Understanding Jolly Harbour's Sinking Fund

1. What Was the Jolly Harbour Sinking Fund (SF)?

In 2014, Caribbean Developments (Antigua) Limited ("CDAL") announced the creation of a "Sinking Fund," intended to cover "future capital items" (infrastructure replacement, major asset repairs, etc.) in Jolly Harbour. Property owners, starting in January 2015, were billed an additional monthly fee—USD $10 (or the EC$ equivalent)—which CDAL claimed would accumulate in an escrow or dedicated account to finance large-scale improvements.

In a later document dated May 24, 2018, CDAL and certain homeowner representatives acknowledged that:

• The SF contributions were never placed in a truly separate escrow account;
• CDAL simply kept these funds within its general accounts; and
• Guidelines for proper use of SF money or robust oversight were not formally instituted until well after the fund began.

2. Why Might These Charges Be Unlawful or Refundable?

3. Key Points from the 2018 SF Guidelines

• Initial Rate:

  A monthly USD $10 per property was levied starting January 2015—possibly without formal procedures or proper legal endorsement.

• No Separate Entity Created:

  Even by 2018, there was no distinct legal entity or trust formed to hold SF monies.

• Acknowledged Commingling:

  The guidelines admitted that funds were simply held in CDAL's general accounts, contradicting earlier promises about an escrow.

• Oversight "To Be Developed":

  Plans for an approval committee, engineering studies, and new bank accounts were described. However, many property owners assert such measures were never fully or properly implemented.

4. Basis for Seeking a Refund

1. No Direct Parcel Benefit:

   If you cannot see any specific or transparent use of the SF that benefitted your parcel, it likely fails the "direct benefit" standard inherent in the Land Transfer.

2. Failure to Establish Escrow:

   The fund was not protected or ring-fenced, meaning owners had no real assurance their money went toward future capital improvements.

3. No Written Consent or Covenant Amendment:

   Typically, management cannot invent new fees without amending agreements or getting explicit owner consent—especially if it's an ongoing charge of indefinite duration.

4. Potentially Void or Unlawful Fees:

   Under the doctrines of unjust enrichment and breach of covenant, owners could argue that SF contributions should be returned with interest.

5. How Property Owners Can Pursue a Refund

1. Formal Demand to CDAL:

   Write a letter (or instruct an attorney to do so) demanding a full refund of all SF contributions, with interest. Reference the lack of escrow, absence of direct benefit, and relevant legal precedents (e.g., Waaler v Hounslow LBC).

2. Gather Your Evidence:
   • Old invoices showing SF line items;
   • Any communications from CDAL promising an escrow or special account;
   • Records of all sums you (and any previous owner of your parcel) contributed.
3. Seek Legal Advice:
   • Although small sums individually, collective action or consistent legal arguments from multiple owners can strengthen the case.
   • Engage a lawyer experienced in Antiguan property disputes if CDAL refuses to comply.
4. Track the Timeline:
   • Document each request you send to CDAL;
   • Note if and when they respond;
   • Consider legal or arbitration channels if they remain non-responsive or reject your demands.

6. Conclusion

Owners in Jolly Harbour who paid into the Sinking Fund may well be entitled to a refund—plus interest—if CDAL failed to meet the Land Transfer requirement for direct parcel benefit and never properly segregated the funds. The 2018 guidelines themselves confirm the fund was improperly managed and did not protect owners' payments as originally promised.

If you feel you have been wrongfully charged for this "Sinking Fund," you can:

• Formally demand your contributions be returned;
• Reference local (Antiguan) and British common law precedents on the reasonableness and direct benefit of fees;
• Organize with fellow property owners who have the same concerns to share knowledge and potentially reduce legal costs.

While every situation is unique, the fundamental principles of property law, combined with the evidence of non-compliance in establishing a true Sinking Fund, strongly indicate that property owners have a legitimate basis for seeking refunds and ensuring that future charges are levied transparently, lawfully, and with proper accountability.

7. Template: Formal Demand Letter

Below is a template letter that property owners can use to formally request reimbursement of Sinking Fund charges. Click the "Copy Letter" button to copy the entire text to your clipboard.

Formal Demand for Reimbursement of Unlawful Sinking Fund Charges

Dear CDAL Management,

I write to formally demand the immediate return of all payments made toward the "Sinking Fund" ("SF") announced by CDAL in or around 2014, together with accrued interest. Both I (the current parcel owner) and the previous owner(s) of my property have been unlawfully charged this additional fee, which neither conforms to the covenants of my Land Transfer agreement nor appears to have been utilized in the manner originally promised by CDAL.

1. Background and Deficiencies of the Sinking Fund
    1. Absence of an Actual Escrow:
According to the published guidelines of May 24, 2018, the SF funds were never segregated in a "dedicated Escrow account," but rather commingled with CDAL's general accounts. This negates any assurance that SF contributions were protected or specifically allocated to "future capital items" for my parcel's direct benefit.
    2. Lack of Proper Consent or Covenant Authorization:
My Land Transfer agreement stipulates that all charges must be "expended upon services provided to and for the benefit of the above-mentioned parcel." The unauthorized creation of the Sinking Fund—and its subsequent enforcement—was never ratified by any formal amendment, engineering study, or demonstration that SF levies directly benefitted my parcel in any tangible manner.
    3. No Demonstrable Direct Benefit:
Even assuming that a Sinking Fund might be legitimate in a properly documented scenario, British common law cases like Waaler v Hounslow LBC [2017] EWCA Civ 45 emphasize that service-type fees must be both reasonably incurred and directly beneficial to the paying property. Yet the SF was never truly sequestered for specific or transparent infrastructure improvements linked directly to my parcel's needs.

2. Legal Foundation for Reimbursement
    1. Breach of Covenant & Reasonableness Requirement
Under both Antiguan law (influenced by the Registered Land Act 1975) and British common law, charges must be proportionate, transparently justified, and correspond to actual property benefits. In Fluor Daniel Properties Ltd v Shortlands Investments Ltd [2001], the court similarly held that any purported service charge or reserve fund must be spent on necessary items that plainly serve the property occupant's interest. Where a fund is neither segregated nor used for specific, identifiable services, owners are entitled to challenge the charges and seek reimbursement.
    2. Unlawful Fees and Unjust Enrichment
By collecting SF contributions without fulfilling the promised escrow safeguards or providing any specific benefit to my parcel, CDAL has arguably been unjustly enriched. In practical terms, SF payments were extracted under the guise of future infrastructure savings, but no credible mechanism was used to protect or earmark those contributions for the sole, direct benefit of each paying parcel.
    3. Previous Owner's Payments
You are likewise requested to reimburse the portion of SF payments made by my parcel's former owner, who was similarly charged for this "Sinking Fund" without the formal structures and protections in place.

3. Formal Demands
    1. Full Repayment of SF Contributions Plus Interest:
I personally have contributed ………… to this SF. Kindly calculate and refund the entire amount paid under the SF by both me and my predecessor, with interest reflective of the time value of money retained by CDAL since the fund's inception.
    2. Accounting and Justification:
If CDAL believes the SF charges were lawful, please provide (a) verifiable statements of any escrow account established for the SF, (b) itemized records of exactly how each portion of SF was expended for my parcel's direct benefit, and (c) any official documentation authorizing the addition of this SF fee to the parcel's account.
    3. Deadline for Compliance:
I expect a full refund of all SF contributions, including interest, within ....... days of this letter. Failure to comply will compel me to pursue all available legal remedies, including claims for breach of covenant and unjust enrichment.

4. Conclusion

The Sinking Fund fees imposed on my parcel contravene the Land Transfer agreement's requirement that fees be expended only for direct benefit. No proper escrow was created, and no transparent accounting has shown that these fees were allocated for my parcel's interest. This is neither reasonable nor lawful under the relevant statutes and legal precedents derived from Antiguan and British common law. I therefore demand full restitution of these unlawfully levied sums, plus accrued interest.

Kindly treat this matter as urgent. I look forward to your prompt and substantive response.

Sincerely,
[Your Name]
[Your Parcel Number]
[Your Contact Information]