SBMA Breaches Lease With Subic Investors

Letter from a reader on SBMA's new "Office of Leasehold Rights".

In a public information briefing on August 25th SBMA executives presented that their own people have mismanaged the administration of the leases within the Freeport forcing them to set up a "Registry of Ownership of Leasehold Rights", sounded reasonable until they got to the point where it became clear that they intended to make the registration of leases expensive and administratively taxing on the leaseholder.

Most leaseholders have a legally binding signed contract with SBMA and hold a copy of that contract for our protection, for most of us that's enough so why should we be labored with heavy fees and documentary duties so that SBMA can clean up its contract administration?

The further you dig the more this whole scheme comes out as a sham to extort leaseholders into paying fees that they are not legally obliged to pay.

SBMA feebly tried to present this as in the interest of the leaseholders by enhancing and protecting the leasehold value but this is not a plausible excuse given the simple economics.

SBMA funded the set up of the registry office with 700,000 pesos however, according to the data found on the SBMA website, companies like Hitachi could have an exposure of 2 Million Pesos just to "register" one warehouse, making this "service to leaseholders" a multi-billion peso cash cow for SBMA. As far as housing area leases are concerned, if residential leaseholders paid a 500 peso service fee SBMA's costs to setup and run the new contract office would be fully covered, so how does SBMA expect residents to pay fees based on the improvements that where made by the leasor together with unspecified calculations, in many cases making the fee 15-20k or more.

Investors who attended the meeting may have been expecting that SBMA was going to issue titles for property within the Freeport because they were stunned when SBMA officials presented a poorly put together PowerPoint presentation that told investors that unless they paid levy's on their improved properties by 03 July 2010 they would be penalized. Something which is NOT allowed for under the terms of their leases.

SBMA already has a reputation for being in litigation with many of its lessors but generating a breach of contract so broad ranging that it encompasses all investors and residents at once is unprecedented.

[The Subic Bulletin] As this is an important topic comments on this subject will be prioritized over other subjects. We here at The Subic Bulletin are concerned that SBMA can attempt to add charges in on existing lease contracts without agreement.