PHILIPSBURG--The Court of First Instance ruled in favour of Timeshare Owners at Caravanserai Association (TOCA) and seventeen individual owners of timeshare units at the beach resort owned by Alegría Real Estate B.V., on Friday.

 

After losing a previous injunction in November 2014, the association filed a new case in July in a renewed effort by timeshare owners to get their units back. This time, the Court ruled in the timeshare owners' favour, as it held their agreements closed with the resort's former owner Kildare, its subsidiary company Endless Vacation, or any other, to be rental agreements, which are protected by law.

 

The Court ordered Alegría to allow timeshare owners access to their properties within five days, providing they pay the required maintenance fees. In case of non-compliance, Alegría would have to pay a daily fine of US $1,000 per TOCA-member, to a maximum of $25,000 per member.

The resort owner also was ordered to pay each of the individual owners the amount of $27,589, with interest. Alegría also will have to pay the cost of the legal proceedings.

 

Alegría purchased the Beacon Hill resort in a public auction organised by Scotiabank on August 13, 2014, for $14 million. Alegría claimed it was not bound by any type of timeshare agreement.

 

The approximately 2,200 timeshare owners claiming timeshare rights at Caravanserai were informed by letter on September 30, 2014, that their previous ownership rights had been nullified and that Alegría would offer hotel units against payment instead.

 

As compensation, it offered a hotel room usage agreement that would allow usage of a hotel room and facilities at the resort against an annual fee to cover part of the resort's operational cost. Alegría wants to redevelop the resort into a five-star hotel property in two years.

 

TOCA was established in October 2014. Representing 62 of its members, who together claim to have lost $1.5 million in advance rent payments, TOCA called on the Court to grant its members access to their apartments.

 

TOCA deemed the immediate annulment of clients' timeshare agreements unjust, as these constituted a breach of contract. The association is of the opinion that timeshare agreements are, in fact, rental agreements that, as such, should be legally protected.

 

Weighing all aspects in this case, the Judge agreed that the agreements closed between the resort's previous owner and the timeshare clients should be considered rental agreements.

 

The Court stated that the timeshare agreements involve specific weeks and units at the resort, against daily rates of $118, or $2,490 per week, which was not deemed "unrealistic" compared with general rates for hotel and rentals in St. Maarten's short-term vacation rental sector.

 

The Court of First Instance had ruled in the November 2014 injunction that TOCA had no case against Alegría, because association members had not closed timeshare agreements with Alegría or with the former resort owner, but with Endless Vacation. Efforts to come to amiable solutions all proved futile.

 

Caravanserai timeshare owners vented their fury in the local media and in the United States, blaming St. Maarten for not protecting them and allowing them to be victims, as many of them had lost tens of thousands of dollars. Disappointed timeshare owners stated they would not return to St. Maarten and would spend their vacations elsewhere.

 

The Daily Herald