Unregistered Developer Convicted for prepayment contracts

Another real estate developer was brought to book when Harry Douglas was convicted on May 14 in the St. Ann Parish Court. Mr. Douglas was found guilty of accepting monies for land ahead of completion (known as prepayment contracts), for an unregistered development scheme, in violation of the Real Estate (Dealers and Developers) Act).  He was also found guilty of failure to register with the Board as a real estate developer.

“While we see this as positive outcome, we acknowledge the impact such acts invariably have on purchasers.  This can lead to, among other things, an inability to receive a title or receiving something other than what was agreed.  This case, once again, should underscore the need for vigilance in Real Estate transactions.  We also hope that it will discourage other developers from doing the same,” explained Real Estate Board’s, Chief Executive Officer, Sandra Garrick. 

The Court heard evidence that in July 2012 the Board received a letter from an attorney one behalf of its client, querying if lands in Wakefield, St. Ann registered to Mr. Douglas, was registered with the Board as a development scheme.  Checks by the Board indicated that the development was not in fact registered as such, neither was Mr. Douglas a registered real estate developer. 

An inspector with the Board subsequently visited Mr. Douglas in September that same year, and advised him in person and in writing, of the legal requirement to register as a Real Estate Developer.  He was further informed that he was in breach of the Real Estate Dealers and Developers Act, by commencing the development scheme without the Board’s approval, advertising lots for sale and accepting prepayment for the lots in a development called Sea Cool Heights.  He was given a deadline within which to take the necessary corrective action to regularise his practice and development, but failed to do so.

The Court also heard evidence from a retired returning resident who said he made payment of US$25,600, prior to handover of the land.  Upon taking possession, he was made aware that the parcel of lot which he was initially shown and agreed to purchase, was different, and not equal in size to the lot that he finally received.  The returning resident has since constructed his house, but is unable to get a title for the land.    

Under Section Sections 26 of the Real Estate (Dealers and Developers) Act, a Real Estate Developer is prohibited from entering into prepayment contracts, where he or she is not a registered developer.  Additionally, where the developer is registered, there are mechanisms for the reporting, monitoring and control of such sums to ensure probity.

This conviction follows on the heels of a similar conviction of another Real Estate Developer in January of this year.

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