My work requires me to keep abreast of what is happening in the Caribbean on a daily basis, and more specifically, the real estate industry in the region. Although not surprised, I was extremely saddened to learn that the reputation of the Caribbean as a safe destination in which to invest in property may have been severely damaged due to the acts and/or omissions of a number of parties.
Some years ago, I was approached by representatives of Harlequin Property to market resort units that the company would be constructing in Barbados and St. Vincent. We would receive healthy commission fees whenever we introduced buyers who purchased one or more of the luxury units. On one occasion, we were contacted in the same day by four different representatives from Harlequin. We declined to list the resort units for ethical reasons, but from time to time, would be contacted by individuals representing Harlequin who would tell us wonderful things about Harlequin and their various developments in the Caribbean.
What was most concerning was that none of the Harlequin representatives who contacted us could provide answers to enquiries about important matters such as title to the land on which these luxury developments were to be constructed, whether or not planning approvals had been granted and what procedures were in place for dealing with Alien Landholding Licences in the islands that required these. One representative confirmed that Harlequin were the legal registered owners of the land on which Merricks was to be constructed in Barbados. However, when asked if the individual had seen documentary evidence to support this, they admitted that they had not. The same response was given regarding planning approval documents.
The brochures produced by Harlequin Property to promote their luxury resorts were absolutely stunning. Sporting celebrities were used to promote their developments. Representatives of the company were aggressive in attracting investors to buy and agents to sell units in the exotic tropical destinations where the resort developments were to be constructed. But alas, all that glitters is not gold.
It would appear that a number of British investors now stand to lose millions of pounds because the resort developments in which they invested have not been completed. Worse still, it is unlikely that Merricks Resort in Barbados, The Marquis Estate in St. Lucia and Buccament Bay Resort in St. Vincent will ever be completed. (It should be noted here that Harlequin developments in Thailand and the Dominican Republic have also suffered a similar fate, but I have focussed on the Caribbean as this is the area in which I specialise).
So who is to blame for the Harlequin fiasco that may lead to heartache for many British people and other overseas investors who parted with funds to buy one or more luxury resort units in Barbados, St. Lucia or St. Vincent.
Let us first of all look at the Governments in the islands where these resorts were to be constructed. Were any checks carried out on the British property development company whose Chairman was a former bankrupt? Did any of the islands consult with each other about the developments being constructed on their respective islands that were going to generate millions of dollars from overseas investors?
Some British investors used their Self Invested Personal Pensions (SIPP) to raise funds to invest in Harlequin resort units, while others remortgaged their homes to raise the requisite funds. What checks, if any at all, did the Financial Services Authority (FSA) carry out to establish where and how SIPP funds were being invested?
We all know that agents across the world generate income from the sale of properties. There is nothing wrong with that. However, selling properties with commission fees as the primary motivating factor can have serious consequences for buyers. What sort of training did Harlequin provide to its agents? Were any of the agents selling Harlequin properties in possession of any written documents about the legal status of the developer vendors, save for beautiful glossy brochures?
Some comments on the internet place blame on greedy investors for the situation in which they now find themselves. Can a desire to invest in property be deemed to be an act of greed? What checks did investors and/or their legal representatives carry out on Harlequin Property and their many developments in tropical destinations.
In addition to constructing luxury resort developments in five destinations, all at the same time, Harlequin Air would provide flights between St. Lucia, Barbados and St. Vincent. It is now evident that Harlequin had its fingers in too many pies; a recipe for the disaster that we are now hearing about. And where will it all end? Unless investors are able to recover funds for units that are unlikely to be built in the near future, then there can only be one ending to this saga – embarrassment and financial loss.
The lesson here is that Caribbean Governments, agents selling resort developments, the Financial Services Authority and property investors alike must be as aggressive as Harlequin agents when it comes to carrying out due diligence. I had heard rumours about Harlequin years ago, and as they say, there is usually no smoke without fire.
One can now only hope and pray that the Harlequin fiasco will not have a long-term impact on investment in property in the Caribbean.
Send us an email at email@example.com if you invested in one of Harlequin’s resort developments and you have not received promised payments and/or taken delivery of the unit(s) that you purchased.