By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bimini Bay Resort is facing a homeowners revolt in the Supreme Court, with multiple purchasers voicing concerns over how their properties and multi-million dollar maintenance fee sums are being managed.

Documents obtained by Tribune Business show the action, filed by one of Bimini Bay’s 11 homeowner associations, has its roots in the alleged failure by RAV Bahamas to appoint a Board of Directors to govern its affairs.

This, the Bimini Bay Phase 1-B(4) Condominium Association is alleging, should have been done immediately upon the 32-unit complex’s Declaration of Condominium being filed with the Registrar General’s Department on June 6, 2006.

It is also claiming that the failure to appoint the Board of Directors meant the Association was unable to hold annual general meetings (AGMs), as required by its bye laws, until 2014.

This, in turn, caused the homeowners to question whether their interests were being properly protected. In particular, the Supreme Court documents show the situation sparked concerns among some over the management of their properties, and how their maintenance fee payments were being applied.

However, RAV Bahamas, the Capo Group subsidiary that is Bimini Bay’s original developer, has hit back by alleging that the homeowners owe a collective $2 million in unpaid fees.

And it has also threatened legal action of its own against an ‘Ad-Hoc Committee’ established by several homeowners, warning that by directing their colleagues to pay maintenance fees to its ‘trust account’ - rather than the RAV Bahamas-controlled management company - they were in breach of their management agreements.

Rafael Reyes, RAV Bahamas vice-president, declined to comment when contacted by Tribune Business, other than to confirm the case was before the Supreme Court.

“It’s a case in the courts. The courts will determine what to do with it,” Mr Reyes, Gerardo Capo’s son-in-law, told this newspaper. “I don’t want to get into it right now.”

An April 17, 2014, affidavit sworn by Pedro Gallinar, a Miami-based accountant who owns one of the properties in the Phase 1-B(4) Condominium Association, alleges that he was removed from the Bimini Bay Homeowners Association Board after detailing his complaints to both the Government and RAV Bahamas’ new partner.

He and another homeowner, Raul Villaverde, allegedly wrote to Deputy Prime Minister Philip Davis and minister of tourism, Oble Wilchcombe (also Bimini’s MP) on July 22, 2013, setting out their concerns over how Bimini Bay was being managed.

Their letter was also sent to K. T. Lin, the Genting Group’s chairman, and Dana Leibovitz, Resorts World Bimini’s president. Neither they, nor their companies, have been named as defendants in the litigation, and there is no suggestion that they have done anything wrong.

“Nothing happened,” Mr Gallinar alleged as a result of his letter to the Government and Genting. “Shortly after that was done, I was informed that I had been removed from the Board of Directors of the [Bimini Bay Homeowners Association].

“I was not given any reason for it, nor was I given any authority for the manner in which the decision had been taken.”

Then, in comments likely to delight the Bimini Blue Coalition and other environmental activists opposed to the Resorts World ferry terminal project, Mr Galllinar agreed that the Bimini Bay expansion was unsustainable.

And he complained that the extra guests brought in by the Bimini Superfast cruise ship from Miami would be using, for free, common areas supposedly “reserved” for homeowners and their guests.

“After being displaced [from the Board], I learnt that defendant RAV purportedly sold parts of the general common areas of the subdivision and devised a project with Genting that would land thousands of people in the subdivision on a monthly basis - a commercial venture which I think is not sustainable by the development as it is,” Mr Gallinar alleged.

“Additionally, these visitors would freely use the common elements of the subdivision which are reserved for homeowners and their guests only.”

In their originating summons, which is before Justice Stephen Isaacs, the Phase 1-B(4) Association is alleging that RAV Bahamas’ failure to appoint a Board of Directors immediately following the Condominium Declaration’s filing was “a fundamental breach of its statutory duty”.

Its affairs, plus those of the other 10 Associations and the ‘master’, the Bimini Bay Homeowners Association, have been run by Bimini Bay Management Company - an entity alleged to be 98 per cent owned by RAV Bahamas.

The Phase 1-B(4) Association, and its attorney, Keod Smith, are alleging that the failure to appoint the Board means that any decisions taken on its behalf by RAV Bahamas and its affiliates are “void”.

And they are also seeking a declaration that, by selling all 32 units, the Bimini Bay developer lost all rights to appoint persons to the Board upon completing the final sale.

Alleging that the same fate had befallen all the other Bimini Bay condominium associations, the Phase 1-B(4) Association is also seeking Supreme Court permission for their Extraordinary General Meeting (EGM) to elect a Board of Directors.

Among the other declarations and orders being sought are an accounting of maintenance fees paid by Phase 1-B(4) Association members, and the handing over of these monies by RAV Bahamas to them.

They want the Supreme Court to declare that the absence of appointed Boards meant the management agreement with Bimini Bay Management Company could not be valid, and there was no approval for RAV Bahamas and its subsidiaries to collect maintenance fees on their behalf.

The Phase 1-B(4) Association then wants the Supreme Court to declare they are not required to make payments to the RAV Bahamas-controlled entities for property or common area maintenance, and to require a meeting for them to “buy out all” of RAV Bahamas’ equity interest in the Bimini Bay Homeowners Association.

The homeowners also want the court to sanction a forensic audit of their Association, and the ‘master’ Bimini Bay Homeowners Association by the HLB Galanis accounting firm, owned by former PLP MP and Senator, Philip Galanis.

In his affidavit, Mr Gallinar alleged that the failure to appoint Boards for the Phase 1-B(4) Condominium Association, and the other 10 associations, had left all Bimini Bay homeowners at a “significant disadvantage”. He claimed further that the “condominium property was going into disrepair”.

Mr Gallinar pushed his way on to the Bimini Bay Homeowners Association Board, and successfully ensured K. W. Property Management and Consulting was appointed property manager.

But, hitting out at “four years of frustration” due to RAV Bahamas’ alleged “non-disclosure”, Mr Gallinar alleged that K. W.’s powers were limited because it was essentially a sub-contractor of Bimini Bay Management Company.

He claimed that RAV Bahamas failed to co-operate and provide the necessary documents that would have enabled K. W. to prepare a maintenance budget, and thus calculate the maintenance fees it had to charge each homeowner.

“Mr Reyes’ refusal to co-operate was compounded by his production of a one-page document that was shown to me suggested that the homeowners owed defendant RAV over $2 million,” Mr Gallinar alleged.

Seeking advice on legal remedies, Mr Gallinar said he and his fellow homeowners made no progress until the Bimini Bay Homeowners Association Board’s ‘Ad-Hoc Committee’ went to former PLP MP, Keod Smith.

“We had gotten nowhere as various attorneys and other local professionals gave us the impression that nothing could be done,” he alleged.

Mr Smith’s advice resulted in the March 8, 2014, Extraordinary General Meeting (EGM) of all Phase 1-B(4) Association unit owners, which finally elected a Board of Directors.

Mr Gallinar alleged that representatives from K. W., plus RAV Bahamas’ attorneys, Chinique Pratt-Kemp and Lakeisha Strachan from Harry B. Sands, Lobosky and Company, were present at the meeting and raised no objections to what occurred.

“All of the steps that we as homeowners have taken over the last six years, particularly since October 2013, have been pursued and taken in good faith,” he alleged, adding that the Phase 1-B(4) Association were also objecting to a RAV Bahamas’ proposal to merge the 11 condominium associations.

However, the directive for all homeowners to pay their maintenance fees to the ‘Ad-Hoc Committee’ has not gone down well with RAV Bahamas. Ferron Bethell, the Harry B. Sands partner, warned that the management agreements gave Bimini Bay Management Company all power to manage and run the 11 Associations without interference.

Referring to e-mails sent on March 30 and March 31 this year, Mr Bethell said: “In the communications, the Ad-Hoc Committee, among other things, directs the Associations’ homeowners to make their monthly assessment payments to a ‘trust account’ that is controlled by the Ad-Hoc Committee, rather than to Bimini Bay Management Committee as the Associations’ property manager as required by the condominium association agreements.

“The Ad-Hoc Committee’s request for the Associations’ homeowners to make their monthly condominium assessments payments into the trust account constitutes a breach of the express terms set forth in the Condominium Management Agreements.

“Such request also constitutes tortious interference with contract, and conversion. This is true whether the Associations have a duly elected Board of Directors or not.”

Demanding that the monies paid into the ‘trust account’ be returned to Bimini Bay Management Company, together with a full accounting of who paid what, Mr Bethell threatened legal action by RAV Bahamas itself.