Necessary Improvements to Resort Sublease Regulatory Framework

Sublease of resort properties is a common occurrence in the Maldives tourism industry. In the past half century, a significant share of tourism development is directly attributable to the creative gymnastics of sublease holders.

In the absence of any tourism law protections or specific regulatory safeguards, the resort sublease agreements are left to be governed by ordinary rules of contract with courts as the ultimate arbiter.

What can be done to remedy this?

• Define what is within or outside the scope of a sublease;
• Get the tourism law to recognize the fact and position of subleases by making appropriate inclusions in the law;
• Establish rights and obligations between headlease holders and sublease holders;
• Provide for a balancing of rights and interests between headlease holders and sublease holders;
• Institute adequate safeguards for sublease holders; and
• Cater for the protection of subleases in the event of dispute, termination, novation, or disposal of head leasehold rights.

As we emerge from the reminiscence of half century of tourism in the country, some time may also be spent on building suitable synergies between the industry and regulatory authorities with a view to upgrading, enhancing and modernizing our tourism regulatory framework so that each of the industry subsets or verticals (like resort subleases) is adequately enabled in the Maldives – not through negotiation of parties but through the operation of law.

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Read more about legal inadequacies in resort subleases.

Version of article originally published on Nasheeds Commercial Lawyers

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