Vacant units at the Sapphire Beach condominiums on the East End of St. Thomas, U.S. Virgin Islands are at the center of a recent complaint submitted to the territorial court on behalf of condo unit owners, who claim the failure of the owners of those since-vacated units to pay common charges has put considerable financial burden those who remain in good standing.
The owners who filed the complaint have had to assume payment of those charges themselves, as well as forego necessary maintenance and other improvements and enhancements to common property. James Derr, the attorney for the Sapphire residents, says the condo association has missed out on about $250,000 in uncollected fees for both the units and marina slips.
In all, 13 condo units and eight marina slips at Sapphire Beach are vacant. Unfortunately, Sapphire Beach cannot simply sell those units to new buyers because there are liens on the properties, and until the lien-holders are paid or the liens are removed, foreclosures cannot be finalized. Bayside Resort Inc., the owner of record for the properties in question, owes property taxes on the units going back to 1999, in amounts somewhere between $35,000 and $40,000 per unit.
Because there has been no progress in collecting payment, the Sapphire Beach condo owners filing the complaint have asked the U.S. Virgin Islands government to auction off the condo units and marina slips in question. An auction, according to Derr, would likely result in what he described as “a long line of bidders” hoping to purchase the vacant units and marina slips.
The complaint comes on the heels of a recent audit report that criticized the Office of the Lieutenant Governor for its mishandling of property auctions in recent years, and is sure to keep attention focused on that office as it makes its way through the court system.
One factor that makes the Sapphire Beach condo owners’ complaint interesting is that the homeowners’ association filed the complaint as a taxpayer, citing a law that gives taxpayers the right to sue to force the Government of the Virgin Islands to enforce laws. In this case, the law in question provides for the public auctioning of property as a way of settling outstanding tax debts. Although this particular law has rarely been cited, it has come up in some pivotal cases during the time since the taxes on some of those Sapphire Beach condominiums were last paid.
Because the Sapphire Beach condominium association had previously asked the government to collect outstanding property taxes, and those pleas were met with silence, the hope is that filing this formal complaint will finally settle the matter.
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