COURT RULES ALEGRIA DOES NOT HAVE TO HONOR TIMESHARE CONTRACTS FROM CARAVANSERAI

1. Ruling is below. It's in Dutch; we are trying to get it translated.

2. We do not know if the litigants will appeal.

3. No idea whether Alegria will offer any kind of olive branch, or what kind of support the island or SMTA may offer. We are trying to get statements on all of this.

4. If you are a Caravanserai timeshare owner, hang in and don't despair; we have a hunch this is not yet really over.

Here is the text:


GERECHT IN EERSTE AANLEG VAN SINT MAARTEN


Zaaknummer: KG 2014/144
Datum: 28 november 2014


Vonnis No.: VONNIS IN KORT GEDING

In de zaak van:

TIMESHARE OWNERS AT CARAVANSERAI ASSOCIATION,
gevestigd in Sint Maarten,
-eiseres-,
gemachtigde: mr. M.M. Hofman-Ruigrok,

tegen

ALEGRIA REAL ESTATE B.V.,
gevestigd in Sint Maarten,
-gedaagde-,
gemachtigde: mr. C. van Amersfoort.

Eiseres wordt hierna ook aangeduid als ‘de Vereniging’ en gedaagde als ‘Alegria’.

1. Het verloop van het kort geding

Het verloop van het kort geding blijkt uit:

- het op 28 oktober 2014 ter griffie ingediende inleidend verzoekschrift van de Stichting met producties;

Voorafgaande aan het geding hebben partijen aanvullende producties in het geding gebracht. Ook heeft de Vereniging na aanvang van het kort geding en voorafgaande aan de voortzetting op 14 november 2014 bij brief van 13 november 2014 producties in het geding gebracht.

Op heden is vonnis bepaald.

2. Het geschil in kort geding

2.1 De Vereniging vordert – zakelijk weergegeven – dat het Gerecht bij uitvoerbaar bij voorraad te verklaren vonnis (i) Alegria beveelt om de brief gedateerd 30 september 2014 met onmiddellijke ingang in te trekken op straffe van een dwangsom (ii) Alegria beveelt om de leden van de Vereniging toe te laten in hun timeshare units en de timeshare rechten van de leden van de Vereniging te honoreren op straffe van een dwangsom en (iii) Alegria in de proceskosten veroordeelt.

2.2 De Verenging legt aan de vordering ten grondslag dat de timeshare overeenkomsten van de leden van de Vereniging dienen te worden beschouwd als huurovereenkomsten. Het Gerecht begrijpt de redenering van de Vereniging zo dat op de in opdracht van de Bank van Nova Scotia (“de Bank”) gehouden executieveiling van de aan Kildare Properties Ltd toebehorende erfpachtrechten deze rechten aan de heer Rafik R. Sidhom zijn verkocht en nadien geleverd. De heer Rafik R. Sidhom heeft deze erfpacht rechten vervolgens doorverkocht aan Alegria. Alegria is derhalve gebonden aan de huurovereenkomsten zodat Alegria deze huurovereenkomsten, de timeshareovereenkomsten, niet als gevolg van de executieveiling opzeggen dan wel vernietigen. Beroep op de huurbedingen in de hypotheekakten komt Alegria dan ook niet toe. Ook komt Alegria geen beroep toe op de huurbedingen omdat de Bank altijd heeft geweten dat de erfpachtrechten aan derden werden verhuurd en de Bank altijd van deze huurinkomsten heeft geprofiteerd. De Vereniging doet verder een beroep op het bepaalde in artikel 7:226 BW waaruit volgt dat in geval van een overdracht van een onroerende zaak de rechten en plichten van de huurovereenkomsten overgaan op de verkrijger van deze onroerende zaak: Alegria volgens de Vereniging. Op grond van het voorgaande dient Alegria de timeshareovereenkomsten te respecteren en kan Alegria niet eenzijdig deze overeenkomsten opzeggen dan wel vernietigen.

2.3 Alegria betwist de vordering gemotiveerd waarop het Gerecht hierna, waar nodig, zal ingaan.

3. De feiten

a. De leden van de Vereniging hebben zogenoemde timeshareovereenkomsten gesloten met ENDLESS VACATION N.V. dba Caravanserai Beach Resort Beacon Hill (vergelijk de brief van 13 november 2014 van mr. M.M. Hofman-Ruigrok overlegging producties).
b. De Bank heeft op grond van haar hypotheekrechten in verband met tekortkomingen van Kildare Properties Ltd. (‘Kildare’) in de nakoming van de verscheidene geldleenovereenkomsten de aan Kildare toebehorende erfpachtrechten geveild.
c. Deze erfpachtrechten zijn blijkens de akte van 13 augustus 2014 van de notaris mr. F.E.E. Tjon Ajong: ‘(…) The Appearer, acting on behalf of Creditor, hereby declared to adjudicate said immovable property to Mr Rafik R. Sidhom, aforementioned for the amount of fourteen million Dollars, United States currency (US $ 14,000,000.00) (…)’ Uit dezelfde akte volgt ook dat de gemachtigde van Alegria tijdens de veiling het bod van US $ 14.000.000,00 heeft uitgebracht ten behoeve van zijn principaal Mr Rafik R. Sidhom (‘Sidhom’).
d. Bij akte van 27 oktober 2014 is ten overstaan de notaris mr. Mingo de Vereniging opgericht. Doel van de Vereniging is:
a. to represent the interests of the timeshare owners and/or timeshare right holders of Caravanserai beach Resort on Sint Maarten in the widest sense of the word, including representation in and out of Court;
b. to attain these objectives inter alia:
I. by starting and acquiescing in legal actions and entering into commitments,
II. by giving advice and assistance with other organizations;
III. and supporting all initiatives favorable to the members, this by all other lawful means which the Association deems conductive to its objects. (…)’
e. In de brief van 30 september 2014 van Alegria aan ‘all persons claiming timeshare rights at the Caravanserai Beach Resort’ is gesteld:
‘(…) On August 13, 2014 the properties have been publicly auctioned by the bank of Nova Scotia. The transfer of the Properties to Alegria Real Estate B.V. has been completed on September 15, 2014. In article 8 of the special auction conditions, the Bank of Nova Scotia reiterated the prohibition of renting out the Properties without its written permission and leaves it up to the buyer of the Properties (i.e. Alegria Real Estate B.V.) to invoke the annulment of any rental agreements concerning the Properties.
‘(…) If you have entered into any type of timeshare agreement with Endless Vacation N.V. for a timeshare unit at the Caravanserai beach Resort, please note that Alegria Real Estate B.V. is not bound by such agreement, and you are no longer entitled to make use of the timeshare unit or any related timeshare exchange programs.
‘(…) Although Alegria Real Estate B.V. or its affiliates are not responsible for the loss of your timeshare right and related exchange programs due to the auction of the Properties, it does sympathize with the sudden loss of your timeshare right. As a courtesy to you, the new operator of the resort , Alegria Operations N.V. (affiliate of Alegria Real Estate B.V.) offers you a hotel room usage agreement that you will find enclosed. This agreement will allow you to enjoy the use of a hotel room and facilities at the resort against an annual fee to cover part of the operational costs of the resort. (…)’
f. Bij brief van 10 oktober 2014 van de gemachtigde van de Vereniging is Alegria bericht:
‘(…) Our clients received a letter from Alegria Real Estate B.V., dated September 30th, 2014 and signed by you, announcing the annulment of their timeshare agreement, including and related timeshare exchange programs. We hereby inform you that the clients deem your letter and the asserted claims unacceptable. More specifically, the claims of an immediate annulment of clients’ timeshare agreements are unjust, and, may constitute a breach of contract.

As such, we urgently request and summon you that the abovementioned letter dated September 30th2014 is retracted within two business days as of the date of this letter, that is, by Tuesday 14th October 2014. (…)’
g. Aan deze sommatie heeft Alegria geen gevolg gegeven.

4. De beoordeling in kort geding

4.1 Het Gerecht overweegt en oordeelt voorshands als volgt.

4.2 In de aard van de vordering ligt de spoedeisendheid besloten.

4.3 Veronderstellende dat (i) de Vereniging op grond van artikel 3:305a BW e.v. in de vordering kan worden ontvangen (ii) niet Alegria de veilingkoper is maar Sidhom en (iii) de timeshareovereenkomsten als huurovereenkomsten dienen te worden beschouwd, kan de vordering desondanks niet worden toegewezen omdat de timeshareovereenkomsten van de leden van de Vereniging met Endless Vacation N.V. zijn gesloten. Het bepaalde van artikel 7:226 BW is mitsdien niet van toepassing. Immers, Endless Vacation N.V. heeft de erfpachtrechten niet overgedragen dan wel zijn deze rechten niet ten laste van haar geveild. Verder is niet gesteld of gebleken dat Alegria deze overeenkomsten met medewerking van de leden van de Vereniging van Endless Vacation N.V. op grond van artikel 6:159 BW (contractoverneming) heeft overgenomen.

4.4 Op deze grond kan de vordering niet worden toegewezen nu voorshands moet worden aangenomen dat Alegria niet gebonden is aan de timeshareovereenkomsten met de leden van de Vereniging. Alegria hoeft dan ook naar het voorlopige oordeel van het Gerecht deze timeshareovereenkomsten niet respecteren.

4.5 Het Gerecht hoeft – gelet op het voorgaande – niet in te gaan op de vraag of Alegria een beroep jegens de (leden van de) Vereniging toekomt op de in de hypotheekakten opgenomen huurbedingen. Immers, de hypotheekgever, Kildare, is op grond van de timeshareovereenkomsten niet de verhuurder van de (leden van de) Vereniging, maar dat is naar de voorlopige opvatting van het Gerecht Endless Vacation N.V.

4.6 Als de in het ongelijk te stellen partij zal de Vereniging in de proceskosten van Alegria worden veroordeeld die tot op heden kunnen worden begroot op NAf 2.229,50 waarvan NAf 279,50 aan betekeningskosten, NAf 450,00 aan vastrecht en NAf 1.500,00 aan gemachtigdensalaris.

4.7 Het Gerecht zal de proceskostenveroordeling van het vonnis uitvoerbaar bij voorraad verklaren.

5. De beslissing in kort geding

Het Gerecht:

5.1 wijst af de vordering;

5.2 veroordeelt de Vereniging in de proceskosten vallende aan de zijde van Alegria die tot op heden kunnen worden begroot op NAf 2.229,50;

5.3 verklaart de proceskostenveroordeling uitvoerbaar bij voorraad.



Dit kort geding vonnis is gewezen door mr. C.T.M. Luijks, rechter in het Gerecht in eerste aanleg te Sint Maarten, en uitgesproken in het openbaar in tegenwoordigheid van de griffier op 28 november 2014.

OK, please do post when you have some additional information.

I translated the ruling, but it was difficult to understand the context of certain paragraphs. It does appear, as OP states, that the court ruled against the TS owners and assessed court costs against them.

That said, the sending of maintenance fee bills and other behavior indicates to me that Alegria needs a good percentage of the TS owners to sign up. It is part of their business plan. I would think that if you like the resort, and didn't sign the letter yet, you probably still have some leverage with Alegria. A week at a nice resort for payment of the MF is a pretty good deal, no matter how hard it is to swallow the loss of the equity investment. I have a TS in Myrtle Beach I wish I could get rid of...

Robin,
I loaded this into the Gotham City Bat Computer Translator and got this result. Holy Timeshare Batman!.

COURT RULES DOES NOT HAVE TO HONOR ALEGRIA TIMESHARE CONTRACTS FROM Caravanserai

1. Ruling is specified. It's in English; we are trying to get it translated.

2. We do not know if the litigants will appeal.

3. No idea Whether Alegria will sacrifice any kind of olive branch, or what child or support the island or SMTA May sacrifice. We are trying to get statements on all of this.

4. If you are a timeshare owner Caravanserai, hang in and do not despair; We have a hunch this is not really over yet.

Here's the text:


COURT OF FIRST INSTANCE OF SAINT MARTIN


Case Number: KG 2014/144
Date: November 28, 2014


Verdict No .: JUDGMENT OF INTERIM MEASURES

In the case of:

TIMESHARE OWNERS ASSOCIATION AT Caravanserai,
located in Sint Maarten
-eiseres-,
Agent: mr. M. M. Hofman-Ruigrok

against

ALEGRIA REAL ESTATE BV,
located in Sint Maarten
-gedaagde-,
Agent: Mr. C. van Amersfoort..

Plaintiff is also referred to as 'the Association' and defendant as 'Alegria'.

1. The course of the lawsuit

The course of the lawsuit is evidenced by:

- On October 28, 2014 at the Registry original application submitted by the Foundation with exhibits;

Prior parties have brought additional exhibits in the proceedings of the case. Association also after the commencement of the lawsuit and prior to continuing on November 14, 2014 by letter of November 13, 2014 productions at stake.

Date judgment was rendered.

2. The dispute in summary proceedings

2.1 The Association court - in essence - that the General Court enforceable judgment declaring (i) Alegria recommends to the letter dated September 30, 2014 to withdraw immediately on pain of a penalty (ii) recommends to the members of Joy to allow the Association in their timeshare units and timeshare rights of members of the Association to honor condemns penalities and (iii) Alegria in the proceedings.

2.2 The Verenging submit to the claim underlying the timeshare contracts of the members of the Association are to be regarded as leases. The Court understands the Society's reasoning as that sold on behalf of the Bank of Nova Scotia (the "Bank") held foreclosure auction to Kildare Properties Ltd. owned leasehold rights to the Mr. Rafik R. Sidhom and subsequently delivered . Mr Rafik R. Sidhom has this leasehold then resold to Alegria. Alegria is bound by the lease so Alegria these leases, timeshare contracts, not as a result of the foreclosure auction cancel or destroy. Relying on the rental terms in the mortgage deeds will Alegria therefore not increase. Alegria also can not rely on the rental terms as the Bank has always known that the leasehold rights were leased to third parties and the Bank has always benefited from the rental income. The Association further calls on the provisions of Article 7: 226 of the Civil Code which states that proceed in the event of a transfer of immovable property, rights and obligations of the lease to the transferee of that property: Alegria according to the Association. Based on the foregoing Alegria must respect the timeshare agreements and Joy can not unilaterally terminate contracts or destroy.

2.3 Alegria contests the claim which motivated the Court below, where appropriate, will discuss.

3. The facts

a. The Association's members have called timeshare agreements with ENDLESS VACATION NV dba Caravanserai Beach Resort Beacon Hill (see the letter of November 13, 2014 by mr. MM Hofman-Ruigrok of submission).
b. The Bank has under its mortgage rights on the shortcomings of Kildare Properties Ltd. (Kildare) in the performance of the various money lending agreements auctioned the leasehold rights belonging to Kildare.
c. This leasehold rights according to the act of August 13, 2014 of the notary. FEE Tjon Ajong: "(...) The Appearer, acting on Behalf or Creditor, hereby declared labels to adjudicate Said immovable property to Mr. Rafik R. Sidhom, for the aforementioned amount of fourteen million dollars, United States currency (US $ 14,000,000.00) (...) "the same document also follows that the representative of Alegria during the auction the bid of US $ 14,000,000.00 for the benefit of his principal Mr. Rafik R. Sidhom (Sidhom).
d. By deed dated 27 October 2014, in the presence of the notary. Mingo Association founded. The aim of the Association is:
a to represent the interests of the timeshare owners and / or timeshare right holders or Caravanserai Beach Resort on St. Maarten in the WIDEST sense of the word, representation-including in and out of Court.;
b. to Attain thesis objectives, inter alia:
I. by starting and acquiescing in legal actions and entering into commitments,
II. by giving advice and assistance withother organisaties;
III. Initiatives and supporting all favorable to the members, this by all other lawful Means-which the Association Deems conductive objects to notes. (...) '
e. The letter of September 30, 2014 Alegria to "all persons Claiming timeshare rights at the Caravanserai Beach Resort 'is asked:
"(...) On August 13, 2014 the properties have been publicly auctioned by the Bank of Nova Scotia. The transfer of the Properties to Alegria Real Estate BV HAS BEEN completed on September 15, 2014. In article 8 of the special auction conditions, the Bank of Nova Scotia reiterated the prohibition or renting out the Properties without written permission notes and leaves it up to the buyer of the Properties (ie Alegria Real Estate BV) to invoke the annulment or any rental agreements Concerning the Properties.
"(...) If you have Entered into any type or timeshare agreement with Endless Vacation NV for a timeshare unit at the Caravanserai Beach Resort, pleasenote That Alegria Real Estate BV is not bound by Such agreement, and you are no longer Entitled to make use of the timeshare unit or any related timeshare exchange programs.
"(...) Although Alegria Real Estate BV notes or affiliates are not responsible for the loss of your timeshare right and related exchange programs due to the auction of the Properties, it does sympathize with the sudden loss of your timeshare right. As a courtesy to you, the new operator of the resort, Alegria Operations SA (affiliate or Alegria Real Estate BV) offers you a hotel room usage agreement That You will find enclosed. This agreement will allow you to enjoy the use of a hotel room and facilities at the resort against an annual fee to cover part of the operational costs of the resort. (...) '
f. By letter dated October 10, 2014, the representative of the Association is Alegria message:
"(...) Our clients received a letter from Alegria Real Estate BV, dated September 30th, 2014 and signed by you, announcing the annulment of Their timeshare agreement, and related-including timeshare exchange programs. We hereby inform you That the clients deem your letter and the asserted claims unacceptable. More Specifically, the claims or an immediate annulment of clients' timeshare agreements are unjust, and, May constitute a breach of contract.

As such-we urgently request and summon you That the abovementioned letter dated September 30th2014 is retracted Within two business days as of the date of this letter, that's, by Tuesday 14th October 2014. (...) '
g. Joy has not responded to this demand.

4. The assessment of interim measures

4.1 The Court considered and ruled for hands as follows.

4.2 The nature of the claim is the urgency decided.

4.3 Assuming that (i) the Association pursuant to Article 3: 305a BW ff can be received in the claim (ii) Alegria auction buyer but Sidhom and (iii) the timeshare contracts are to be regarded as leases, the claim may nevertheless not be assigned because the timeshare contracts of the members of the Association with Endless Vacation NV are closed. The provisions of article 7: 226 BW is therefore not applicable. After all, Endless Vacation NV has not transferred the leasehold rights or such rights are not auctioned at the expense of her. Furthermore, it is not stated or shown that Alegria these agreements with the cooperation of the members of the Association of Endless Vacation NV under Article 6: 159 BW (contract transfer) has taken over.

4.4 On this basis the claim can not be allocated now for hands must be assumed that Joy is not tied to the timeshare agreements with the members of the Association. Alegria also need to go to the preliminary finding of the Court do not respect these timeshare contracts.

4.5 The Court need - based on the above - not to respond to the question whether Alegria an appeal against the (members of) the Association is entitled to the rent clauses stipulated in the mortgage deeds. After all, the mortgagor, Kildare, on the grounds of the timeshare contracts are not the owner of the (members of) the Association, but that is the preliminary view of the Court Endless Vacation NV

4.6 As to the unsuccessful party set Association will bear the costs of Alegria convicted that can be budgeted to date Naf Naf 279.50 to 2229.50 whose service costs Naf Naf 450.00 to standing charges and 1500.00 to authorized salary.

4.7 The Court will explain the legal costs of the judgment enforceable.

5. The decision on interim measures

The Court:

5.1 rejects the claim;

5.2 Association condemns the costs falling on the side of Alegria that can be budgeted to date ANG 2229.50;

5.3 the legal costs declares enforceable

Daily Herald story

Really makes one think about being an "owner", at best it appears one ends up a "lease tenant".........

About 2010, while waiting to board at SXM, we heard two couples talking at the end of their first trip about how they couldn't (and DIDN'T) pass up the great deal to buy there........I think at that point they were going for pretty cheap.............we thought the place/view was nice but couldn't imagine buying a place with no beach..... <img src="http://www.traveltalkonline.com/forums/images/graemlins/duh.gif" alt="" />

We were scheduled to use RCI exchange at Caravanserai in February
Glad I saw something about this situation on Trip Advisor
Called "Caravanserai" answered as Alegria and said they would no longer honor RCI exchanges Nd I should contact RCI immediately
Did so and will have points and fees returned
Still going to St Maarten as we had plane tix and we love it there
So sorry for owners . Seems very unfair

Glad you got your situation resolved, but I would have thought that RCI should have contacted you.

What strikes me as really weird about this ruling is that the evidence linking Kildare and Endless Vacation was never presented. From what I understand of St. Maarten court proceedings this was an injunction case, which is a sort of a mini hearing and limited in scope. This still leaves plenty of room for further evidence in what is referred to as a main case. It still strikes me as odd that the lawyers for the Association did not even submit this evidence for the judge to see. As said in the main post, <img src="http://www.traveltalkonline.com/forums/images/graemlins/smashpc.gif" alt="" /> <img src="http://www.traveltalkonline.com/forums/images/graemlins/smashpc.gif" alt="" />it seems this is far from over.

It will only be over when the funding stops to fight this.

SXM??? Wendell

I feel bad for those who do not follow threads like this and exchanged into the resort and have NO clue that, when they arrive, they will have no place to stay.

It would not have taken much effort for RCI to make a list of ALL that exchanged into the resort and let them know what's up....

I check my flights and reconfirm my car rental times but I never call a resort to see if I actually have a place to stay....

Ok, do you KNOW that RCI has not contacted people who had exchanged into Caravanseri? I'm not saying that they have or they haven't, but you're just assuming that they haven't?

There also could be at least some Caravanseri t/s owners who show up, not knowing what happened either. The only notice I have heard about Alegria giving to t/s owners is by email and we all know how often email can go astray. Otherwise, I think the only way someone would know is if they read about it online and many people aren't internet savvy. Plus, some people could have gotten the email and deleted it as spam..

Plus if people have changed their email address as some do frequently and failed to notify the resort they would never get a notification.

I "own" two weeks at Caravanserai. I also traded one of those weeks in for points to trade into Caravanserai for the week prior to one of my weeks (ie. we own week 31 and 32, but needed week 30 and 31). As of now, RCI still shows me as having TWO CONFIRMED reservations at Caravanserai. One for my home unit, and one for the unit I traded in to. So they are NOT notifying either the owners or the people trading into Caravanserai, as we qualify as both and if we were not on SXM websites we would have no idea that neither one of those reservations (which we made in August) would likely be honored.

I am pretty sure there are people out there who have booked flights in the time between the sale of the property to Alegria and now, during which time RCI was alerted to the situation repeatedly. And I have never opened any email sent to me by Alegria. As far as I was concerned, the subject heading of the email looked like a spam timeshare offer (it did not mention Caravanserai, and I only knew the name Alegria because of posts on TTOL and from Marty). Had I not known the name Alegria as it relates to Caravanseri, the email would have been immediately tagged and sent to spam, without being opened. I suspect that is how a lot of people treated that email who had no idea about the Caravanserai/Alegria connection and still don't have an idea to this day because that has been the ONLY communication (I never got a second email, I have never gotten anything through regular mail, and I have gotten no notification from RCI).

Since I have not read of ANY members that exchanged into Caravanseri being notified I though it safe to "assume" that they were not notified but I guess they could have notified everyone but they just haven't shared it here.

I am not an RCI member nor do (did) I own at Caravanseri so I am going by what I read here. I do belong to II and I do "own" at SBR so I feel I have an interest in this situation.