Q. How long has the Apes Hill Club Homeowners Association, Inc (the “HOA”) been in existence?
A. 16 years.
Q. How many members does the HOA have?
A. That’s a hard question to answer because its membership records do not appear to be well maintained. We suspect that there are about 120 to 150 members.
Q. During its 16 years of operation, how has the HOA functioned.
A. To the extent that it has functioned, it has always been controlled by a developer and has only represented the interests of the developer.
Q. Have the Villa and Lot Owners who are members of the HOA ever elected its Board of Directors?
A. They have never had an opportunity to elect the Board of Directors of the HOA.
Q. Why is that?
A. Until 2019 the HOA was controlled by its First Directors who were appointed by the incorporator of the HOA, Garth Patterson, in 2006. The First Directors and their successors who could only be appointed by the First Directors were authorized by the Bylaws of the HOA to remain in office until the last lot of the developer was sold. Under the 2006 Rules of the HOA, they had fiduciary obligations only to the developer and had no obligation to act in the best interests of the HOA and all members of the HOA.
Q. What happened in 2019?
A. The developer of Apes Hill, Apes Hill Development, SRL, defaulted in the payment of its obligations to its bankers, and the bankers sold its property at Apes Hill in 2020 to Plantation Sanctuary, Inc (“PSI”). The First Directors simultaneously resigned as First Directors of the HOA and failed to appoint their successor First Directors. PSI, then appointed, without any authority to do so under the Bylaws of the HOA, new directors of the HOA. Since the new directors were not appointed by the First Directors, the new directors are not exempted under the 2006 HOA Rules from their fiduciary duties to the HOA and all members of the HOA.
Q. Was that bad?
A. It was bad because the new directors then violated their fiduciary duties to all members of the HOA, by, among other things, failing to call a meeting of the membership of HOA where the business of the HOA could be conducted including the election of directors as required by the Bylaws of the HOA, and by enacting the 2021 Rules of the HOA which purport to eliminate the fiduciary duties of the new directors to the HOA and all members of the HOA and make all members of the HOA also members of the Apes Hill Club, a golf club still to be formed, owned and operated by PSI. It is also bad because each member of the HOA whether they wish to be a member of the Apes Hill Club or not, will be required to pay an initiation fee US$125,000 and annual dues of not less than US$20,000 and share in the losses of the Apes Hill Club.
Q. Why is it bad that a membership meeting has never been called to elect the directors of the HOA?
A. It’s bad because the HOA is run by PSI for the benefit of PSI without any authority from the membership of the HOA to do so. PSI thus determines the expenses to be paid by the HOA, to whom those expenses are paid, and the dues each member of the HOA is required to pay to the HOA. If the dues aren’t paid to the HOA, the past due amount becomes a lien on the premises of the owner of the Villa or Lot who has not paid the dues. This amount must be paid upon sale or title will not be transferred to a new owner.
Q. Why is it bad that the 2021 Rules of the HOA attempt to eliminate the fiduciary obligations of the new directors to all members of the HOA?
A. It’s bad because, as we have all seen for the past 16 years, in order for the HOA to properly function, the management of the HOA must be accountable to the HOA, the entire membership of the HOA and not just to the developer. If directors of the HOA are free to act with only fiduciary duties to the developer then they are not accountable to the HOA or its members and are free to take actions which may be in the best interests of the developer, but not the HOA and its members.
Q. Why is it bad that the 2021 Rules of the HOA attempt to make all members of the HOA, also members of the Apes Hill Club?
A. It’s bad because when you purchased your Villa or Lot at Apes Hill and became a member of the HOA, you had no obligation to be a member of the Apes Hill Club, no obligation to pay the Apes Hill Club an initiation fee of US$125,000, no obligation to pay the Apes Hill Club annual dues of no less than US$20,000, no obligation to cover the losses of the Apes Hill Club; and now you do! You have, in effect, become a very silent partner of PSI with no control over the operation and management of the Apes Hill Club and the expenses of the Apes Hill Club. You only get to share in its losses but never in its profits!
Q. How does the Apes Hill Benevolent Society know so much about the HOA?
A. Some Villa Owners and Lot Owners at Apes Hill (the “Owners Group”) banded together in early 2021 to retain lawyers on behalf of the Owners Group to investigate HOA and PSI and provide documentation concerning those activities to the Owners Group and provide legal opinions about those activities to the Owners Group. Based on that documentation and legal opinions, the Owners Group decided to form the Apes Hill Benevolent Society, Inc. to represent all the members of the HOA and not just the interests of the Owners Group.
Q. What exactly is the Apes Hill Benevolent Society?
A. It’s a non-profit corporation formed under the laws of Barbados in December 2021. Membership in the Society is voluntary. It will be managed by a Board of Directors elected by and accountable to the Membership of the Society. Its operating expenses will be minimal unless it is necessary for the Society to commence legal proceedings against the Board of Directors of the HOA and PSI for among other things, violating their fiduciary duties to the HOA, and all members of the HOA, and to set aside the 2021 Rules of the HOA requiring mandatory membership in the Apes Hill Club.
Q. How can the Society avoid commencing litigation against the HOA and its current Board of Directors?
A. Litigation can be avoided if the current Directors of the HOA and its counsel meet with the Directors of the Society and its counsel, and agree to hold an Annual Meeting of the HOA at which the Board of Directors of the HOA can be elected by its membership and if the current Board of Directors of the HOA rescinds the 2021 Rules of the HOA.