The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Lake Cunningham homeowners association was yesterday barred from demanding maintenance fees from a subdivision’s residents after the Supreme Court ruled it has no standing to levy the charges.

Justice Diane Stewart found that Lake Cunningham Estates Common Area Management Company did not have the right to obtain payments from homeowners in the western New Providence subdivision bearing the same name because it was not incorporated as an “improvement association” under the proper Act.

Besides being formed under the Companies Act, rather than the correct Subdivisions (Local Improvement Associations) Act, Justice Stewart found “the legal and rightful homeowner association” for Lake Cunningham Estates was a different entity - Skyline Lakes Association. This company, albeit inactive, had never transferred or assigned its rights and role - including maintenance fee collection - to Lake Cunningham Estates Common Area Management Company.

Lake Cunningham Estates Management’s right to collect maintenance fees had been challenged by one of the subdivision’s residents, Paulette Newton, who had sought Supreme Court declarations that it was “not the lawful homeowners association” and, as a consequence, was not entitled to collect maintenance fees. She also demanded the return of fees to-date, and an injunction to prevent Management impeding the entry of her guests to the subdivision.

The injunction was granted more than three years ago on March 22, 2019, but Management then moved to have it and Mrs Newton’s wider action thrown out. It denied that it had impeded her guests, adding that the injunction “would render the subdivision unsafe and open to a wave of crime to be perpetrated by those of ill will and super-impose a chilling effect” on the ability of Management and its members to peacefully and safely enjoy their homes.

However, Mrs Newton asserted that it was Skyline Lakes Homeowners Association - and not Management - that was named as the homeowners company in the conveyance that enabled herself and her late husband to purchase their home in the subdivision on May 15, 1996. The couple were issued a share certificate in Skyline.

She added that there was no “conclusive evidence” that Skyline later assigned its rights to the subdivision’s roadways and verges to Management, which was alleged to only have been incorporated on November 26, 2015, by two other homeowners, Henry Lightbourne and Jayson Sweeting.

Ms Newton alleged that “immediately” after being formed, Management began issuing invoices for maintenance charges, some of which she claimed dated back to before its incorporation. She refused to pay the maintenance fees, although did pay the monthly gate charge.

Sidney Collie, the former FNM MP and Cabinet minister, and a Lake Cunningham resident, allegedly said at a December 2016 meeting that Management could not charge maintenance fees dating from before it was formed. However, Mr Lightbourne countered that Maintenance was formed to “act as the de facto association” after the subdivision’s original developer stopped paying for maintenance and the security booth.

He alleged that Mrs Newton had acknowledged Management as “the rightful body for the collection of maintenance fees” under an agreement she was said to have executed on February 11, 2009, although she did not respond to an offer of a 40 percent rebate on maintenance fee arrears.

Mr Lightbourne alleged that Management had incurred $481,257 in expenses in the four years and three months to end-March 2019, with an outside contractor, Seaview Management Services, finding there was an accrued balance of $391,673 since it was incorporated. He also claimed that Mrs Newton owes $12,675 in maintenance fees.

Justice Stewart, though, found that Mr Lightbourne in his evidence had admitted that Skyline was the designated homeowners association for the Lake Cunningham subdivision. Nor was Management named as the homeowners association in Mrs Newton’s conveyance, and there was no evidence that Skyline had assigned its rights to it. 

“On the evidence presented, I am satisfied that the legal and rightful homeowner association of Lake Cunningham Estates subdivision is the Skyline Lakes Association,” Justice Stewart found. She also ruled that Management was not a proper homeowners association because it was not formed under the Subdivisions (Local Improvement Associations) Act, and therefore could not charge maintenance fees.

“The defendant [Management] does not have a sufficient interest or standing to demand and/or collect maintenance fees owing by the plaintiff and other residents,” Justice Stewart ruled. “Any payments previously made by the plaintiff were made voluntarily by her until she ceased paying them.

“The defendant is estopped from demanding and collecting maintenance fees due and owing by the plaintiff and other residents of Lake Cunningham subdivision. The defendant is not entitled to demand and collect maintenance fees from the plaintiff as it is not the homeowners association established under the Act or the conveyance to the plaintiff.”

Justice Stewart said the injunction would remain in place until Management’s legal structure was regularised to enable it to collect maintenance fees or both sides agreed to this.