Controversial real estate developer not licensed
Published:Sunday | July 24, 2022 | 12:11 AMLivern Barrett - Senior Staff Reporter
Demar Sparks, the proprietor of a start-up firm that collected millions of dollars for parcels of lands in a failed Trelawny housing development, does not have a licence to operate as a real estate dealer, developer or salesman, a state regulatory body has revealed.
This disclosure by the Real Estate Board (REB) is the latest in a string of legal issues facing Sparks and his two-year-old Clarendon-based company, Newstar Home Buyers Limited.
The Newstar CEO admitted during a July 15 interview with The Sunday Gleaner that between 20 and 25 people made down payments on lots in the Coral Spring Mountain housing development, which was widely advertised on Facebook and other social media platforms late last year.
He did not disclose the total deposits collected and acknowledged that “the transaction did not come out successful”, but insisted that there was no impropriety.
Last week, The Sunday Gleaner reported that Sparks and Newstar were under investigation for failing to meet obligations to at least 30 persons who made deposits, totalling almost $25 million, for lands in the proposed development in Coral Spring Mountain, Trelawny.
The REB confirmed, in response to questions submitted by The Sunday Gleaner, that Sparks “has not submitted a completed application in the prescribed format to be registered as a developer, dealer or salesman”.
The regulator declined further comment, citing the ongoing police investigations.
“The investigations are ongoing and based on the evidence collected, the police can make a determination,” said the REB.
But pointing to the provisions in the Real Estate (Dealers and Developers) Act, government insiders disclosed that Sparks submitted an application form to the REB, but never completed the process by supplying the required documentation and paying the prescribed fees.
Section 10 of the Real Estate (Dealers and Developers) Act makes it a criminal offence to operate as a real estate dealer or salesman without a valid licence.
The punishment for operating without a real estate dealer’s licence is a fine and/or a maximum prison sentence of five years. The penalty for not having a salesman’s licence is a $50,000 fine and/or a maximum prison term of two years.
Further, individuals undertaking a development scheme are required by law to provide a copy of the land title showing ownership, a plan approved by the relevant municipal corporation, as well as police and bankruptcy records.
“He is not a real estate dealer, meaning he cannot sell properties to other people, and he is not a developer where he has an approved plan and proof of ownership or authorisation from the owner to carry out a development,” said one insider who is not authorised to speak publicly.
The Sunday Gleaner tried to contact Sparks for a response to the REB’s assertion, but several calls to his Mineral Heights offices went unanswered last week.
Police investigators and a handful of depositors who are awaiting millions of dollars in refunds reported having the same experience.
Sparks’ attorney, Lorenzo Eccleston, had no comment on the REB’s assertion that his client was operating without the requisite licence.
And the attorney said: “There is absolutely no worry in relation to him being in Jamaica. No worries as far as I’m aware.”
‘THINGS JUST A GET WORSE AND WORSER’
Word that Sparks was operating without the requisite licence left depositors Shirley Pinnock-Barclay* and Antoinette Rivera* in shock.
“Are you serious? Oh my God! I am very much appalled!” said Rivera, who reported seeing several certificates adorning the walls inside Sparks’ office.
“This goes to show how slack the system is,” said Rivera, who, along with her husband, deposited $825,000 for two lots on which they were planning to build their dream home.
For Barclay-Pinnock, who convinced her sceptical husband to deposit $955,000 on one lot, “things just a get worse and worser”.
The situation has triggered separate investigations by the police in Trelawny and St Ann amid a flood of complaints from depositors who have been waiting months to be refunded.
Eccleston admitted that the police have contacted him about his client, but declined further comment.
According to investigators, there were several red flags which suggested that the proposed development was in trouble from the outset even as the company was still collecting deposits.
As an example, there is no clear indication that Newstar owned the lands earmarked for the project, which was offered to depositors for between $1.2 million and $3.2 million per lot with an option to make a one-time down payment of $355,000 and monthly payments of $29,000.
Sparks insisted that his company had “open and undisturbed” access to the lands, which was “acquired” from the Government.
However, he acknowledged that his company is facing a lawsuit from another entity which has claimed an “equitable interest” in the property.
Last December, local and state authorities stepped in and shut down exploratory construction work at the Coral Spring site because Newstar did not have a mandatory environmental permit, which is a breach of the Natural Resources Conservation Authority Act.
*Names changed to protect identities.