The Dart group is required to provide beach club and golf course access to neighbouring property owners as a condition of its 2016 purchase of a suite of properties including the old Hyatt hotel, the Grand Court has ruled.
The decision, which follows a landmark trial that pitted 200 homeowners against the island’s largest landowner, drastically impacts the scope of any future development Dart can carry out on those sites.
The company acquired the Beach Suites Hotel, the old Hyatt property, and the Britannia golf course, in 2016.
The purchase was complicated by the fact that homeowners in the luxury Britannia Estates residential resort, which borders the golf course, had existing rights to use the sports and recreation facilities.
Dart filed a lawsuit seeking to free itself of those obligations, arguing that they should not be passed on to the new landowner when the property changed ownership.
Britannia homeowners’ rights legally established
In a judgment made public Wednesday, Justice Nick Segal dismissed those claims.
He ruled that the agreements were legally binding and Dart is obligated to honour the commitments made by the previous landowner.
The judge also ruled that Dart’s decision to remove large quantities of turf from greens had rendered the course ‘unplayable’ and had interfered with the legal rights of the Britannia owners. A separate hearing will be required to decide what compensation should be paid as a result.
Dart has already closed the golf course and it is not clear that it will be able to reopen it without incurring significant costs.
In practical terms, the judgment means the rights of the Britannia homeowners are now legally established and will have to be factored into any negotiations or decisions about future development of the properties.
It is potentially open to the developer to offer the owners access to any new facilities developed at the site as an alternative to golf and beach access, though this would need to be contractually negotiated.
Jackie Doak, president, business development, at Dart, said the company was reviewing the judgment and had “no comment at this time”.
Rights of access are carried forward
Though the Beach Suites has been redeveloped since the purchase and the resort has reopened as the Palm Heights hotel, the court ruled that the rights of access to its facilities are carried forward.
Several high-profile owners gave evidence at the trial in November.
Realtor Kim Lund, who owns a property in the King’s Court development within the Britannia complex, testified that access to the amenities of the old Hyatt hotel, including the golf course, had been a key attraction for many of the investors who bought homes in the estate.
“The right to use the golf course and to have unrestricted access to the beach and the facilities available there was presented as a key attraction to purchasing in the Britannia Resort.
“The right to play golf was expressly said to be transferable with the sale of a unit. There was never any suggestion that access to the beach, the golf course at the centre of the development, or the ability to use the tennis courts could be terminated. Quite the contrary.”
The tennis courts on the site were damaged along with the old Hyatt hotel during Hurricane Ivan in 2004.
One of the courts was buried under the extended Esterley Tibbetts Highway and the judge ruled that any right of access to those facilities was now “extinguished”.
Dart had questioned the legal status of all the rights agreed between the Britannia owners and the operators of the hotel. The developer argued that once the hotel was no longer in operation, the rights to its amenities fell away.
The court ruled, however, that the rights existed, regardless of whether the hotel did or not. Justice Segal accepted arguments from the property owners that they could have funded upkeep of the golf course through strata fees, for example.
Though he said Dart was not obligated to fund the upkeep of the course, it could not do anything that interfered with the golf access rights of the owners.
Legal firm Walkers, who represented the Britannia owners, described the trial and judgment as “of the most significant pieces of local litigation heard in the Cayman Islands in many years”.
“This judgment provides substantial reassurance to residential owners as to the security of recreational and sporting property rights in the Cayman Islands,” Walkers said in a press release Wednesday afternoon.
The release added that the judgment had also provided clarity over how the legal status of such rights should be recorded in the Land Registry, creating greater protection to owners of condos and properties with similar amenities.