Stephen has provided everyone with Club O news when it is available. He has done a fantastic job communicating a difficult situation. The majority owners are in a bit of a box. Anything they say can, and will, be used against them. I don’t have a dog in the fight between the majority of the owners and the “dissidents.” Last year I wrote to one of the leaders of the dissidents (Paul D) and offered to mediate the dispute. He said there was no need to negotiate.
Let me give you my point of view now.
BACKGROUND
I have been involved with Club Orient for 30 years +/-. When the resort was first being built, the owner of unit 50, did the engineering for the electrical, water and other systems that powered the resort until last year. He died, followed shortly by his wife. Their daughter has been a client of mine and has been, and will be, a lifelong friend. She hired me to handle her parents' estate. Like some of the early owners, these folks had good title to their condominium unit.
Before they died, a suit was entered by heirs of a Mr. Bearuperthuy, claiming ownership of most of the French side and much of the Dutch side, including the airport. To make a long story short, Beauperthuy’s estate (he died in the 1860s) was divided among his believed to be surviving children. A child who had absconded to the Republic of Texas was believed to be dead. He was not. His heirs (in the 1980s) raised the title issue, claiming a right to the property. Under French law, there is validity to such a claim.
As a result of the Beauperthuy claim, title to much of the community and other lands became defective. In the US we would say the title was not insurable by any title insurance company. In France, the Noitaires would not approve the title and therefore deeds could not be recorded.
Numerous trips to the island and much argument, and references to the Code Civil, we convinced the Notaire in Concorde to pass on the title from the estate of the owner of unit 50 to their daughter. When she wanted to sell, her title could not be approved, and a deed could not be recorded. Of course, this impacted the value of the property. A Swiss couple bought the property and received non-recordable documents purporting to pass such title as there was. When they died, they passed the unit to their son (a friend of mine) who is one of the leaders of the dissidents.
Several other of the dissidents have the same defective title. In fairness, some of the other homeowners have the same type of titles. My law firm has handled at least 3 other Club O sales due to the death of the owner. All those titles are not recorded.
BRINK
As all this was going on, the homeowners united in opposition to the Brink family, founders of the resort. It was believed the Brinks were making massive profits and stealing with both hands. After engaging in the lawyers’ full employment program, the owners won and found out the resort teetered at the edge of breaking even but needed ALL units in the rental pool to stay out of the red.
A BASIC DISPUTE
The resort functions best by having all the owners placing their units into the rental pool. Some of the owners were retired and wanted to roost in their units much of the year. The response was to charge a daily fee to offset some of the costs of security, utilities, landscaping etc. On top of this were the condo fees, which covered the rest of the costs of running the resort outlined in Stephen’s reports (insurance in particular). The dissidents, most of whom I know and like personally, decided to stop paying any fees. They still had access to their units, but they boarded them up when they were not on the island. They lost their electric and water connections. Some like my friend in Zurich, folks in West Chester, OH and others just seemed to not show up. They just left the units boarded up. Others brought in generators and carried water from the bathroom at the Papagayo and used its toilet and shower facilities. There was a basic issue that separated these folks. One group was willing to put their homes in the rental pool and one was not.
Part of the problem was there was no relationship between how nice your unit was, how much it was used, and how much of the pooled money would have landed in your account if the place got profitable. In many condo rental pool communities, the money is divided based on how often your unit was rented. This makes the units with a better location more valuable and it incents owners to refresh their units to stay in the “A” tier of rentals. A discussion of this issue could have been the beginning of an overall settlement. It never happened. Perhaps it should.
NEW LITIGATION
The Co-pro (the condo association) began litigation against the dissidents but as with all things in the French legal system, time passed with no signs of movement. I am a little surprised the litigation was not brought in Illinois, Ohio, MA, and other places were the dissidents could be found. That did not happen. I think most of the French litigation should be nearing an end, but for some reason, there never seems to be finality.
BACK TO TITLE
I brought up the title issues earlier because the record owners of some of the units are not the dissidents previously in possession of these units. This is perhaps a pressure point that could be used by the majority owners to compel negotiations. The main body of owners have a lot to lose, and that is the pressure being put on them. They have paid for their insurance and cannot collect. Perhaps if both sides felt the risk of losing the case could be settled. Time is on no one’s side. You have probably noticed many of the owners are deep into the Medicare years. They cannot leave this to be resolved in 5 or 10 years by the French Courts.
I was watching a PBS TV show the other evening entitled The Miniaturist. In the end, the main character had a rope tied around his neck which was connected to a large millstone. The Mill Stone was rolled down the dock and into the ocean. I would hope the owners (ALL OF THEM) would see the parallel in their lives.
WHAT CAN YOU DO?
Contact the owners you know from both groups. Press them to mediate this dispute before the millstone goes over the edge.