PHILIPSBURG--The need to document all rental agreements in writing, to improve the issuance of receipt for payments and standardising lease contracts were some of the areas highlighted during Friday's Parliament hearing on changes to the Civil Code related to property rental and related topics. Members of Parliament (MPs) shared views on the content of the draft law with the representatives of the Rent Commission and the two real estate groups.
Joseph Peterson of the Rent Commission, a government department, expressed the need for the maximum property value for which the commission can get involved in a rental dispute to be raised. At present, the value ceiling is at NAf. 130,000 for building and land. The draft law would move that amount to NAf. 250,000. Peterson recommended based on the reality of real estate prices for that amount to the move to NAf. 400,000 for building alone.
Peterson also underscored the need for all receipts to be in writing for rental payment with the amount, period paid for, names of renter and landlord and signature clearly stated. This recommendation stems from numerous disputes reaching the Rent Commission with details being in contention. This, he said, may seem "superfluous" but it is not as common as one would think.
MP George Pantophlet (NA) agreed that receipts are vital in rental, as in other transactions, to ensure transparency and lessen disputes.
On the rental security deposit, he said landlords were finding the "slightest or silliest reasons" to retain the deposit. Once a lease has ended, the landlord should inspect the property so see if "any real damage" was done, if this is the case there is ground to retain the deposit.
Some landlords are using late payment of rent to withhold the deposit. To keep the deposit for such a reason is in Peterson's opinion "too excessive." To remedy this, he suggested that regulation be made that would give the landlord the right to levy a late fee as is charged by banks for late payment of mortgages or other loans.
Another suggestion for addition to the new legislation is a scale for determining how many people can reside in a particular size of building. Peterson said there are cases where six people could be found living in a two-bedroom unit.
He also disclosed that the commission is called at time to determine the rental price for places that are "not fit for animals" much less for a human to inhabit it. He wants the possibility to be included that in such cases the Ministry of VROMI (Public Works) and the Ministry of Health can get involved to condemn the structure, especially in cases where landlord charge exorbitant rent.
Peterson noted that the changes to the Civil Code are in line with several areas that the Rent Commission has been clamouring for many years now.
Rent defaulters
Leyton James, also of the commission said the commission does not have the power to evict defaulting renters. It can only give a determination in a dispute and it's up to the court to issue an eviction notice. A landlord has to wait for a renter to default for at least three months before having a legal recourse and in the meantime may be dependent on that income to meet their mortgage or other financial obligations. James suggested that this period be shortened.
MP Louie Laveist (NA) does not believe that three months is enough grounds to move for an eviction
"You can't do that to my people ... this is not a reasonable period," he pleaded during the hearing. He added that all gaps in the legislation must be closed so that it does not become "a toothless tiger."
Dieter Schaede of St. Maarten Real Estate Association SXMREA said there have been numerous cases of renters defaulting on payments and landlord having to move to court to get them evicted and to recover their funds. Of those defaulters, some 75 per cent are people from the French side renting on the Dutch side. "They seem to have the feeling that they can get away with it." They are even bold enough to switch realtors to get a different place.
MP Patrick Illidge (independent) said it was time to put the Dutch side/French side cooperation "to the test" to curb defaulters crossing the border to avoid payment, a similar scenario to men from the French side dodging their child support obligations on the Dutch side. "It can't be that guy can just cross the border and we can't put a hold on him."
Illidge also suggested the Rent Commission establish a registry of chronic defaulters that could be accessed by the public; a suggestion supported by Real Estate Association of St. Maarten RAM President Arun Jagtiani. Peterson said the commission has files dating back some eight years. Laveist said these should be fairness: if the renter's information could be accessed, so should the landlord's.
MP Frans Richardson (independent) asked about the number of tenants living in the Belvedere social houses that have approached the rental commission in disputes. Peters said some 99 per cent of the cases from that area have been from the St. Maarten Housing Development Foundation (SMHDF) about defaulters.
More than a deposit
MP Dr. Lloyd Richardson said the eviction process needs to be better detailed in the legislation with the roles of the judge, police and other people/entities clearly defined. Another clause that should be added is how long can a defaulter be perused for back rent by a landlord.
To guarantee rent is paid on time, Dr. Richardson recommended that more than a security deposit (often equal to one month for each year of a lease) be supplemented with "something more significant" from the renter, collateral of sorts.
Jagtiani disagreed with the inclusion of "collateral" from a renter, adding that often renters don't have a lot so there would not be much to put up in addition to the security deposit.
Working relationship
Jagtiani pointed out that RAM was keen on working with the Rent Commission and the other real estate association to better regulate rental matters via the law and standard practices. He used the example of an HGTV House Hunters International episode he was involved in that almost moved from great publicity for the country to a very negative highlight. A couple from the US bought a property here and the tenants refused to move out despite repeated notices.
Speaking about clauses in the draft legislation, Jagtiani said RAM has no strong objections to it. However, there were points that needed further explanations such as the term "short term rentals." The law starts that short term rentals will be exempted from certain rules and regulations, but there's no definition in the draft for what constitutes a short term rental. This still has to be determined as talks on the changes move forward.
Property defects and remedying such are addressed in the law with a landlord given "reasonable time" to make corrections and should this elapse; the renter can claim the right to fix e.g. a broken fan or leaky pipe. Jagtiani pointed out that the draft law does not definewhat that "reasonable time" is. Reasonable time for the fixing of problem, he added, would be determined by the size and nature of the issue as well as cultural background which affects expectations.
Standard lease
Jennifer de Gonzaque of SXMREA is in favour of a standardised lease to be used for rentals to decrease ambiguity and improve protection for renters and landlords. She added that the issue of defaulters is also experienced at the higher end of the market.
Marc van der Bilt of RAM also sees the need for rental agreements to be in writing and standardised. He said RAM wants to work on this area with the rent commission and other real estate professionals. He also suggested that the three entities work on an awareness campaign to inform people of their rights, obligations and the type of matters that should be taken to the rental commission. This way the rent committee is "not overburdened with unnecessary cases."
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