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Canada issues investment warning against Bahamas

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Senior private executives last night reacted with alarm after the Canadian government issued an investment advisory on Bahamian real estate transactions, warning that any disputes “could be prolonged and costly to resolve”.

Franon Wilson, the Bahamas Real Estate Association’s (BREA) president, told Tribune Business that the Canadian government’s action was “unfair” and “a rush to judgment”.

And Winston Rolle, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, said the development was something this nation could ill-afford given the intense competition for foreign direct investment (FDI) dollars.

Tribune Business can reveal that the Canadian government warning, which it located on the Internet, resulted from intense lobbying by disgruntled Canadian homeowners at the $40 million Oceania Heights real estate development in Exuma.

The homeowners have been embroiled in a long and increasingly bitter dispute with the developers, Canadian citizens Howard and Donna Obront, and their Bahamian attorney, Anthony Thompson.

Frustrated by what they see as slow progress in resolving the issue, particularly among government officials and the Bahamian judicial system, they have resorted to pushing their government to request action from this nation.

But the Obronts and Mr Thompson denied all claims made against them to Tribune Business in February this year, saying less than 5 per cent of the 100 lot owners were opposed to them.

Those that were, were being “riled up by one bad apple”, they alleged, and their attempts to reach a good faith solution were being rejected by the other side, devaluing Oceania Heights for all concerned.

The other side, though, is seemingly not impressed. An e-mail to this newspaper from Chris Bain, an Oceania Heights homeowner, said: “Canada’s minister of state of foreign affairs, Diane Ablonczy, wrote me a note earlier this week in which she informed me that her Department’s Web site (Department of Foreign Affairs and International Trade) now contains an investment advisory regarding the Bahamas.

“This investment advisory will cause any prospective investor in the Bahamas to have second thoughts, and that is not good for the Bahamas economy as a whole.”

The advisory, which is contained in Department’s Travel Report, contains the exact same text as detailed by Ms Ablonczy to Mr Bain.

It says: “Canadians interested in purchasing property or making other investments should seek legal advice from appropriate professionals in Canada, and in the Bahamas, before making commitments.

“Disputes arising from such activities could be prolonged and costly to resolve.”

Such wording sends a potentially chilling negative message to potential Canadian, and other foreign, investors. Apart from deterring second home deals, it might also impact larger transactions that generate more Bahamian jobs, such as hotels.

And Tribune Business understands that the government lobbying by disgruntled Oceania Estates homeowners has not stopped at the Canadian government.

Some US buyers are also pushing for the US State Department, and US Embassy in Nassau, to issue a similar investment warning about the Bahamas.

Tribune Business has seen copies of e-mails between Christopher Fleming, another Oceania Heights investor, and Jeff Farrah, chief legal counsel to Scott Brown, the US Senator for Massachusetts.

In one e-mail, Mr Farrah said: “Today I had a conference call with the State Department, and they are going to reach out to Barbara Wallace to discuss this issue.

“In addition, the representatives I spoke with are looking into the process for investor alerts in the Bahamas. I’ll let you know when I hear back.”

And, informed of the Canadian government’s actions, Mr Farrah said in a subsequent e-mail: “I will pass this to the State Department so they’re aware. This could cause them to move faster so I’m glad you sent it along.”

And Tribune Business has also been informed that the Oceania Heights homeowners have urged the Canadian government to raise their plight during the trade negotiations with the Bahamas, and CARIFORUM, over a replacement for the CaribCan trade deal.

Mr Fleming, in an e-mail to Scott Brown’s office, said: “The ‘new’ negotiator for the Bahamas, Viana Gardiner, was the former deputy director of the Bahamian Investment Authority.

“We repeatedly reached out to her asking for her help, with no results. The Canadian [homeowners] have been in contact with High Commissioner Hallihan to ask if the Canadian negotiating team can bring the matter up during the trade negotiations.”

In response, BREA’s president, Mr Wilson, questioned whether the Canadian government had spoken to the Bahamian authorities before issuing its warning.

Describing it as “unfair” if they did not, Mr Wilson told Tribune Business: “I think real estate in the Bahamas is handled in a very professional manner by professionals. We have a court system that works, and once you follow the law the right way, matters will be resolved.”

Acknowledging that there were “several concerns” arising from the Canadian investment warning, Mr Wilson added: “We in the Bahamas, at the end of the day, has some of the best attorneys in the world, the best real estate agents in the world, and handle transactions from small to big and everywhere in between.

“Once you follow the law, 9.9 times out of 10 there’s no problem.....I’m concerned on many levels, particularly the fact the Canadians did make such a bold move without getting the facts first.

“That, to me, is very concerning for a government to take that kind of position without finding out the details. That is a rush to judgment.”

Noting that investors were being advised to hire Canadian attorneys, Mr Wilson warned that this “could complicate things on many levels”, as only Bahamians were licensed to practice in this nation.

He added that the Bahamas needed to “keep an eye” on the situation.

Similarly, Mr Rolle added: “Anything placed on an international website like that will cause concern for potential investors. Anything like this we have to be mindful of, especially at a time like this when the investment dollar is so hard to come by and we try to forge new business relationships.”

Acknowledging that the situation could impact the Bahamas’ trade negotiations with Canada, Mr Rolle noted that “for the first time” this nation was faced with a “specific chapter” that focused on investments.

“The authorities need to look into this matter and bring it to a speedy conclusion,” Mr Rolle said of Oceania Heights. “They need to determine what’s going on, and bring the matter to a conclusion as quickly as possible.

“We don’t need this dragging on for a long period of time. It’s got bigger than it needed to get.”

Comments

dnedzel 11 years, 6 months ago

I am an investor in Oceania - my father purchased 4 lots, paid in full and received sales contracts but no title. We want to sell the properties, but the developer won't give us title to the property we paid for. We represent 3-4% of the entire development just by ourselves and I know several other owners with multiple lots in the same position. This issue has been going on for 3 years, I have been thru 3 Bahamian attorneys and still have no resolution. Will we ever get our money back?

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zinos85 8 years, 9 months ago

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isabella 8 years, 7 months ago

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zinos85 8 years, 7 months ago

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Marthasmith 8 years, 6 months ago

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