Resort an ‘international embarrassment’
The financial tragedy of Humber Valley Resort continues for original owners and more recent owners due to a lack of proper governance and action by successive provincial governments.
Approval of this development in the late 1990s in an unincorporated area without any form of legislative controls has been an international embarrassment.
Newfoundland and Labrador does not have any legislation to control bare-land condominium developments and is the only province without a county system of governance to control areas outside municipalities.
This allowed the perfect storm to develop in the area still known as Humber Valley Resort.
When Humber Valley Resort Corporation (HVRC) entered into receivership in the fall of 2008, it issued letters of release to every private property owner at the resort, which at the time consisted almost exclusively of foreign owners and no year-round residents.
This released every property owner from any obligation to HVRC and its successors or assigns. When 61839 NL Ltd., with directors Katie Watton and Gary Oke, purchased the assets, they acquired no authority or ability to collect any fees or impose any contracts or lease agreements on any property owner.
They then circulated to all law firms in Newfoundland and Labrador, notice of three contracts, and by this activity, created an impression that these contracts were a condition of sale of any property at the former resort. The reality is that the resort ceased to exist and the area is a collection of private properties, all adjacent to, but not part of, a privately owned golf course.
None of these contracts and associated fees are a condition of sale and are not required to complete a sale of private property at the resort.
The only leverage this company has is the threat to terminate water services, and it is arguable that, by definition, supplying water services for compensation requires the involvement of the Public Utilities Board to set water rates.
In any event, a property owner can make alternate arrangements for water services, such as drilling an artesian well or reactivating the well that previously supplied water to approximately 70 properties.
It seems that local law firms are either not conducting proper research or are complicit in their conduct by allowing potential purchasers to enter into these contracts that have no expiry date and allows 61839 NL Ltd. to increase fees at will.
I doubt they would advise clients to enter into such agreements under any other circumstance that allows one party an arbitrary ability to gain an interest in a private property.
It is time for the current government to take action to resolve this precarious situation that is an embarrassment to the province on an international level, with foreign owners still owning approximately half of the properties, and many viewing the situation comparable to Third World conditions.
Humber Valley Resort