G. Ben Thompson, a Myrtle Beach, S.C., developer, says he owns the property in New Providence where Smith has been staying. He says he purchased the house for a bit less than $1 million in August as a favor to Smith, whom he befriended after he met her through neighbors in mid-2005.
Smith was then supposed to sign a mortgage to buy the house from him, he says, but she has refused to do so. "She said it was a gift," Thompson tells PEOPLE. "I never said that. I don't have that kind of money."
An attorney representing Thompson delivered the letter to the house on Oct. 20; if Smith does not leave, Thompson says, he will pursue a formal eviction. "I don't want to embarrass her or humiliate Anna," he says. "I just need my money, or collateral, back."
Rale did say, however, "If that's the case, it's amazing the sequence of events that poor Anna Nicole has had to endure, the one bright light being Dannielynn."
The possible eviction begs the question of whether Smith, who applied for residency based on home ownership, will have to leave the country. If she returns to her home in California, she could also face the paternity suit filed by Birkhead.
Smith's longtime legal counselor Howard Stern has said that he is Dannielynn's father; he's also listed as the father on the birth certificate. But Birkhead has said Smith told him he was the father, and has filed a request in a California court asking Smith to make Dannielynn available for a paternity test.
"We're going to get that paternity test," Birkhead's lawyer, Debra Opri, said last week. "It may not be today, it may not be tomorrow, but I'm not going away."
But Wayne Munroe, Smith's attorney in the Bahamas, told the Associated Press that his client has no intention of allowing the test.
The possible eviction is yet another strange twist in a story that began Sept. 10, when Smith's 20-year-old son Daniel was found dead in her hospital room three days after she gave birth to Dannielynn. Methadone as well as two antidepressants were found in his system. Bahamian police have investigated the death and authorities may order a formal inquest.