Caravanserai owners unique amongst victims of takeover

February 21, 2015 10:39 AM
PHILIPSBURG - A California couple who cashed in part of their retirement fund to invest in buying a unit at the former Caravanserai Beach Resort have been thrown into the same basket as approximately 2,200 timeshare owners who had their rights at the same property annulled when it was taken over by Alegria Real Estate BV.
The couple received an eviction order earlier this month, after a trial of which they reportedly had not been informed took place.
 
Chasing ownership
John and Shandrea Degen signed the relevant paperwork with Caravanserai in 2007. They have proof that the purchase was “paid in full except for closing cost” to Kildare at US $100,000 and a “private unit” plaque was mounted on the door of their condominium. Another $30,000-35,000 was spent furnishing and fitting the condo.
 
The same paperwork states that the title to the unit “will be transferred in ownership to the buyer … through a notarial deed … no later than 90 days after the completion of the final stage of its construction.”
 
However, the title never was transferred and the purchase never closed through a notary. The unit actually was located housed in the property’s timeshare building, although it was an outright purchase, but the building was not subdivided – a necessary procedure for the title transfer.
 
The Degens later took Kildare to court, but were informed by their lawyers in June 2014 that the unit could not be transferred. According to written correspondence, their “right to obtain the property in ownership was established” and Kildare would be obligated to transfer the property once the bank – Scotiabank, which was not called by name – authorised this.
 
However, the bank did not “wish to cooperate” in signing a deed of division, which would need to be created by the developer, and was not willing to remove the mortgage because of debts owed by the resort.
The court ruled that if the bank did authorise the division and if Kildare carried it out the Degens would be “entitled to damages that would equal” their “investment and losses,” according to the lawyer’s correspondence.
Shortly afterward, Kildare declared bankruptcy and Alegria Real Estate purchased the Caravanserai property in August 2014 through an auction commissioned by Scotiabank.
 
The Degens were said to have spent some three years and $12,000 on the lawsuit against Kildare and to have contacted new management shortly after the takeover concerning the issue.
 
The last trial
This contact, shortly after the takeover, was the last that they had with new management until a mid-January 2015 verdict by the Court of First Instance was delivered to them, in Dutch.
 
As reported in The Daily Herald on January 17, the court verdict stated that the Degens had lost an injunction that Alegria had filed against them, as they held no long-lease rights to the unit. They were ordered to vacate the apartment and hand over the keys within two days of officially receiving the verdict.
 
Alegria would be entitled to seek assistance of the “strong arm of police and justice” to enforce eviction if necessary, the judge added. The defendants also were ordered to pay legal expenses, estimated at NAf. 1,703.
 
As they were unable to interrupt work on short notice and fly to St. Maarten, a friend moved their belongings from the unit for them around a week ago.
 
Although the verdict was addressed to the couple’s California residence, the couple was listed as living in St. Maarten and as not having shown up for the court hearing. The Degens had not been made aware of the court case, according to a trusted source.
 
Although documents were provided to this newspaper with their consent, the Degens, who are trying to put the experience behind them, chose not to be interviewed. Instead, they provided a short statement on the matter.
John said the problem stemmed from the contract not being “deeded, or notarised, or even a 99-year lease. … We should have had a lawyer proofread it for us and we didn’t. That was our fault for not knowing better in a foreign country.”
 
Notaries
Buying property in St. Maarten is noticeably different than doing so in the United States (US), where the process is more centralised and coordinated between buyer, realtor, notary and bank. It is not uncommon for all needed legal paperwork to be completed within one sitting.
 
Another point of difference in St. Maarten is that the notary ultimately says who legally owns what; notaries play a less central and critical role in the US.
 
When asked by this newspaper, a local notary’s representative said. “The law requires two things” for ownership to be established, “a notarial deed and registration at the kadaster’s office. The purchase agreement is a private document between parties.”
 
She further said in an invited comment that properties usually were subdivided before being sold and that this even could be done before construction.
 
A reason purportedly given by former Caravanserai owner Haresh Manek for the building not being subdivided was that the resort still was under construction. As stated in the contract, the title transfer was to take place a maximum of 90 days after completion of the unit’s construction. However, as explained above, this was not supported by the bank.
 
‘Disgusted’
One former Caravanserai sales director told this newspaper he was “heartbroken for them as well as the timeshare owners” and was “disgusted” that nothing was being done about it by the Government or Prosecutor’s Office.
 
“Why is the prosecutor not looking into Scotiabank and Manek?” he questioned, pointing out that, besides all obvious issues, the property is located on Government-owned land.
 
This former sales director is not alone in saying so. The large group of timeshare owners affected by the takeover have questioned publicly why the bank and former owner were not being held responsible. Manek has been said to have been collecting fees until shortly before declaring bankruptcy. Many affected also blame Government for not being able to protect them.
 
The end
The Degens also reportedly had invested in timeshare at Sapphire Beach Club and Resort and Royal Islander Club. Sapphire timeshare owners were informed unexpectedly by timeshare exchange network RCI in late January that the property, along with their privileges, had been “placed on suspension,” a move apparently tied to the property’s multiple maintenance issues.
 
However, any issues with Sapphire, as with any progress made in timeshare owner protection, will hardly affect the Degens. A source close to them said they did not want to return to the island. Like many of the duped timeshare owners, they had been repeat visitors who normally brought their family along with them.
 
The Daily Herald
 
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