Rainbow Beach Club owners demand corrections to deeds

POSTED: 04/20/11 12:17 PM

Plaintiffs contest differences between purchase contracts and deeds of division

St. Maarten – The Rainbow Beach Club in Cupecoy is heading for another court case. No less than 28 owners at the property have filed a law suit against four companies, seven individuals and two banks linked to the Rainbow Beach Club. The plaintiffs demand corrections in their deed of division that differs on numerous points from their purchase contracts. The court date is set for August 9.

The owners claim that Rainbow Beach Club N.V., the legal entity that sold the apartments, tricked them into signing transfer and division deeds without making them aware of their true content. The owners, mostly residents of the United States, received very short notice about the date of the transfer at the notary. They only receive copies of the documents upon their arrival at the notary-office, “with the remark that everything was in order and that it was okay to sign.”

The notary, whose name is not revealed in the plaintiff’s petition, did not read the content of the deeds and most owners signed them in blind trust. “They were under the impression that the notary had to be an independent go between and that they could trust his word,” the petition states.

The petition reveals part of the complex construction the Rainbow Beach Club uses for its business. Among the defendants is the Mary Regina Company Ltd, established at the property, Evergreen Holdings and Green House Limited, both established in Anguilla, the Rainbow Beach Club 36S Holdings S.S., established in Panama, and individuals residing in places like Long Branch and Egg Harbor City in New Jersey and Las Vegas.

The purchase contracts state that the Rainbow Beach Club will be used “for residential purposes only.” But the transfer deed states that the property will be used as a hotel.

Another grief is that certain owners do not have to contribute to the cost for the so-called Rainbow Beach Club Facilities, while all the plaintiffs do have to pay.

Sabra N.V., the legal entity that built the Rainbow Beach Club has established a restaurant in one of the buildings, and also created a lobby, the petition states. “This indicates that the corporation is operating a hotel.” The plaintiffs argue that they bought their apartments for their peace and quiet, not to end up in the hustle and bustle of a hotel.

The deed of division also obliges the owners to report their visitors to the property manager, who in turn has to report them to the corporation (Sabra). “That violates or right to privacy and it is very unpractical,” the plaintiffs argue.

Another sore point is the obligation to use the services of by the manager approved companies for maintenance in the privately owned condos. The plaintiffs prefer to choose their own contractors, and fail to understand why the manager would have to have a say in this matter.

The deeds of division further stipulate that all locks on all doors have to be of an identical type and that owners have to surrenders copies of all keys to the manager. The owners object to that rule, saying that on several occasions the manager has entered their properties without their permission and that in some cases units even have been rented while the owner was unaware of it.

The deeds further mention that renting condos on a timeshare basis is only allowed with the manager’s permission. The owners were never told that Rainbow would operate as a timeshare project.

The owners also object to an article that limits the number of votes in meetings of condo owners to 8, while the Rainbow South building contains 34 apartments.

Rainbow has also crippled the influence of owners in these meetings with a rule that requires unanimous votes on certain decisions, like dissolving the management contract.  The owners consider this article undemocratic and demand that Rainbow makes adjustments.


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