Beware of those who are stealing property from property investors with the claim of a verbal contract!
Do you know that a landlord has to support an Antillean or even a St. Maarten Resident if they can not pay rent?
That’s right! it could take up to two years of giving free rent to get them out for not paying.
Further, did you know that they can claim a verbal contract, show no proof and get the police to support them.
That is right, real instances here that are happening here in St. Maarten. As the economy downturn continues. St. Maarten’s prosperity period is over. The building boom is dead. New construction is laying vacant and prices have dropped 35% in places such as Cupe a Coy Yacht Club and other new high end buildings.
There are still buyers who arbitrage the Euro for the Dollar but they too are seeing that the island has big problems for foreign real estate investors that are becoming very visible. Approximately 80% of the real estate in St. Maarten is purchased by foreign investors (i.e. no resident card). Yet this sector has no legal protection and is often the target of harassment. In fact, the tenant laws of St. Maarten prohibit a foreign investor from removing a tenant that has not paid rent. Testimonies on the island claim up to eighteen months or longer and statements from law firms on the island confirm this time frame to remove a non-paying tenant through the legal process.
I own a home near Philipsburg, I rented it to a nice woman from Curacao and her boyfriend. They moved in and all was fine for six months, then she lost her job, the boyfriend who was working construction was then told his project was being put on hold due to the lack of sales. That is bad times that no one wants. I sympathized but I also have bills and live off the rental income generated by this apartment and two others.
What surprised me was that when the couple became two months behind in rent, I pressed them for some payment and told them they would have to move out if they did not pay. They called the police on me! That is right, my non paying tenants threatened me! The police showed up, no RST told me in a threatening and argumentative manner that I could not ask or force the non-paying tenant to leave. When do police make such house calls?
So I called my lawyer and he explained the tenant law to me. The law protects the tenants not the land owners when they do not pay!!! Can you imagine the shock my wife and I had! We were being harassed by police in our own yard because the tenants owned us money. We were also told by the police that we can not enter the tenants property \without their approval? THE TENANTS PROPERTY!!! Where in the world does that make any sense?
This law has to change to protect what is probably the first or second largest source of foreign investment on the island. IF it does not I suggest the Island Government provide rental compensation to property owners for just such events. How can any Government turn to a private individual and demand that they must provide free housing without any compensation from that Government?
Times are tough all around the world, this little island haven where my mother was born (but I was born in England) is not forcing me to adopt a policy to rent only to non-residents and vacationers. And with this decision comes another problem, with the excess of short term rental property on the market combined with the reduced number of visitors to St. Maarten, the short term rental market is just not very good and prices have dropped there also. Plus renting to weekly visitors has a higher cost of both advertising and turnover.
So the only logical answer is to rent to illegal residents. This way if they do not pay, I can call immigration on them at least. Is this really where the Island Government wants their Tenant law to go? I do insert that possibility that the Island Government is not responsible for the Tenant law and it was adopted from Curacao or Holland itself, so while I have not confirmed the origin, I have confirmed the impact. So should I sell and move to Curacao where my parents now live or to the States where the laws of most states protect the landholder or back to England? Leaving behind vacant unrented property for friends and family to use? Or can legal protection be put in place to protect real estate investors and those who be honest hard working and successful rather than those who know how to take advantage of the system and milk me for free rent.
I know from talking with friends and other home owners that the same thing has happen to others. Some have turned off GEBE and the tenants continue to live in a home with no water or electricity. Then they go to GEBE who tells the owner, they can not turn off the utilities if someone is living in there. BUT GEBE can turn them off if someone is living there for non-payment. So the only way to get utilities turned off is to not pay the bill, but if the tenant walks in and pays, GEBE will turn the utilities back on for them even against the owners instructions!
Perhaps GEBE should provide free utilities to non paying tenants?
THE NEXT FEAR FOR PROPERTY OWNERS IS ANOTHER ANTIQUE LAW - THE VERBAL CONTRACT. The worst that I have heard of is a tenant that claimed the owner promised to sell them the property below market rate. The tenant who stopped paying rent already, then somehow had the money to file a legal action against the property owners, claiming Verbal Contract to Purchase the Property. Now there is no proof on either side but the tenant has managed to remain in the property while the case has gone to court. Verbal agreement to purchase property? Worse is that the tenant claims the discussions were over the phone with the owner in Canada.
How can that even hold up in court but in St. Maarten apparently it is law and other way for foreign investors to be threatened. I am never the one to complain without a solution. So be my thoughts on how to fix this. Strike the tenant law off the books and strike the antiquated verbal contract from the books, get up with the modernt times. Protect the land owner and provide some form of payment to people who loose their job from SVB or other sources to pay rent (BUT do not give the money to the tenants). In many countries it is common for the land owner to agree to a reduced rent of say 20% lower, paid to them directly by the government for a period of time not to exceed six months. If the tenants have not found a job by then they must go on welfare and move to government housing or the street.
Sounds tough but welcome to the world economy people are loosing cars, homes and more because they were over leveraged and they lost their jobs. Heck even the banks in the US have gone bankrupt and needed to be bailed out.
I invite The Daily Herald to publish an article entitled The FACTS OF TENANT LAW and VERBAL CONTRACT IN ST. MAARTEN. I challenge real estate companies to produce a fact sheet to inform new and current investors. I pray for the judges to consider the justice of the current laws and see past the antiquated and determine true justice, and I beg the law makers to consider getting these two laws stricken or revised.
A Property Owner like many others who is tired of being taken advantage of by those who abuse the system and who is concerned for all property owners and the long term health and attraction of investment to St. Maarten.
J.A. Wentworth
