Opinion: Is history repeating itself?POSTED: 01/24/12 1:32 PM
The controversy between owners at the Rainbow Beach Club in Cupecoy and the project’s management has a history that goes back to the nineties of last century. Attorney mr. Jairo Bloem described it in great detail last Friday. That day, Judge mr. Diederik Thierry heard the arguments of 111 plaintiffs against Rainbow; they want the right to appoint their own manager and to contract a maintenance and security firm of their choice. Rainbow only wants to let go if certain unspecified conditions are met. The Judge rules on February 3 on the case.
While the attorney for Rainbow pointed out last week that civil law is not like a democracy where the majority rules, his opponent mr. Bloem painted a picture of Rainbow, its developer Sabra, and the beneficial owners of these companies – the Erato family – that suggests at least that the past is not entirely spotless.
But does history really repeat itself? That’s up to the judge to decide.
mr. Bloem dived into the history of Point Pirouette, and presented a copy of an article that appeared on March 8 1993 in the Reformatorisch Dagblad in the Netherlands.
Under the headline Arrests in scandal surrounding villas in Sint Maarten the newspaper reported about “the arrest of four real estate-criminals.” They were former notary Elco Rosario, real estate developer Johnny Erato and his wife, and Reynaldo Timp, the head of the cadastre in Philipsburg.
The four suspects, according to the article, “earned millions with the sale of luxurious, but qualitative mediocre villas.”
Authorities arrested the four for illegally reclaiming land in Point Pirouette, for building villas on it without a permit and for defrauding their mostly American buyers. The victims discovered that the certificates of the cadastre did not match the property they had paid for, and that the villas had been built without a permit.
“The suspicion is that the head of the cadastre collaborated closely with the notary and the project developer to pull the wool over the buyers’ heads,” the newspaper reported. Contracts for sub-renting the villas were written in such a way that the owners received only a small percentage of the rent, while “Erato never informed the owners when their homes were let.” The developer also charged the owners extortionate maintenance fees. The police treated the case as organized crime.
“The names of the suspects surface in all kinds of mala fide transactions that were done during the same period.”
According to the paper forgery of ownership papers, embezzlement and fraud were among those actions.
“History repeats itself because people repeat, Bloem said, adding that Rosario had filed an objection against the charges against him; he was not prosecuted. Johnny Erato was sentenced in the Court in First Instance for issuing forged documents and for embezzlement via water invoices and the rental pool system; on appeal, Erato was acquitted. Former Chief Prosecutor mr. Taco Stein once told this newspaper that he was “utterly surprised” about the appeal ruling.
Rosario – in the mean time removed from the notary profession – was also involved in the Rainbow Beach Club project with the Eratos, mr. Bloem pointed out. He was hired by developer Sabra N.V., a company with the same managing directors as Rainbow Beach Club Ltd.: Andrew and Marc Erato.
According to mr. Bloem, Rosario informed the buyers – the current plaintiffs in the law suit against Rainbow – that there was no need for them to seek assistance from a legal representative, because notary Schaepman had an objective role. He would take care of a transfer without any irregularities.
This led buyers to believe that they would become the owners of their apartments, and of the common facilities like the gardens, the parking garage, the swimming pools, and the fitness room.
But the deed of division suddenly contained a term for which no definition was provided: hotel facilities. mr. Bloem said that his clients had asked the notary what it meant. He confirmed that, as had been explained already by Marc Erato, that it was just another name for common areas and that this had something to do with the rental pool component.
The legal consequences remained obscured, but they are at the heart of today’s dispute: the common areas did not become the property of the buyers; they remained in the hands of Sabra. The only common areas that did become the property of buyers were foot paths and elevator shafts.
There is much more to the Rainbow Beach Club saga, but there is also something like TMI: too much information. It still remains to be seen whether the disgruntled owners will get what they think is rightfully theirs: the right to appoint their own manager and the right to select their own maintenance and security company.
Whatever the outcome will be, the Rainbow Beach Club saga does little to promote the country’s economic development because foreign investors are well aware of the situation many others find themselves in. Certain timeshare facilities have not sold a single timeshare unit in the past three years. If that is not a strong signal to clean up this pigsty, we don’t know what is.