New resort lease compensation regulations designed to benefit specific individuals: Mauroof
Legal expert Ahmed Mauroof has alleged that the Auditor General’s Office formulated the regulation on compensating resort owners upon the expiry of their lease terms specifically to benefit certain individuals. Mauroof argued that since investors develop resorts at their own risk for a fixed duration, there is no legal basis for the state to provide compensation once the lease agreement concludes.
Ahmed Mauroof, Legal Director of the MDP. | Raajje MV
Legal counsel Ahmed Mauroof has stated that the newly established regulations for compensating resorts upon the expiry of their lease periods were formulated to benefit a specific group of individuals.
The Auditor General’s Office has recently published a new policy outlining the procedures for providing compensation in instances where islands leased for tourist resort development are reclaimed by the state, either upon the expiry of the lease term or at the government's discretion.
In a post on X regarding the matter, Mauroof stated his belief that these regulations were established to facilitate the distribution of state funds to specific individuals.
Mauroof stated that once the lease period for an island allocated for resort development expires, the contractual agreement reaches its conclusion. He noted that while investors should be permitted to remove movable assets from the island in such instances, there is no legal basis requiring the state to provide compensation for the investments made on the property.
Elaborating on the reasons, Mauroof explained that investors undertake resort development projects at their own risk under agreements with clearly defined terms. He further noted that, under standard practices, investors are expected to have recovered their costs and realized the projected profits from the investment by the time the lease period expires.
He further noted that it would be unwise for the state to be required to compensate for buildings and investments when reclaiming an island upon the expiration of its lease agreement.
According to the guidelines published by the Auditor General's Office, compensation is only payable if a lease expires or if the state reclaims an island for its own purposes. The regulations stipulate that if the state reclaims an island due to a breach of contract, no compensation shall be awarded.
