Opinion: Real estate headachesPOSTED: 01/20/12 1:13 PM
That not everything is chipper in real estate land is by now clear to everybody. Timeshare resort court cases provide a steady source of income to the legal profession, as the court schedule for next week Tuesday shows. There are no less that 35 court cases listed. Top of the list is Diamond Resorts / Royal Palm with 21 law suits. Among them is the case of Arthur Macdonald who is fighting Diamond’s attempt to extort close to $100,000 in maintenance fees from him over a two-year period for a condo that cost him a bit more than $300,000. The other defendants against Diamond find themselves in similar positions.
Next in line are the Simpson Bay Resort Owner Company and the Aquarius Company with three lawsuits each, the Rainbow Beach Club with two, and four companies with one law suit each: Cupecoy Village Real Estate, Duck International (against its Oysterpond neighbor Hennie Hager), The Cliff at Cupecoy, and Royal Resort Management Company. There are also real-estate related law suits against Quantum Investment Trust and against Ratek International Ltd., a company registered in St. Lucia that bought the real estate of the Atlantis casino in Cupecoy on November 30, 2007 for $6 million.
The fight in real estate land is about one thing: money, and it seems that in many cases buyers have been swindled or misled, or they bought into something that never materialized.
Altogether these lawsuits hang like a dark cloud over St. Maarten and they have the potential to destroy any effort by the government, the Tourist Bureau and other organization to sell our country as an attractive destination abroad.
Against this background it is remarkable that the government remains so inactive in straightening out this market. Politicians are always quick to point out how important tourists are for our economy, but when those same tourists, especially the wealthy stay-overs who bought into a timeshare deal, get into trouble, they have nothing or very little to say, let alone anything to offer.
It is in a way amazing that many foreigners keep coming back to the island and to their timeshare, but we have the uneasy feeling that many do this because there is no way they’re able to sell their place under the sun to someone else under the current market conditions.
This reminds us a bit of the tourism industry in Spain a couple of decades ago. Things came practically to a full stop in the eighties due to miserable service levels and overdevelopment. When things got really bad, the government finally jumped into action and somehow managed to turn things around. But still, there are whole stretches on some of the Canary islands where nothing else is built than vacation accommodation. Without tourists, these places are dead as the proverbial doornail.
Is such a doom scenario possible for St. Maarten? We’d rather not think about it, but we realize that there is no point playing ostrich.
If timeshare resorts continue to give the island a bad name, two things will surely happen. First, the current population of timeshare owners will sooner or later pass away. A new generation will emerge will most likely new ideas about where they want to spend their vacations. If by that time the industry has managed to damage its own reputation sufficiently, this new generation will simply go elsewhere.
The result of this will be that the island remains stuck with colossal pieces of uninhabited real estate. Spend a day in Anguilla to get a feeling for what this looks like – even though the deserted properties on that island are not nearly as large as our current timeshare resorts.
All this will obviously have a negative impact on our economy, though on the upside Jules James will then have his hands free to work as a fulltime Member of Parliament.
The question is: do we really want to take our country in that direction, or are we going to heed the early warning signs and take action when there is still something to be rescued.
The initiative is first of all with the industry itself, but given its history we have little expectation that common sense will overcome greed. Therefore, the government will have to come up with some innovative ideas to improve matters and if it fails to do this, parliamentarians have a challenging task ahead of them. Since we’re all in this together, we’ll keep an eye on future developments. Unfortunately, most stories will come out of the courtroom for the time being.