Where is the money? No sign of $millions paid for Palmyra properties

Published: Sunday | July 22, 2012 Comments 0
A section of Palmyra Resort and Spa under construction.-File
A section of Palmyra Resort and Spa under construction.-File

Mark Titus, Gleaner Writer

WESTERN BUREAU:More concerns are emerging about the millions of dollars collected by the developers of the stalled Palmyra Resort and Spa scheme in Montego Bay, St James, even as court action begins in an attempt to protect the depositors.

The Sunday Gleaner has learnt that the receiver appointed by creditors has found no evidence of the legally required trust fund which should have been established to deposit the more than US$2.4 million collected by the developers from purchasers.

"We have not been able to locate a trust account in which deposits received under prepayment contracts were lodged. The accounts which have been located thus far were accounts which financed the operation of the Palmyra," reads a portion of a letter from Samuda and Johnson, the law firm representing the receiver, Ken Tomlinson.

"Due to the inadequate record keeping by the operators of the Palmyra, prior to the appointment of our client, it has become extremely difficult to compile a list of all the purchasers, much less a record of deposit made," another portion of the letter reads.

The correspondence is part of an affidavit filed in the Supreme Court by the Real Estate Board and Strata Commission against the Robert Trotta-led Palmyra Resorts and Spa Limited and Palmyra Properties Limited.

master list

The affidavit obtained by The Sunday Gleaner shows 137 individuals on a master list of buyers.

There are also copies of letters - written from November 2006 up to February of this year - demanding compliance to section 29, 30 and 31 of the Real Estate (Dealer and Developers) Act, and regulation 17 of the Real Estate Regulations.

Efforts to contact Trotta - who was Palmyra's lead investor and developer - were unsuccessful, and Tomlinson did not return calls.

"It (the court action) is seeking to protect purchaser's deposits under prepayment contracts either by way of a refund, or if the scheme is going ahead, to ensure that contracts are completed," Sandra Watson, the real-estate board's chief executive officer told The Sunday Gleaner.

"We had a problem getting information from the developer, that is why we are in court now, " added Watson.

The Palmyra development sits on 16 acres of pristine beachfront land along the Rose Hall corridor.

Ground was broken for the project in 2005 for what was billed as Jamaica's first luxury waterfront condominium resort for high-scale residential living and resort accommodation.

The gated facility is a 288-room hotel/condominium complex encompassing three towers, two of which were completed.

It has 103 owners of individual condos, with 97 units remaining for sale on the Sabal Tower and Silver Tower blocks.

The Sentry Tower of 88 studio suites and 11 three-bedroom villas is yet to be completed.

The developers of the project fell into arrears on US$110 million of principal loans - US$22 million of which was financed by RBC Royal Bank Jamaica, while the other US$88 million is held by National Commercial Bank.

In addition to the money owed to the banks, there are a multitude of creditors awaiting payment for services.

For Watson, the priority is recovering the purchasers' investment.

"Usually when we have these cases, our first step is the purchasers deposit protection, and then afterwards we look at the breach," said Watson.

"While some of the purchasers have failed to provide us with the information we needed. We are doing something, (but) without their affidavits, without their receipts and copies of their prepayment contracts, we can't go to court to protect them."

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