Timesharing or Vacation Ownership
Originated in France in 1967 as a result of a decline in the real estate market, Resort Timesharing has existed in the Caribbean since the nineteen seventies. Over the years various names apply for the concept, which provides a right to use a property, mostly situated in a vacation resort for a designated period of time of the year. Recent developments in the region include Villa and Condominium "time-shared ".
Sint Maarten together with Aruba, two Dutch Caribbean islands, contains almost 50% of all Timeshare units in the Caribbean. The concept has been one of the fastest growing vacation and real estate industries in the region. Residents of the United States -- in particular New York, New Jersey, Massachusetts and Florida -- account for approximately 75% of Timeshare purchasers in the Caribbean.
The concept has been refined, lessons learned, and sale techniques sophisticated, as are the prospective buyers in the industry. Self regulation has guided the industry on Sint Maarten for the past ten years in the absence of formal legislation to govern the various aspects of the concept. No matter what the name given or contents of the project may be, the main characteristic of the concept is: the right to use an accommodation for a recurring designated period of time. The amenities offered during the period of use are an important part of the concept.
A project may offer a deeded or non-deeded right to use, for a fixed period per year, bi-annual use, floating or split time, use based on a point system, and more. The purchase price varies per resort, villa or condominium, season, country, location of the property, location and size of the unit, amenities, quality of services offered, or type of plan.
In April 2005 a National Ordinance was approved by the Parliament of the Netherlands Antilles, to organize and govern Timesharing, also referred to as Vacation Ownership, within the Netherlands Antilles. Timesharing can now be offered as either a deeded or non-deeded plan. Apart from organizing Timesharing under the rules and regulations governing Condominiums, which is optional, the Ordinance provides for consumer protection patterned after Dutch law, and by extension the rules and regulations established by the European Directive of October 1994 to harmonize the laws on Timesharing in the Member states. A balance has been sought in placing the responsibility of decision-making at time of sales with seller and buyer.
The Ordinance provides for consumer protection against unfair and deceptive practices, recruitment of potential buyers, misleading information, undue pressure and harassment, intimidating sale practices, protection of the financial interest of buyers, as well as sellers, by regulating rescission and cancellation procedures. A rescission period of five days, including Saturdays, Sundays and holidays, is provided for. During this period the buyer may cancel the purchase agreement without any reason or consequences, other than payment of a maximum of 3% of the purchase price to cover administration costs. Dissolution in writing of the purchase agreement will also dissolve any lending agreement, without a penalty.
A lending agreement whereby a loan is provided by a third party will however have to be cancelled in writing, also without a fine. In case of advance payment of the purchase price, or part thereof, within the rescission period, the seller has to provide security for immediate repayment of the advance payment, reduced by the compensation for administration costs. No deviation from the Ordinance to the detriment of the buyer may be made. Deviation from any provision stipulated in the law to the detriment of the buyer may result in the agreement to be declared null and void. Deviation in favor of the buyer is allowed.
Transparency regarding the development, sales and long term management of the property is of utmost importance. A proper management structure, in particular after the project has been sold out, is vital for continued operation and quality of the facility. Yearly maintenance fees should cover operational expenses and create a reserve fund for ongoing maintenance. Some projects relinquish the maintenance and operation of the facility to the collective Timeshare Owners, who in turn hire a management company of their choice, after a certain percentage of the project, has been sold out.
With Caribbean Timeshare Owners in general being very pleased with their purchase, the Timeshare industry contributes significantly to the region's economy with a year-round occupancy rate, less seasonal visitors' flow, and Timeshare owners usually being the first group to return to the islands after devastation by a hurricane, to visit their "home away from home". Related industries such as international exchange companies, resale and listing agents, and Timeshare trusts have enhanced the product.
Thus far Sint Maarten has no special licensing requirements for developers, sales and marketing agents or management companies. The general requirements for establishing a business on Sint Maarten apply. Resorts offering a high quality product with traditional hotel accommodation combined with Timeshare or Vacation Ownership are preferred, to guarantee profitable continuation of a project.
A yearly tax of US$ 50.-- per Timeshare week is levied from the Timeshare Owner per year. A Timeshare Association with island wide membership is available to discuss and attend to the needs and interests of all parties in the industry. With the enactment of aforementioned Ordinance, the Netherlands Antilles join the league of countries that provide the consumer in the Timeshare Industry appropriate protection.