Published On: Mon, May 4th, 2020

Timeshare-owners win final battle against Alegria

Alegria entrance parking lot refuge

PHILIPSBURG – After years of legal battles, the Timeshare Owners at Caravanserai Association (TOCA) has claimed victory over the Alegria Resort. The Supreme Court’s Attorney General Valk writes in his conclusion published on March 11 that the rights of the timeshare owners have to be respected.

“The significant economic interests that are at stake for St. Maarten offering protection to timeshare-owners is obvious,” Valk wrote. The attorney general referred to the protection St. Maarten intends to offer to timeshare-owners in its Timeshare Ordinance. While the parliament has approved this legislation, the government has not ratified it yet. “The government can (by explicit or silent) non-ratification block the establishment of a national ordinance.” Why the ordinance has not been ratified yet is unclear.

The key question in the Alegria-case is whether transfer or sale of a property breaks lease-contracts. Valk concludes that this is not the case: these contracts have to be respected.

In 1996, the year after Hurricane Luis pummeled the island, Kildare Properties obtained the right of long lease to three parcels of land in Beacon Hill where it built the Caravanserai Resort. Kildare established two legal entities to manage the property: the Island Hotel Corporation (for handling the hotel and restaurant business) and Endless Vacation (for handling timeshare-related matters).

Between 1996 and 2003, Endless Vacation sold more than 2,000 timeshare contracts. More than a decade later, the business was in deep financial trouble, and on August 13, 2014, the bank auctioned the property for $14 million US Dollars to Alegria.

The new owner, Ray Sidhom, sent the timeshare-owners a letter on September 30, announcing the annulment of their contracts and offering the use of a hotel room as compensation.

In October, the timeshare-owners, by then united in TOCA, took Alegria to court, demanding that it revoke the annulment of their contracts. The court sided with Alegria, ruling that Endless Vacation and not Kildare was the lessor of the properties and that Endless Vacation was not part of the auction.

The timeshare-owners hammered Alegria with another court case in 2015 and this time they obtained a favorable ruling. In August 2015, the court ordered Alegria to admit the timeshare-owners to their units and to pay them $27,589 in damages. The court identified Endless Vacation as Kildare’s direct representative.

In October, the appeals court suspended the execution of this court ruling. More than a year later, the court declared Alegria’s appeal against the ruling unfounded.

A few months before this decision, the court ordered Alegria to honor the timeshare-contracts, ruling that these contracts are in fact lease-contracts. In December, Alegria went to the Supreme Court to contest this ruling.

The Supreme Court’s attorney-general however, has now published a conclusion that declares the cassation unfounded. Valk notes that 75 percent of St. Maarten’s stay-over tourism comes from timeshare-owners. He notes that Alegria has not contested the conclusion that timeshare-contracts are lease-contracts and that Endless Vacation was the contract-partner, not Kildare. Furthermore, Valk refers to St. Maarten’s civil code; it establishes that the rights and obligations of tenants transfer to the new owners of real estate.

Alegria Resort Battleground

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Related articles:
The Alegria vs Timeshare-Owners court case dossier