Major expansions not "to and for the benefit" of each parcel may exceed the scope of legitimate service charges. If many owners do not use or want these facilities, the land transfer covenants arguably do not allow them to be saddled with rent for them.

B. Administrative Offices

Budget Increase: From EC$150,000 (2024) to EC$350,000 (2025) - A 133% jump
Owner Concern: Freeholders are paying rent on CDAL's new admin building. Yet it is unclear how these offices directly benefit each homeowner's parcel. If Sabana-owned land hosts the new complex, freeholders question why they must fund what amounts to the developer's private overhead space.

C. Warehouse

Budget Increase: From EC$180,000 (2024) to EC$200,000 (2025) - An 11% jump, purportedly for renovations
History: A 24,000-square-foot structure once used by CDAL for storing construction materials and furnishings when Jolly Harbour was first developed. At present, the "maintenance materials" stored there presumably do not require such a large space.
Umbrella Company Usage: With Sabana-affiliated entities actively performing new construction projects in Jolly Harbour, freeholders suspect the warehouse is partly used by those projects—yet the rent appears fully billed to owners.

D. Security Huts

Budget Increase: From EC$30,000 (2024) to EC$50,000 (2025) - A 33% jump
Rationale: CDAL moved the Jolly Harbour entrance to accommodate new developments, thus adding or relocating security huts. Again, if these expansions mainly serve the developer's commercial interests, freeholders question why they must pay the bill.

2. Antiguan Rent Restriction Act: 15% Increase Limit

Under the Rent Restriction Act (Cap. 402, revised laws of Antigua and Barbuda), rent on a property may not be arbitrarily increased beyond 15% in a given period unless the landlord obtains special permissions or meets specific exceptions. While the exact application can vary based on property classification and lease arrangements, the principle is straightforward:

Key Legal Issues:

Significant Rent Hikes (66%, 133%, 33%) appear to exceed the statutory threshold
Jolly Harbour is not legally an association or condominium
Freeholders do not have a single lease agreement with Sabana or Porto Paloma that would justify these soared rates

Key Question: On what legal basis is the developer (CDAL or its affiliates) charging these amounts for a private building's rent, well above the 15% threshold, and then passing them on as a forced "maintenance/community" cost?

3. Covenant-Based Objections

"To and For the Benefit of [My] Parcel"

The standard land transfer covenant says the monthly maintenance charge must be "expended upon the services provided to and for the benefit of the above-mentioned parcel." Large new offices or developer expansions rarely meet that requirement—particularly if owners do not utilize the new sports center or admin building.

Audited Common Expenses

Any major cost increase requires an audited basis for "common expenses"
Payment for expansions or private overhead space is not typically recognized as a "common expense"
Covenants forbid passing neglected capital obligations (i.e., from developer mismanagement) onto freeholders without meeting strict conditions

4. Where the Money Actually Goes

Per concerned freeholder findings, "rent on all these buildings is being paid to Porto Paloma—a sister company of CDAL—but the warehouse and security huts are owned by CDAL, so why would they pay rent?" The same lines confirm:

Key Concerns:

Some items (warehouse, certain security huts) are apparently still under direct CDAL ownership, yet a "rent expense" is budgeted—contrary to normal logic, as a property cannot meaningfully "rent" from itself
Other expansions, such as the admin offices, stand on "Sabana-owned" land. If so, Sabana is effectively renting to freeholders—an arrangement none of us individually signed
The rent contract is also terminable by either party. If so, owners ask: Why not terminate and remove it from the budget?

5. Proposed Letter to CDAL: Challenging These Rent Expenses

Below is a template letter freeholders may send to CDAL (Attn: Management, specifically referencing the 2025 Budget) citing the Antiguan Rent Restriction Act and the covenant obligations:

[Your Name] [Your Parcel Identification] Date Caribbean Developments (Antigua) Ltd. Attn: [Appropriate Manager / CFO] Jolly Harbour, Antigua Re: Rent Expenses Charged to Freeholders in the 2025 Budget Dear [Name / CDAL Management], I am writing in reference to the following "rent" items in the 2025 budget: 1. Tennis, Pickleball, and Pool: Increased from EC$240K to EC$400K 2. Administrative Offices: Increased from EC$150K to EC$350K 3. Warehouse: Increased from EC$180K to EC$200K 4. Security Huts: Increased from EC$30K to EC$50K (A) Rent Restriction Act Under the laws of Antigua & Barbuda, including the Rent Restriction Act (Cap. 402), yearly rent hikes are typically capped at 15%. The budgeted increases—some exceeding 66% or even 133%—are substantially beyond that limit. Please clarify on what legal basis you have included such an abrupt escalation, especially when freeholders never consented to any master lease or new commercial arrangement. (B) Land Transfer Covenant Obligations The covenants binding our parcels permit only those charges "to and for the benefit of [my] parcel" and subject to audited common expenses. It is unclear how new offices, a private sports complex, or warehouse renovations primarily benefitting Sabana's developments constitute legitimate service costs for existing freeholders. Specifically: 1. Tennis/Pickleball & Pool: Survey results indicated most owners are not interested in pickleball. Why, then, is rent for an underused or unwanted facility allocated to us? 2. Admin Offices: If these offices serve CDAL's corporate or commercial projects, they cannot be fairly billed to freeholders as a monthly rent. 3. Warehouse: Historically built for Jolly Harbour's original development. If large segments are used by Sabana or other umbrella entities, it should not be an owners' expense. 4. Security Huts: If the impetus for relocating the main gate was your new construction, owners question the fairness of being assessed for that shift. (C) Termination of Porto Paloma Agreements Please clarify whether "rent" is paid to Porto Paloma, a sister company. You also note the agreement can be terminated by either party. Please explain why you have not canceled or renegotiated these questionable rent charges, particularly where the property is still CDAL-owned or presumably beneficial to developer expansions more than to each freeholder. (D) Request for Clarification & Removal I hereby request: 1. Immediate Disclosure of any lease or rental agreements tied to these facilities, including length, rate calculation, and justification for the rent hike. 2. Removal from the 2025 Budget (and all subsequent bills) of any rent line item not explicitly validated by the covenants or by a lawful, transparent basis. 3. Confirmation that any future changes in rent expense comply with the Rent Restriction Act's ceiling of 15%—or an explanation of any recognized exemption under local law. Until I receive official evidence that these "rental" costs serve the legitimate "benefit of my parcel" and respect both the Rent Restriction Act and the covenant-based requirement for audited expenses, I reserve all rights to dispute these charges. I appreciate your prompt reply and remain open to any good-faith discussion on ensuring monthly fees align strictly with the covenant obligations and Antiguan law. Sincerely, [Your Signature / Name] [Parcel Number / Address] [Contact Information]

Final Thoughts

Sabana's or Porto Paloma's internal arrangements should not impose inflated or arguably unjustified rent charges on freeholders—particularly when:

We never agreed to such expansions
The Rent Restriction Act sets a strict 15% limit on rent hikes
Our land transfer covenants only allow charges that directly benefit each parcel

Disclaimer: This article represents the collective viewpoint of concerned Jolly Harbour freeholders, referencing publicly available legal frameworks (the Antiguan Rent Restriction Act, relevant covenant text) and the 2025 CDAL budget documents. For legally binding advice, owners should consult their own counsel.