Of Resorts And Glue - A Sticky Legal Problem
Issues regarding enforcement of positive covenants in mixed-use
resorts.
A five-star boom
The Turks and Caicos Islands (TCI) have experienced an enormous
growth in luxury tourism development in recent years. As the
territory has developed, the size and sophistication of resort
development has increased significantly. The early days of pioneer
stand-alone projects are rapidly disappearing as large scale
mixed-use branded five star resorts become the norm. Recent
developments include:
Amanyara, the first Amanresort opened in the Caribbean, is
located on TCI's commercial centre, Providenciales ?
main elements: hotel and villas.
Work is progressing on the prestigious Dellis Cay project which
will feature a Mandarin Oriental hotel ? main elements:
hotel, condominiums, villas and over-water villas
A Ritz Carlton resort on West Caicos is near completion
? main elements: hotel, condominiums and villas
Ambergris Cay, a large-scale private-island retreat, with its
own jet-strip ? main elements: villas and sporting
club
The early resort developments in TCI, primarily on Grace Bay
beach on Providenciales, tended to be stand-alone condominium
developments which benefited from TCI's flexible, modern and
straightforward Strata Titles Ordinance which allowed for the
vertical subdivision of real estate. In recent years, as projects
have expanded in size, scope and sophistication, resorts have
become more mixed-use, featuring hotels, condominiums, villas
(standing on their own land parcel), and over-water villas. Several
of the developments currently underway include a variety of other
large scale amenities such as golf courses, marinas and beach
clubs. The demands that this increased sophistication imposes on
the resorts' TCI lawyers are significant, but hardly
unique.
The "legal glue" problem
A major concern of any sensible of any developer of expensive
mixed-use resorts is the enforcement of ownership restrictive
covenants, the legal glue that binds such developments together.
When projects in TCI were stand-alone condominium resorts, there
was little problem: the Strata Titles Ordinance provides an
excellent legal framework for the governance of such developments.
However once other components (such as villas) were introduced,
matters became more complicated, due to a legal problem common in
many common law jurisdictions in the English-speaking Caribbean and
elsewhere.
At common law, only covenants which are negative in nature are
said to "run with the...
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