More court action coming against errant land developers
Several private developers who have failed to execute infrastructural works on lands allocated by the previous government on the East Bank corridor are on the radar of the Central Housing and Planning Authority (CH&PA), which plans to take them to court.
Since the APNU+AFC administration took office in May, 2015, the 18 developers who bought almost 600 acres of prime housing lands, stretching from Providence to Golden Grove, have been repeatedly warned to get their acts together and to honour the agreements that they had signed with the CH&PA. The recent court action to reclaim land sold to one of those developers, businessman Brian Tiwarie, is a clear sign that the Authority is serious.
“Definitely we will be taking action against other private developers,” CH&PA’s Chief Executive Officer (CEO) Lelon Saul told Sunday Stabroek in an interview, while urging the Guyana Revenue Authority (GRA) to ensure full tax collection from those who have opted to sell the lands allocated to make a sizeable profit.
According to a list seen by this newspaper, besides the 100 acres sold to Tiwarie’s BK International Inc–Sunset Lakes Inc., 50 acres were sold to Buddy’s Housing Development; 14 to Dax Contracting Service Incorporated; 25 to Nabi Construction Incorporated; 50 to Cumberland Developers Inc., 25 to Vikab Engineering Consultants Ltd; and 28.8 to Luxury Realty Inc. All of these lands are located at Providence and were bought in 2011 with the exception of Luxury Realty Inc., which purchased its lands in 2013.
According to what was seen by this newspaper, 25 acres in the Peter’s Hall area were sold to Kishan Bacchus Construction; 50 acres in 2011 and an additional 25 acres in 2014 of land in the same area were sold to Caricom General Insurance Company Inc. Navigant Builders Inc and Winsdor Gardens Inc. were also sold parcels of land in the Peter’s Hall area. In 2012 and 2014, 25 and 15 acres, respectively, were acquired by Navigant Builders Inc., while Windsor Forest Inc. acquired 40 acres.
Queensway was sold 35 acres of land at Block 22 A, Block Y Golden Grove. This newspaper was unable to ascertain in which year the purchase was made.
A total of six developers purchased land in the Little Diamond/Great Diamond area. Queensville Housing acquired 12.5 acres; A&R Jiwanram Printery Inc, 7.64 acres; RayDan Housing Enterprise, 16.9 acres; Hi Tech Construction Inc., 20 acres; and Romel Jagroop General Construction Services, 12.5 acres. All of these purchases were made during the year 2014.
Last on the list was Mohamed’s Enterprise, which purchased 14.94 acres of land in the same area in early 2015.
These lands were supposed to be developed for the construction and sale of homes.
While Saul did not identify specific developers who were errant, he made it clear that the CH&PA will be moving to repossess lands that have not been occupied or developed in any way.
Saul said that the CH&PA on numerous occasions has signaled its intention to commence litigation against some of the other 17 private developers. While acknowledging the issues plaguing the court system, he said that it is hoped that when these matters enter the judicial system, they would be speedily addressed.
He said that a considerable amount of acreage has been “tied up” by these developers as most have not “lived up to the terms and condition of sale in the agreement.” Saul said that all of the developers should have commenced building on the lands sold to them within the specified two-year period.
“They have not done that …there are about two cases where the directors of companies have changed and basically the agreement is between CH&PA and the company …in two cases, those companies were sold.” he said.
Saul did not identify the companies by name but it is believe that he was referring to Sunset Lakes and Luxury Realty Inc.
He opined that what had happened in those two cases is nothing short of “an act of dishonesty because in [those] agreements we would have expected the directors or the persons who have shares in the company to remain the same. That was not done and so what people did they sold their shares for a considerable amount of money and I trust that GRA goes after them to ensure that they pay their capital gain taxes …the appropriate tax from the profit that was derived from the sale of these properties.”
According to the available information, Tiwarie had signed an agreement via his Sunset Lakes Inc Company with the CH&PA to purchase and develop the 100 acres of land at a cost pegged at $475 million. He paid a quarter of the sum and had six months to pay off the balance.
In 2014, Tiwarie went into partnership with Chu Hongbo of Baishanlin and it was agreed that Chu would pay him US$8 million and develop the site. As part of the agreement, Tiwarie would also get to keep some of the house lots in the gated community for his personal use.
However, Tiwarie took Chu to court in 2016 for the balance of US$4 million on the agreed purchase price. It is unclear if this matter has been settled.
A local bank which gave a loan to the new owners of the land is also seeking to recoup its money.
Saul stated that it would appear that though the average time period given to develop the lands was two years, there were different arrangements in place in some instances.
“Seemingly, the terms and condition of sale was not uniform. Some developers were given more than two years, while some of them were given indefinite time,” he said.
According to the CEO, some of the developers have delivered, so it is “not all of the developers” who have failed to honour their agreement and commence building on the lands allocated within the specified time period. He told Sunday Stabroek that the ones the CH&PA will be going after, “there is more or less nothing on the land.”
Asked to explain why the CH&PA was lenient and delayed taking action against the errant developers, he said that it wanted to give them an opportunity to put themselves in order.
He added that the CH&PA recognises that some of the developers faced challenges and “it was our intention to give them time to address those issues.”